How to Combat Increasing Amazon Sponsored Ads Costs and Rank #1

Matt Clark

Learn how to handle increasing Amazon Sponsored Ads costs and beat your competitors. Cherie Yvette, Sponsored Ads expert, has helped many businesses scale to making eight figures every year with her Amazon advertising expertise. Watch as she reveals why advertising costs keep increasing, why sellers should be focused on ranking in the number one position, and how sellers can secure their number one rank after they get it. This is just one of four free training videos. Stay tuned as Cherie shares more expert ad advice this week.

WATCH AS CHERIE REVEALS HOW TO BID TO BEAT THE COMPETITION WITH SPONSORED ADS.

Jason Katzenback (Co-Founder and CEO of Amazing.com) interviews Cherie Yvette, an Amazon advertising expert who has helped many businesses get mastery over sponsored ads. This is the first video in a four-part, free training series in which Cherie reveals important concepts and strategies that will make sponsored ads work for any business.

Most Amazon sellers and business owners worry about constantly growing sales. Sales ensure sellers will rank higher on Amazon’s search result pages. Many sellers don’t know what to do when other competitors begin to pass them in the search ranks, especially when they’re passed by someone who is using illegal tactics.

Instead of worrying about those competitors, sellers should focus on paid traffic, specifically sponsored product ads.

Why You Should Focus on Sponsored Product Ads

Sellers can push products up the ranks and increase their sales volume and profits by mastering sponsored products. Some people use sponsored ads like gambling—sometimes they are successful and sometimes they are not. They learn the basics and discover mediocre results.

Often, Jason himself put things off that he didn’t like to do for his business (usually things regarding data and math). He found that by the time he got around to these things, Amazon was already changing the rules. By not mastering sponsored ads, his products began to fall in the rankings. To master sponsored ads, Jason turned to Cherie Yvette, an expert in Amazon advertising, and the secret weapon behind many eight figure Amazon sellers.

Why Advertising Costs Keep Increasing

Advertising can be expensive, which makes it easy for sellers to burn through cash on sponsored ads. The more people who jump on Amazon to sell products, the higher advertising costs rise.

To address that issue, the first part of this training series will focus on getting ads positioned at the top of the search results for the lowest cost.

There are millions of sellers on Amazon trying to sell their products. Luckily, Cherie has found a way to cut through the crowds and the chaos and rank products at the top of the search results through paid ads. After 18 months of aggressive advertising, she was able to use paid ads to help scale a client from $665K a month to $1 million a month, then to $1.5 million a month, and eventually all the way to $3 million a month.

Amazon’s customer base and technology is expanding rapidly. Sometimes this can make the platform feel chaotic. With a market moving at such high speeds, the only way to win is by making small bets and seeing what sticks.

Why You Need to Rank Number One

It is important to rank number one in the search results, and not number two or three. When it comes to sponsored ad positions, only one sponsored ad is shown on mobile.

Customers place more orders on mobile than on computers, which is why this is so important. As much as 65% of sales come from mobile shopping. If you let your competitor land the number one sponsored position, you are letting them take all those mobile sales.

How to Take the Top Spot

Sellers need to be prepared to bid aggressively to rank their ads and take what’s theirs.

Start by looking at suggested bid ranges on Amazon at the keyword level in the campaign manager. If the suggested range is 250 to 445, bid higher (say, 465). After you make that change, manually check Amazon to see if your ad is ranking on mobile and on desktop. Traction will begin after you hit the number three spot in desktop.

After you reach that point, increase your bid by 20 to 40 cents every couple of hours until you reach the number one spot, taking note of the bids that are required for rank three, two, and one.

You don’t have to go crazy bidding, but you should increase your bid incrementally every few hours until you reach the number one rank.

Holding the Number One Rank

After you gain that number one spot, you should hold it for 5 days. The 5 days allows attributions to show in the campaign manager and time for the system to balance. Amazon’s algorithm uses a formula for ad rank, looking at a seller’s max CPC, compared to sales history. Holding the number one position allows you to acquire sales history and have your ad rank catch up to what you’ve done.

