How to analyse your competitor's Amazon PPC strategies?

Identify the intensity of the competition, and use brand analytics to gain on your competitors.

This article walks you through easy ways to analyse your competitors’ Amazon Pay Per Click (PPC) strategies inside Seller Central, to translate this insight into powerful advertising strategies for your brand.

How to identify the intensity of competition?

Let’s focus on three simple methods to get a feel of the competition for your products.

The first and most straightforward strategy is searching how much other competitors are bidding on exact keywords. To do that, we use seller central’s advertising console. Then we add exact keywords in a campaign and approximate with Amazon Bids Recommendation the intensity of the competition (figure 1).

For example, looking at the competition for gaming earbuds, we selected three variations of keywords: “gaming earbuds” with a bid recommendation of $0.86, “earbuds with microphone noise canceling” with $2.22, and “earbuds with microphone long cord” with $4.54 (figure 1).

We can see that the competition level increases with the average cost per click below (i.e. $0.86 a medium competition level and $4.54 a very high competition level). Therefore, this is the easiest and most accurate strategy to capture the competition level for a given keyword.

A second method is to identify who is competing on your keyword. To do that, we type the keywords on Amazon and directly see which brands are investing in those keywords (figure 2). Following our example on earbuds, we can see that for “Earbuds with microphone noise cancelling”, the brand MPOW and Amazon brands are doing sponsor products and a list of many other brands on the left-hand side.

Finally, a third and more advanced approach is to calculate the difference between our bid and the actual cost per click (CPC) that we end up paying. It is important to note that this is possible because Amazon’s auction system is a second price auction where the highest bid wins but only pays the second-highest bid. The more significant the difference between your bid and your final CPC, the lower the competition. For example, bidding $1 and paying $0.95 means that the second-highest bid was $0.95. A difference of $0.05 indicates that this keyword is under significant competition, whereas bidding $1 and paying $0.6 depicts a smaller competition level.

Overall, this last option is more complex and requires more time to implement. In general, we would recommend focusing on the Amazon Bids Recommendation to study how aggressive the competition is.

So how to use brand analytics to gain on your competitors?

After palping the competition level, we will now dig deeper into how to use your competitors strategically in order to advertise your Amazon products. The method is to type the most relevant keyword in the brand analytics report to get a list of your competitors’ search terms for that keyword. For earbuds, we would have typed “wireless earbuds”. In this list, we filter out search terms with clicks but no sales as they might be fraudulent and identify the strongest top Amazon Standard Identification Number (ASIN) in terms of conversion and clicks. We add those top ASINs in a product targeting campaign, generating huge traffic and opportunities to get our product seen.

Lastly, we circle back to our top ASINs’ list and type ASIN after ASIN in the brand analytics report. In the report, we trace every search term that leads to your competitor's particular ASIN and whether this search term converted into a sale. Overall, we seized a list of keywords where your main competitors are strong. As before, we filter this list and add it in an exact manual targeting campaign so as to be able to steal some sales from them.

What other competitors’ advertising strategies could I use?

After analysing the competition, we highlighted three unusual advertising strategies that competitors and you could use on Amazon Seller.

The first is to bid on popular keywords. This strategy consists of three stages: targeting the top 5% keywords in an exact manual campaign, isolating five to ten keywords with the highest volume in dedicated campaigns and implementing a catch-all automatic campaign with a very low bid for the remaining keywords.

One way to identify the top 5% keywords is to use the brand analytics report (figure 4). First, we input a keyword in the brand analytics report that will display a list of all the search terms containing that keyword ranked by search frequency (i.e. the volume of search for every search term). Next, we filter for irrelevant or unrelated keywords, and from this filtered list, we create a manual campaign. Note that we strongly recommend that any seller with a registered brand use this report as it is based on real data, so 100% accurate.

A second strategy is steering with placement bid adjustments. One particularity of this strategy is that we must use a single campaign for each targeted keyword as it is the only way to adjust a given keyword for every placement (figure 5)

After creating the campaign, we apply at least 100% “top of search” adjustment and in the targeting and set a low base bid (i.e. $0.1) (figure 5). For example, with a 100% bid adjustment and a $0.1 bid, our bid can go as high as $0.2. After setting the bids, we can directly modify them by altering the bid adjustment percentage rather than the bid in itself. For instance, if the traffic is too slow, we enlarge the bid adjustment allowing the bid to increase further. Similarly, we could apply this method to product targeting using “product pages” adjustment and a single product targeted campaign. Overall, this is a different way of doing steering based on the adjustment and not on bids.

Finally, our third strategy is to aim for the long tail. In contrast with the first strategy, we now target the cheapest keywords with the lowest search frequency rate. To do that, we use the filtered list from the brand analytics report mentioned before and group the bottom 80% of keywords in one single campaign. Keep in mind that you need to create one ad group per product and repeat this process for each ad group if you have multiple products.

For more details about how to analyse your competitors' Amazon PPC strategies:

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May 16, 2022
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