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What is Search Term Optimization?

“Search term optimization” is exactly what it sounds like — optimizing search terms. But in the context of Amazon, it describes a more specific technique.
Rael Cline
Last updated:
February 9, 2022

“Search term optimization” is exactly what it sounds like — optimizing search terms. But in the context of Amazon, this describes a more specific technique. Search term optimization is a bidding strategy that seeks to isolate key search terms and focus resources on the best converting, most relevant search phrases.

You should always retain a portion of your budget for research and experimentation. However, within an effective search term optimization strategy, that is always done with the aim of finding new search terms to isolate and place within an ‘optimized’ bidding strategy.   

So, how is this done? What is search term optimization? That is exactly what we are going to explain here. 


How does search term optimization work?

The fundamentals of search term optimization are rooted in the way you bid for keywords and the criteria you use to match keywords to the search terms that customers are actually using.

Within a manual PPC (pay-per-click) campaign on Amazon, you first choose whether to target by keywords or by product. When bidding on keywords you choose whether your keywords will appear in search results with a “broad match”, “phrase match” or “exact match”. 

Each of these options have different bid prices and different ways of doing the match. Search term optimization puts the best-performing search terms in exact match campaigns, allowing you to target your bidding on the keywords with the strongest conversion rates. 

Let’s look at matching in a bit more detail to understand why exact match and search term optimization are so important. 

  1. Broad match: With broad match bidding, any search term related to the phrase/word you're targeting appears in the search. So, for example, if you're targeting “kitchen knives”, your product could show up in searches “stainless steel knife for kitchen”. This is helpful because that is a relevant phrase. However, you could also end up winning bids for phrases like “kitchen knife sharpener”, “block for kitchen knife”, or even “toy kitchen knife set” — none of which you sell.  

Obviously, the broader your advertisement is applied, the larger your audience. However, it’s also more likely that you’ll be paying for clicks to your listing from people who may not be interested in buying your particular product. However, a broad match keyword can give you valuable information on what potential customers are searching for — we‘ll come back to this.  

  1. Phrase match: Phrase match bidding allows you to narrow your target search terms to specific phrases. The key feature with phrase match (compared to broad match) is that it allows you to control word order.

For example, a broad match bidding for the phrase “kitchen knife” could also appear for bids on terms like “kitchen bread knife”. With phrase match, any modifying keywords would have to be added to the beginning or end of your ‘seed phrase’. This gives you more control. However, in this specific example, you can see that phrase match has no specific impact on the other, potentially irrelevant search terms for your ‘kitchen knife’ ad detailed above. 

  1. Exact match: Exact match bidding is exactly what it says. It allows you to bid on an exact word or phrase, and only that word or phrase — including plurals. That phrase could be a very common and broad term, like “kitchen knife”. However, exact match campaigns are often targeted at ‘longer-tail’, hyper-targeted keywords/search terms. For example, “Japanese stainless-steel knife”. This minimizes exposure. But when done right, it maximizes conversions — therefore maximizing the efficiency of your ad spend. 

To a large degree, a ‘search term optimization strategy’ revolves around exact match PPC bidding. This allows you to ‘isolate’ specific search terms, target them for maximum effect, and then track and test outcomes. 

Exact match bidding also lets you get the most competitive bid for a term. With both phrase match and broad match, you are forced to bid on a ‘bucket of terms’, that are priced as a group. Specifically for longtail terms, that means higher bid prices that are pegged to the more generic terms in that list. Exact match bidding can not only increase conversion, it can decrease bid costs. Together, that will deliver a far lower ACoS while increasing your total number of sales.   

However, this has to be done with caution. If done haphazardly, exact match bidding can damage the visibility of your product. It’s down to you to pick the right keywords, and doing that really comes down to your understanding of data. 


Analytics tools that can help you identify keywords

You can manually select keywords using multiple unrelated tools and spreadsheet analysis, you can even put your search terms from Google here too. It’s a laborious task to sift through reports with thousands of rows trying to identify new keywords — and that may be only for a handful of products. What if you have hundreds?

Having software that combines all your ad campaign data and decisions in one user interface will save you a huge amount of time. Advanced Amazon customer analytics tools can then deploy machine learning and AI to do a lot of the heavy lifting required to make sense of your Amazon customer data — including keyword identification and analysis. 

The right tools will let you sift through large lists of constantly changing keywords and targeting strategies, expand your list to include synonyms, and use phrase lookups to find undervalued keywords. A good analytics tool will, ultimately, let you invest more time in bidding strategies and crafting optimized product listings. However, there are other ways to find and identify the high-value search terms that will let you execute an ‘isolation’ strategy. We’ll explain this as part of the bidding strategy. 


How to bid and win

The success of the keywords you choose is also dependent on what you bid for them. Every time an Amazon customer makes a search, Amazon creates an auction. If you’re running a relevant ad and are bidding on a keyword that relates to that search term, Amazon will include you in that auction. If your bid is high enough, your ad gets shown and you get an impression. Then, if the customer clicks on your ad, you pay. If your bid is too low, your ad won’t show up in the search results, or you will show up further down on the page.

