The well-chosen level of optimization is key to the success of every Amazon PPC campaign structure. When I talked about our best seller account, I mentioned we have switched from the 2nd to the 1st level of optimization.

But what does this mean? Without further ado, let’s dive DEEP into Amazon’s best-working advertising structures.

These optimization systems mostly apply to Sponsored products. For the Sponsored brands and Sponsored display ads, I would share thoughts in a separate post.

Please, note that every optimization level is scalable in its own right. It is possible to build on these structures, add more keyword families (or keyword sets). In this article, I’m describing structures for 1 set of keywords. This does not mean that you can only target 1 set of keywords in 1 structure. You can also use these structures to target ASINs as well. Each optimization level can consist of hundreds or thousands of campaigns.

Amazon allows you to optimize a few things at the campaign level: budgets, placements, and bidding strategies. At the ad group level, you can optimize negative targeting, default ad group bidding, and analyze ad group level search term data.

What are the four different levels you can use to create a winning PPC campaign structure that’s right for your products?

4th level of optimization

It’s the simplest but unfortunately, most inefficient strategy. I have used it at the very beginning of my career back in 2015. And it worked. But times and Amazon’s algorithm have changed. What worked well in 2015 doesn’t work as well now. Amazon sellers and Amazon advertising module are much more sophisticated.

4th level structure consists of 1 PPC campaign, with only 1 ad group. This particular ad group has 1 set of keywords with 3 different match types: exact, phrase, and broad. This means that if you want to target 25 keywords, we will add 75 keyword targets within the ad group.

Everything is mixed in one place. That being said, if you want to optimize placements, you optimize placements for everything.

Unfortunately, you can’t optimize negative targeting properly because the KWs in all match types are targeting each other. As a result, the data is a mess. If I had to choose a name for this optimization, this would be “all in”.

3rd level of optimization

The 3rd level of optimization is much more efficient than the 4th one. We sometimes use it when we have to adapt to our new clients’ current structures.

This advertising level provides you with 1 campaign, with an ad group for each match type – for the exact, phrase and broad KW (3 ad groups in total). It helps you understand the performance of every match type better and optimize general bids easier.

You can also negate the keywords properly because the different match types are separated. Thus, broad and phrase campaigns would not target the exact match KWs.

At the 3rd level of optimization, there is an addition to the standard automatic campaigns but this part is rarely used by the Amazon sellers themselves. It’s a more common action step for the agencies. This particular addition is called – “the idiot tax”. Usually, the auto campaign contains 1 ad group, with 4 targeting groups“hidden” within. At the 3rd level within 1 campaign you create 4 ad groups for each different targeting group:

• close match
• lose match
• substitutes
• compliments

Thanks to the 3rd level of optimization, you can see exact search terms for each targeting group. This helps you to optimize the negations, targeting group bids, and understand the data more easily.

2nd level of optimization

For most of our clients, we use the 2nd level of optimization. This type of optimization applies to more advanced sellers or sellers with low product count. Usually, you have to use bulk uploads to properly optimize this structure. I highly recommend using bulk uploads, when having more than 5 products. It’s much easier for optimization and monitoring of the data.

The 2nd level of optimization gives us the opportunity to build not 1 but 3 campaigns for the same keyword set.

Each campaign contains 1 ad group, and also 1 set of KW, which means there is an exact, broad, and phrase campaign. You can optimize placements, budgets, and bidding strategies for every keyword match type. You have the ability to segment every match type and separate them into different campaigns. This is where you have a really good understanding of the performance of each match type and keyword set.

For this structure, you can run 4 automatic campaigns. Each auto campaign targets a different targeting group.

This means that you can optimize placements, budgets, and bidding strategies for each targeting group separately.

It is the maximum level that is humanly possible to optimize at scale.

1st level of optimization

This level of optimization is what I call “the sky’s the limit”. It’s best to be used only by advanced Amazon Sellers, and it’s achievable only with software. I wouldn’t recommend sellers use it by themselves unless they are working with an agency that has experience with it. Using the 1st optimization level you can build the most scalable campaign structures.

1st level of optimization could be dangerous and really beneficial, at the same time. Usually, when you use the 2nd type of optimization, you should optimize your campaigns once or twice a week. The 1st level gives you the chance to do it hourly.

This advertising structure consists of 1 campaign with 1 ad group and 1 target (keyword or ASIN) per campaign. Amazon gives you the ability to optimize every single target to its absolute maximum.

It’s possible to optimize placements, budgets, and bidding strategies for each target. This also allows you to see the exact Top-of-search Impression Share for every targeted keyword or ASIN. Thanks to ToS IS data you know if you should continue pushing the target or pull it back. Even if you are getting great results from a particular target, you still can receive low ToS IS. For example, 20% of ToS IS for the target helps you to understand that you can increase their budget and/or max bid for it, and most likely your ACoS would remain the same.

The drawback of this optimization level is the campaigns’ limit per account. The maximum is 10.000 campaigns per account, both active and paused. So, if we want to get more space, we have to archive campaigns.

! You can use the 1st level of optimization, but I recommend doing your own research for building your KW lists as well. Sometimes, using only software for the purpose might not be enough.

! You can also mix the optimizations, for example, the 3rd and the 2nd levels. This allows you to put more attention and “push” on products and keyword sets that matter the most to your brand. This is what we call the 80/20 rule.

It’s possible to combine the 1st and the 2nd level of optimization but at a smaller scale. For example, the 1st level could be used for exact match targeting campaigns and the second level with broad and auto campaigns. This would not require software to run.