Even if the ad cost doesn’t look promising at first, these positions can be conceded later by a much stronger sales history. High conversion rates mean a lower average CPC. Moving ad rank up means a higher conversion rate, which means a lower CPC and cost for paid ad campaigns. The cycle becomes: increase the maximum bid, get higher sales, lower CPC.

Whatever the bid is will not be what you pay, regardless of sales performance. Cherie says she usually pays 30% of her actual CPC to her max bid. If she bids $6, she ends up paying about $2 by the end of the campaign. By getting to the number one position, you find out what the actual CPC costs to hold the position.

Continue the Free Training

In Cherie’s next free training video with Amazing, she will show how a simple campaign structure can help sellers keep the number one positions after they win them, in addition to staying ahead of Amazon’s algorithm.

How to Deal with Constant Increasing Ad Costs and Break Away from the Crowd – Training Video Transcript

Jason K.: Howdy, I’m Jason Katzenback, CEO and Co-Founder of amazing.com. I’ve got a question for you. As a physical products business owner selling on Amazon, what’s the number one thin you worry about?

Jason K.: If you’re like me, it’s consistently getting and growing sales. Sales are the lifeblood of you business. It’s how you generate revenue and the primary way you get higher rankings on Amazon’s coveted search results.

Jason K.: But what happens when someone starts passing you up in the search results or when an unethical competitor takes you out of those top spots with a illegal tactics?

Jason K.: I tell you that gets my heart rate up just thinking about that. I’ve had both of those things happen to me, and I used to constantly worry about this non-stop. That is, until I learned how to take control of my list. Can you guess what the key factor is to taking back control of your listing? It you guessed paid traffic, you are correct.

Jason K.: Specifically, sponsored products on Amazon. By mastering sponsored products, I was able to push my products up the rankings, increase sales velocity and volume, and turn a profit all without losing my shirt. And notice I said master, because most of us have used sponsored ads sometimes with success, sometimes not. We learn the basics and some of us spend hours upon hours staring at the data to make sense of it on top of running all the other aspects of our business, and because we didn’t know what we didn’t know, and because we just get so friggin’ busy doing all those other things, your results are probably mediocre at best.

Jason K.: Think about this, and I do this a lot. Think about the things you keep putting off in your business. A lot of times we put off things that are critical to the success of our business, whether it’s because they initially confuse us, bore us, or just outright scare us, we simply avoid it, and tell ourselves, “We’ll get back to that later.”

Jason K.: The problem is these things we avoid are the things that the super successful put laser focus attention on. For me, early on in my business, it was anything to do with data and math. I put it off, because I felt like it didn’t make sense. I preferred creating things, and hated math. It was frustrating. But what was even more frustrating was once I started focusing on this data and put systems in place, Amazon went ahead and started changing the rules, and with ever increasing competition, my results with sponsored ads started to dive bomb. Causing some of the products to disappear from the top rankings they held for so long.

Jason K.: That is until I was introduced to someone who quickly became a good friend and a powerful secret weapon in my business regarding sponsored products. She’s also the secret weapon of many seven and eight figure Amazon sellers. I’m talking about the one and only Cherie Yvette, otherwise affectionately known as the Urban Cowgirl. Cherie helped my business get mastery over sponsored ads and after one and a half years, I was finally able to convince her to help you gain mastery over your sponsored ads by teaching you her simple system that turned my ads from barely break even to massively profitable.

Jason K.: This is why we’d like to welcome you to this free training series where Cherie, a true Amazon advertising expert, who by the way only manages sponsored ads for seven and eight figure businesses, will share with you some of the most important concepts and strategies to make sponsored ads work for your business.

Cherie Yvette: That’s right. Thank you, Jason. And thank you for joining us for this free training series. We’re gonna cover important strategies in this series that will make a huge difference in your sponsored ad campaign performance. It’s pretty crazy what’s possible when you work with Amazon’s algorithm instead of against it and have a simple system in place that allows you to rapidly grow your business.

Cherie Yvette: It’s really easy to make mistakes with sponsored ads, and it’s even easier to burn through cash, because advertising can be expensive.

Cherie Yvette: Since the Amazon advertising platform is growing like crazy, more and more people are jumping on which causes the cost to rise. Most Amazon sellers have the wrong mindset when it comes to running sponsored ads. In this training series, I’m gonna cover the key mindsets that will allow you to rapidly grow using Amazon sponsored products. You want to make sure you watch and download all the training we’re gonna provide you as it’s definitely gonna put you ahead of the competition.

