Sponsored Products Setup Is Like Coaching a Basketball Team—If You’re Doing It Right

Anyone who’s invested in Amazon PPC will have a strong opinion about best practices for campaign structure. What’s the best way to implement targeting flows? Where is the sweet spot between granularity/control and efficiency/scalability?

We might disagree on the answers to these questions, but one thing’s for sure: campaign structure is paramount for success with Amazon PPC. It’s the foundation on which optimization is built. 

An ideal structure isolates campaign and targeting types’ unique benefits and minimizes their respective drawbacks. But again, how? The devil’s in the details. 

Based on an internal Sellics study we conducted earlier this year that analyzed 2.5B of advertising revenue managed with Sellics during Q1 2021, we’ve updated all of our essential PPC guides to reflect our findings and to shine a light on some of the most hotly-contested questions around campaign structure.

Today, I’m presenting the broad strokes using a CEO's favorite tool: an analogy. Sponsored Products setup is like coaching a basketball team. How so? Let's get into it! 

Keyword and ASIN target research is pre-draft

Free Amazon keyword research tools are useful for producing your initial targets (“players”), but these keywords and ASINs are untested. They’re just prospects—until they have a chance to perform in context. 

Automatic campaigns are the NCAA (collegiate-level)

Automatic targets are partially qualified. You hope and expect them to do well, but you’re not necessarily placing bets on their performance just yet. 

We cheer when they score, but college basketball games are relatively low stakes. And of course, you can’t expect a pro-level performance: automatic targets overall only convert at half the rate of manual campaigns. 

And that works for automatic campaigns because targets are cheap—with CPCs just 56% of the cost of manual campaigns. That helps to control your overall investment or ACoS. 

Automatic campaigns' CPCs are just 56% of manual campaigns'

source: Sellics

Within automatic targeting there are nuances: just as not all promising players contribute equally to the scoreboard at the end of the game, not all matches convert at the same rate.

Automatic keyword matches convert at a 45% higher rate than automatic ASIN matches and have half the ACoS

source: Sellics

On average, automatic keyword targeting performs better than automatic ASIN targeting. Does that mean you should focus on keyword targets only? Absolutely not.

You also wouldn't want a basketball team made up of fifteen forwards. 

The main purpose of your automatic campaigns should be researching targets for your manual campaigns: you’re scouting for talent—for the NBA. It's too early to judge your prospects too harshly; that could mean missing out on valuable players.

Remember that Kobe Bryant was a 13th overall NBA draft pick. 

Manual campaigns are the NBA 

Move talented (i.e. converting) search terms as targets to your manual campaigns or, draft them to the NBA.

Here, your targets are expected to perform well, and they do. 

Manual campaign conversion rates are 2x of automatic campaigns'

source: Sellics

Manual campaigns convert better (2x), but they also cost more: CPCs are 1.8x of automatic campaigns. Because generally, you’re willing to invest more and so is your competition. 

But it’s worth it because only in the NBA can your players really show what they can do. And, their greater degree of specificity and higher conversion rate means increasing campaign efficiency overall.

NBA all-stars aren’t selected from the NCAA: it’s unwise to harvest your exact targets from automatic campaigns—they should first be qualified. That's why we recommend harvesting and qualifying your profitable keywords with a two-step process, going from broad keywords to exact keywords. 

Here’s what your “recruitment” roadmap (including all targeting options and also Sponsored Brands and Sponsored Display) should look like: 

Source: Sponsored Products The Ultimate Advanced Guide

You can find the detailed explanation of this strategy including its optimization flows in our Amazon Sponsored Products: Ultimate 2021 Guide Advanced Edition.

It is important to have a differentiated campaign structure because every targeting type has its own benefits and drawbacks—they perform differently. 

Manual exact and ASIN campaigns are for NBA all-stars 

Finally, at the highest echelon of performance, maximum investment meets maximum return: you'll move only your top-performing targets to exact match.

Exact match campaigns convert at a rate 55% higher than the average of other manual match types

source: Sellics

Conversion rates differ significantly between manual targeting types, generally correlating with CPCs:

Stronger performance is met with a better salary: for manual campaigns, higher conversion rates are met with higher CPCs

source: Sellics

If you examine the charts a little more closely, you’ll notice an outlier: Category campaigns convert at less than half the rate of all other manual match types. 

Because they perform more like automatic campaigns (extensive reach with a lower conversion rate and CPCs) they are better for scouting than performance and should be used that way for maximum efficiency (see: roadmap).

Category campaigns are like the New York Knicks—talented players shouldn’t stay there for long. 

A caveat: with refinements, it is possible to get better performance from category campaigns. Though broad, you can use refinements to identify products you can “win” against; according to price and star rating.

Our data shows that category targeting is hugely underutilized. If you want some inspiration about using it profitably, check out this Flywheel Podcast episode and this article where we discuss product fit. 

And, my apologies to the Sellics New York office. There’s always next season!

Finally, remember how despite a difference in performance level at the scouting stage (automatic campaigns), keywords and ASINs are equally valuable for harvesting? That’s because:

For manual performance campaigns, keywords and ASINs perform about the same

source: Sellics

Despite differences in performance level early on: they’re ultimately equally valuable players at the pro level. You don't want to miss out on your PPC campaign's Kobe.

Final thoughts: Campaign Structure is a GameChanger

Michael Jordan said it best:

“Get the fundamentals down and the level of everything will rise.”

That's why campaign structure will make or break your Amazon PPC ads, especially Sponsored Products ads.

The right setup means you’re keeping your campaigns current by recruiting new prospects and using your budget as efficiently as possible by making the most of each match and campaign type.

If you want to learn more, check out our updated advertising guides on the Sellics blog. Specifically, you'll find the strategy outlined above in the Amazon Sponsored Products: Ultimate 2021 Guide Advanced Edition. 

Want to know how your campaign structure compares to others in your subcategory and marketplace or benchmark your PPC performance in general?

Try the (free) Sellics Benchmarker [Beta] to get access to your custom report.