Posted on May 15, 2021
Find out how you can improve your Amazon PPC campaigns...
As Amazon continues to become an incredibly popular advertising platform for ecommerce businesses, and as the demand in the market from consumers increases, more businesses are looking to third-party tools to help them improve their campaign performance.
Artificial Intelligence (AI) automation for Amazon is now incredibly sought after by brands and agencies, allowing them to take advantage of machine-learning software that can make necessary changes such as automated bid and keyword adjustments on their behalf, reducing the need for manual intervention.
While AI-based automation tools are incredibly powerful, it may not always be the best solution for advertisers looking to grow on the Amazon platform, especially if they’re looking for more flexibility and control over their keyword adjustments. In this situation, rules-based automation tools for Amazon PPC can be more effective.
Below, we’ve compared the two solutions to identify their strengths and weaknesses, and which businesses would best be able to benefit from either solution. By understanding the fundamental differences between the two, you can choose the best option to maximise your ROI on Amazon and set up your Amazon PPC campaigns to succeed.
What is Amazon PPC AI and how does it work?
When using Amazon PPC AI, you, as the advertiser, set the rules that define your bid and keyword parameters. From here, you can let the algorithm execute the changes on your behalf, considering the conditions have been met.
The machine-learning algorithm will continue to run in the background, determining what changes to make at the most optimal times. To do this, the Amazon PPC AI tool “autopilot” analyses a large amount of data, utilising clustering and forecasting models to make bid changes that are relevant to the predicted revenue per click.
Predominantly, the Amazon PPC AI is most powerful when optimising bids for short-tail keywords with a high search volume. This is because the algorithm has access to an abundance of search data, allowing it to recognise patterns and identify those keywords that can generate the most conversions.
In some instances, Amazon PPC AI can also optimise for long-tail keywords. This is incredibly powerful in the competitive landscape, as long-tail keywords can be rather lucrative for advertisers looking to target customers displaying the intent to buy. This is something that is particularly hard with rules-based automation.
What is Amazon PPC rules-based automation and how does it work?
In contrast to Amazon PPC AI, rules-based automation requires you to retain the manual-decision making element when making changes to your campaigns, by defining the IF/WHEN rules that trigger the bid and keyword changes. You pull the levers, and the program only executes actions based on those levers.
The difference between rules-based automation and AI is that AI is only given a set of parameters and then it makes the decision. For example, with bid automation, IF the Advertising Cost of Sale (ACoS) is less than the target ACoS by 20% after 20 clicks, THEN you can set the automation to increase the bid by 30%.
Another example is the keyword automation rule. For instance, it may be, IF broad keyword generates orders >1 after 1x clicks, THEN move keyword to exact ad group.
The rules-based automation changes will only be triggered based on your pre-defined IF/THEN rules, and these automation rules can be as simple or as complex as you desire, an advantage that the AI option does not provide.
Which method should you choose to drive the best results?
To summarise, both solutions are advantageous for different reasons. For example, there are several important factors to consider, including:
• Ease of use
• The level of control you receive
• ROI performance
• Goal setting
• Target users
• The size of your advertising budget
• The experience level of your team members
For example, Amazon PPC AI is best suited to advertisers that are looking to optimise their Sponsored Products campaigns by utilising a hands-off solution. With Amazon PPC AI, you would essentially outsource the decision-making element to the software, that will refer to data signals, historical performance, forecasted revenue, and seasonality to determine when to make optimal performance-based changes to your campaigns.
If you require a degree of control, then rules-based automation is best for you. With rules-based automation, you have the freedom to test different strategies, allowing you to construct campaign automation that is better suited to your unique business needs and goals.
If you’re a larger agency that is overseeing an expansive advertising budget on Amazon, then we recommend that you take advantage of Amazon PPC AI solutions, as it can take away time-consuming steps.
Do you need help with online marketplaces?
Navigating the world of online advertising and marketplaces can be complex and time consuming. However, with the right support, you can experience great success from your campaigns without the hassle.
For more information on how you can get the most from your online marketplaces and boost the performance of your online advertising, contact the team at Diginius today.