Cherie Yvette: Now in this first video, we’re gonna take a look at ad rank, and more specifically, how to get your ads positioned at the top of the search results for the lowest cost. And the only way to get results with Amazon is to drive sales velocity. And you need to secure the top ad positions to achieve this.

Cherie Yvette: At the end, we’ll also provide you with a step by step roadmap that you can download on how to get your ads to cut through the crowd and rank quickly. You definitely are gonna want to check this out.

Cherie Yvette: The Black Hills Gold Rush, Deadwood 1876.

Cherie Yvette: Like every opportunity in American history, the Gold Rush attracted thousands of entrepreneurs looking to capitalize. Amazon is no different. We have millions of sellers looking to sell their products on the shopping engine. Today I’m going to show you how to cut through these crowds, and the chaos these crowds created to rank your products at the top of the Amazon search results with paid ads.

Cherie Yvette: Here’s an example from one of my client’s business center reports. This shows you the results we’ve been able to achieve with 18 months of aggressive advertising. We launched the campaigns in the fall of 2016, they were doing about 665K without advertising at scale. Immediately after advertising at scale, we clocked one million a month, and then by the spring of 2017, we hit 1.5 million and then by the summer, we hit three million dollars a month. As you can see, it stayed pretty steady. The main thing to look at these numbers here is you look from July through the beginning of this year. You can see that we just held really steady in the marketplace and any time we dropped, we were able to kind of regain our market share and hold the campaign sales. So, the good news here is you can see in June we surpassed four million dollars. So, even through there was a bit of a lull, trying to figure out the next step in the strategy, we still have been able to make major wins and continue to grow the total sales of these products.

Cherie Yvette: So, the key with Amazon that makes it so unique is both the technology and the customer base is rapidly expanding. And with rapid expansion comes quite a bit of chaos, right? And the only way to win in a market moving at high speed is to make a series of small bets and see what sticks. This is Wild Bill Hickok, a lawless law man and a notorious gambler. Wild Bill was known on the Frontier for being aggressive, fearless, tough, and quick. We’re gonna take a page from Wild Bill’s playbook as we grab these top positions in search.

Cherie Yvette: So, why the number one position first of all? We’ll talk about how in a minute, but why number one? Why not number two or number three? Well, the key takeaway here is there’s only one sponsored ad position in mobile, and shoppers place more orders on mobile devices than they do computers. Amazon’s mobile shopping has exceeded regular desk top devices as early as 2015, and at this point, you’re looking at about 65% of your sales coming from mobile devices and if you conceded that number one position to your closest competitor, I mean heaven forbid you’re sitting in position two letting your competitor take all those mobile sales, but if you’re not even in the top positions, then you’re missing a big portion of desktop sales, but if your not in the number one position, you’re missing mobile.

Cherie Yvette: So, how do we take these spots? Well, we’re gonna bid aggressively to rank our ads in the search results, right? We’re gonna come in here fast and furious and we’re gonna take what’s our. We’re gonna start out by looking at the suggested bid range that Amazon provides us with at the keyword level in a campaign manager. So, it Amazon’s suggested bid range is say, 250 to 445, we’re gonna go ahead and start our bid slightly above the high range. So, I would start probably at about 465 if the high range was at 425, and then from there I’m going to go and give it a few hours for the search engine to kind of catch up to my adjustments and then I’m gonna manually check amazon.com and I’m gonna manually check the Amazon app on my mobile phone, and I’m gonna see where my ads are ranked.

Cherie Yvette: Now, it’s gonna start to get very interesting when you hit the number three spot in desktop is when you’re starting to make traction, so what I like to do is increase my bids by about 20 to 40 cents every single time, every couple hours until I rank in the number one spot. And then I like to make note of when I hit position three and the bid required and when I hit position two and the bid required and then as I take position one, and then of course when I take position one in desktop, I confirmed that I’ve also taken it in mobile. So, again, just continue to increase your bids incrementally. You don’t have to be crazy. You don’t want to be jumping up the bids too high and telegraphing these high bids through the whole market. You want to do this very incrementally and check every few hours until you achieve that number one position.

