PPC (Pay-Per-Click) advertising and organic rankings are both vital to success on Amazon. PPC is a paid advertising method where brands bid on specific keywords to appear at the top of search results. Organic ranking, on the other hand, refers to appearing at the top of search results naturally, without the use of ads.
A brand's total revenue is the sum of revenue from PPC ads and organic revenue (sales made without ads). PPC advertising plays a crucial role in boosting initial or stagnant sales, which in turn improves organic rankings. As organic rankings rise, organic revenue naturally increases, ultimately driving up the brand's total revenue. Furthermore, because organic revenue is generated without advertising expenses, it plays a major role in improving overall profitability. PPC advertising, organic rankings, and organic revenue are closely linked; to achieve greater and more profitable sales, you need a strategy that understands this correlation and effectively leverages their interaction.
PPC advertising and organic rankings play complementary roles. In today’s highly competitive Amazon marketplace, simply getting your product noticed is a challenge. Since most brands and sellers are already running PPC ads, failing to do the same reduces your chances of visibility and limits opportunities to improve your organic ranking. However, reckless PPC spending can lead to inefficiencies due to high Cost-Per-Click (CPC) and bidding wars, making a segmented PPC strategy essential for long-term success. When you achieve strong click-through and conversion rates for specific keywords via PPC, the Amazon algorithm deems those keywords relevant to your product. As relevance increases within the algorithm, your product is more likely to appear at the top of organic search results.
Beyond click-through and conversion rates, sales data from PPC ads sends positive signals to Amazon’s algorithm, contributing to higher organic rankings. For instance, when a new product gains sales velocity through ads and receives positive reviews, it significantly aids in climbing organic ranks. Since organic rankings fluctuate based on competitors and search volume, consistent PPC advertising is necessary to maintain high sales and sustain those rankings over the long term.
Optimizing Sales Velocity
The primary way Amazon PPC influences organic ranking is through sales velocity. Sales velocity is a metric that measures sales over a specific period and includes Average Order Value (AoV), Conversion Rate (CVR), and the length of the sales cycle. Sales velocity can be calculated using the following formula:
Sales Velocity = (Clicks × Average Order Value × Conversion Rate) / Sales Cycle Length
Sales velocity serves as an indicator of a product's popularity and relevance, acting as a key factor in the algorithm's ranking decisions. Because PPC can artificially boost sales velocity for important search terms, it drives more sales and higher conversion rates, helping Amazon recognize your product's value and improving your organic ranking.
By using keyword data from PPC campaigns to optimize product titles, descriptions, and backend search terms, you can maintain high rankings in organic search results. This helps drive a steady increase in organic sales. For example, if a specific keyword performs well in ads, incorporating it into your product title and description can help you secure a high organic ranking for that term.
Driving initial sales through effective PPC strategies to boost organic rankings leads to long-term growth in organic revenue, ultimately increasing your brand's total sales. Success on Amazon depends on a well-balanced combination of PPC and organic strategies. At DISRUPT, we employ innovative marketing strategies to build this virtuous cycle and support you through every step of your Amazon business journey. Achieve success on Amazon with DISRUPT.
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