The problem is that you can only set one cost-per-click (CPC) bid per keyword. If a keyword converts, you will usually want to make sure your bids win as much of the time as is possible.  But if it’s costing too much as a percentage of the sale (high ACoS), you’ll want to reduce the bid to only buy clicks that are cheap. If the search term doesn’t convert at all, then you want to either make it a “negative keyword” or set the bid very low. 


The principle of bid management is figuring out how to isolate your top-performing search terms and take control of your bidding. Search term optimization manages this process. To implement search term optimization, you need at least two campaigns — a research campaign along with your performance-optimized campaign. Depending on your exact strategy, you could use multiple research focused campaigns. What’s important is that you have some combination of auto, broad and phrase match campaigns feeding you data to extract into your exact match campaign. 


How to isolate search terms manually

In Amazon, you can target campaigns in two different ways — Auto, where Amazon decides your keywords and other products to target your ads on, and Manual where you do. With Auto Campaigns, you can set daily budgets and set default bids for ad groups. 

For each ad group, you can set a default bid targeting close match, loose match, substitute and complementary. You can adjust your bid according to placement — top of search, product pages and rest of search. But within that framework, Amazon automatically finds keywords or products that match your product’s category, related products, and your product’s descriptions. 

Automatic Campaigns allow you to discover keyword phrases you may have never guessed that people would search for, meaning you’re casting your net wide. They also deliver things from product targeting campaigns, including converting ASINs, brands, complements and substitutes. 

The first stage to manually creating a search term optimization strategy is to set up an Auto campaign for each group of products. You should then also set up one or two associated manual campaigns. In one of these campaigns, bid solely on broad match keywords. 

You can feed search terms generated from the auto campaign directly into your exact match campaign. If you want to test variations, you can consider placing those search terms in a broad match campaign. However, the main point is to identify the best performing search phrases and isolate them within your exact match campaign in order to maximize their revenue potential.

To create a control loop, once terms have gone into the exact match campaign, you should add them to a negative keyword list in your broad and phrase match campaigns to make sure that they don’t redundantly appear in both. This “isolates” that search term and ensures the next time a potential customer makes this search, your exact-match campaign will pick it up — at your desired bid price — and hopefully a new sale results. 


A search term optimization example

Let’s look at an example: selling Japanese knives. Now you may think straight away — broad match “knife”; phrase match “stainless steel knife; exact match “Japanese knife”.

But what are your customers really searching for? A search optimization strategy will identify this, and it will challenge whether your initial gut-reaction keywords are the best choice.

So, you would first set up an auto campaign — easy and quick to do, and it will produce results. Keywords that may appear here, as selected by Amazon, might include” knife”, “Japanese”, “stainless steel”, “sharp”, “kitchen” or “cooking”. 

From there, you can see what actual phrases customers are using and put them into the manual broad match campaign. One phrase that may be converting highly is “sharp kitchen knife”, with “cook’s knife” and “Japanese knife” all performing well.

You then move these search terms to the exact match campaign. This lets you customize your bidding strategy based on your targeted ACoS, and focus your bidding on the highest converting terms. The final stage is to “isolate” these terms by taking them out of your other campaigns. So instead of just bidding for exact matches of  “Japanese knife” — which may be a high bid price — you can now also bid for “cook’s knife” and “sharp kitchen knife”, which may still give you high conversions, but at a lower cost per click.

Maximizing your search term optimization strategy 

The manual path to improving your search term optimization strategy hinges on iteration and time. You need to set up campaigns and use your PPC campaign to eventually hone in on the best choices. By remaining diligent and continually re-evaluating your keyword and search term choices, you will continuously improve your strategy and outcomes. The result will be more conversions and a reduced advertising cost of sale (ACoS). This process will work, but it becomes increasingly unwieldy the larger your product lines become. 

The only way to really scale an optimized search term optimization strategy is to deploy technology. As we have detailed, Amazon analytics tools can deploy machine learning to overcome the large number of keyword variables, helping you jump start your iteration-based strategy with high-value keywords from the beginning. 

Analytics tools also bring a number of other, broader benefits. For example, they can deliver detailed customer personas, including customer lifetime value analysis, geo-location analysis, basket comparison and purchase pattern documentation. As highlighted earlier, analytics engines do the heavy lifting on how your keywords perform and let you figure out which products should be your most important focus. 

The powerfully accurate picture of both your products and customers painted by analytics tools makes the whole process of creating an optimized search term analysis strategy that much simpler and effective. 


Search term optimization is critical to your Amazon success

The specificity, cost efficiency and competitive advantage that a detailed understanding of keywords and search terms deliver to your Amazon strategy is compelling. 

Isolated search terms allow you to manage the bid on a specific search term rather than an entire bucket of search terms that are related to a keyword. This is the only way advertisers on Amazon can scale while truly managing ACoS and profitability.

Every penny of your marketing budget counts and isolating search terms will help you make sure you're spending those valuable dollars wisely. Plus, by finding a way to isolate search terms automatically with technology, you'll really have the magic formula to scale. With detailed information coming for an analytics tool, you take granular control of your PPC campaigns, identify search term gaps and increase conversions. Being able to subdivide this information across geographies, personas and buying trajectories is even better.

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