Cherie Yvette: So, now once you secure the number one spot, you’re gonna want to hold that position for minimum of five days, right? First of all ’cause sales attribution isn’t going to start to show immediately in the campaign manager. Your A cost can look pretty high at first, but you need to give the entire system time to balance out. And when I say that, it’s because the ad rank formula, the algorithm uses a formula for ad rank, and it looks at your max CPC that you’re willing to pay, and then it looks at that compared, kind of multiplied, times your sales history, right? And your sales potential in that spot. So, when you’re looking at sales history against max CPC, obviously your sales history and velocity are gonna be considerably stronger as you enter the number one position. Especially if you weren’t playing in any positions at the top of the search results prior to this strategy, right?

Cherie Yvette: So, you want to go ahead and allow your ad rank to catch up to what you’ve done and you want to see how much sales history you can acquire. And even if the A cost doesn’t look super promising at first, you can always concede these positions later, but you will concede with a much stronger sales history, which is going to be beneficial to your ad campaigns across the board.

Cherie Yvette: So, here the main takeaway. If your conversion rate is high, then your average CPC will be lower. So, if by moving you advertising position up, you get a higher conversation rate, you’re gonna see that the average CPC is going to be much lower what you pay in your ad campaigns. So, it’s kind of a nice cycle. You’re gonna increase your maximum bid, which is then going to give you higher sales, and then that is going to lower your CPC.

Cherie Yvette: So, to reiterate, whatever you’re bidding is not what you’re going to be paying regardless of your sales performance, so in all of my campaigns, I normally end up paying about 30% actual CPC to my max bid, so if I bid six dollars, I end up paying about two dollars for my CPC at the end of this campaign test. So, what you want to have here is you’re gonna discover what the actual CPC cost in the number one position in search, and that’s incredibly good information for your overall campaign strategy. Rather than kind of incrementally bidding where you’re comfortable, you can actually go in here and push for market share and see what your actual CPC will be like if you are driving sales velocity, and then you can also see how many orders you’re gonna secure per day in those positions, and you can start to look at how those orders are going to impact your organic rank, and your overall business growth.

Cherie Yvette: So, in the next video as we all know the Amazon marketplace is kind of competitive, and that is my specialty, competitive markets, so I’m gonna show you in the next video how to use simple campaign structure to keep these number one positions after you win them.

Cherie Yvette: So, one little note here that I think is super important, so please write this one down immediately, if you’re taking notes is that this video is coming out the same week as Prime Day 2018. So, I want to make sure that as you go through this particular strategy, you’re gonna wanna make sure that you don’t increase your bids in a last ditch effort to capture a few more Prime Day sales. Unfortunately, in the middle of the promotion cycle

Cherie Yvette: So, it’s better to let the dust settle and let Prime Day pass, and then go and roll out this strategy in a few weeks. Because with advertising, timing is everything. And the best strategy to win rank and capture market share is to purchase your traffic and gain your wins when paid traffic volume and cost are lower, like coming into this nice stretch for summer. This is a great time to test and this is a great time to get ad rank, and this is a great time to win more of your market, and then you push velocity and you increase your budgets and you increase your entire push as we come into the high shopping season this Christmastime, right? So, buy when the market is low, and then push when the market is high.

Jason K.: Thank you Cherie. That was fantastic.

Cherie Yvette: You’re welcome, Jason.

Jason K.: As you can probably tell, Cherie’s very passionate about the topic of sponsored ads.

Cherie Yvette: Yes, I am very passionate about this topic, especially when I’m able to solve really hard problems in my client’s campaigns and then see such great results. It’s exciting to share these strategies with you, so please make sure you download the roadmap that is included in this training so you can take advantage of everything we’re providing you.

Jason K.: Yes, please don’t forget to download the free roadmap, as this free training series will be going away in a few days, so don’t miss out. By entering your email below, not only will you get access to the roadmap, but we’ll also be able to send you a reminder for when we release second video in this series.

Cherie Yvette: In the next video, I’m gonna show you how to stay ahead of Amazon’s constant algorithm changes, and the right way to properly structure your campaigns for easy management saving you a lot of time and money.

Jason K.: We’ll see you in the next video.

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