Posted by Nojus Latvinskas
Running successful Amazon PPC (Pay-Per-Click) campaigns requires strategic keyword management. A common concern is keyword cannibalization, where multiple ads from the same seller might compete against each other. However, in the context of Amazon's advertising system, keyword cannibalization is actually a myth. On the other hand, sales cannibalization, which occurs when you're already ranking high organically but are still bidding on the same keywords, is a real issue that can negatively impact your ROI.
In this blog, we will clarify why PPC keyword cannibalization does not exist on Amazon and focus on the very real problem of sales cannibalization.
Contrary to popular belief, Amazon does not allow your ads to compete against each other in the ad auction. If you are bidding on the same keyword across multiple campaigns or match types, Amazon will decide which of your ads to display based on the highest bid, relevance, and placement opportunity. This means that your ads will not be pitted against each other; instead, they will appear at different times or in different ad placements.
If you are running multiple campaigns targeting the same keyword (for example, using both broad and exact match), Amazon’s algorithm determines which ad to show based on the strength of the bid, the ad’s relevance, and the opportunity for better placement. Amazon ensures that only the best-performing ad from your campaigns appears for a given search term at a time. This prevents your own ads from competing against each other, effectively eliminating the concept of PPC keyword cannibalization.
Sales cannibalization, however, is a very real phenomenon on Amazon. This occurs when you are already ranking high organically for a keyword, but you also run ads on that same keyword. In this case, your paid ad may appear above your organic listing, leading customers to click on the ad instead of the organic result. This results in unnecessary ad spend, as the customer likely would have found and purchased your product through the organic listing.
Sales cannibalization usually occurs in the following situations:
Imagine you’re selling stainless steel water bottles and you already rank #2 organically for that keyword. If you also run a PPC ad for the keyword “stainless steel water bottles,” your ad will likely appear at the top of the search results, above your organic listing. A customer who would have clicked on your organic listing now clicks on the paid ad, resulting in a fee that could have been avoided.
While keyword cannibalization is not something you need to worry about in Amazon’s PPC system, sales cannibalization is a legitimate concern. Here are strategies to mitigate the impact of sales cannibalization and optimize your Amazon PPC campaigns.
Rather than worrying about keyword cannibalization, focus on targeting different keywords based on the customer’s purchase intent. This helps ensure that your campaigns address different stages of the buyer’s journey and do not overlap unnecessarily.
To ensure your campaigns are focused and relevant, use negative keywords to block certain terms in one campaign while targeting them in another. This prevents your ads from showing for irrelevant searches or across overlapping campaigns.
For instance, if your exact match campaign is targeting “stainless steel water bottles”, you could add negative keywords like “plastic” to ensure your ads only show for searches highly relevant to your product.
The key to avoiding sales cannibalization is monitoring your organic rankings. If you’re already ranking high for certain keywords, consider pausing or lowering your bids for those keywords in your PPC campaigns.
Focus your PPC efforts on keywords where you’re not already ranking organically, or where you need more visibility, rather than paying for clicks on keywords that are already bringing you traffic organically.
Amazon’s search term reports can help you identify where your paid ads are cannibalizing your organic traffic. By analyzing which search terms are driving paid clicks and comparing those to your organic rankings, you can determine which keywords may not need PPC support.
In some cases, bidding on keywords where you rank organically can be part of a brand defense strategy. For instance, if your competitors are running ads on your branded keywords, it may make sense to bid on those terms to protect your brand and ensure competitors don’t overtake you in the paid search results.
However, always weigh the cost of these defensive strategies against the potential of sales cannibalization.
While Amazon PPC keyword cannibalization is a myth, sales cannibalization is a real challenge that can hurt your PPC ROI. Amazon ensures that your ads do not compete against each other, eliminating internal bidding conflicts. However, sales cannibalization happens when paid ads appear for keywords you already rank for organically, resulting in unnecessary ad spend.
To avoid sales cannibalization, focus on targeting new keywords with your PPC campaigns, monitor your organic rankings, and use negative keywords to prevent overlap. By refining your strategy, you can optimize your ad spend and improve overall campaign performance.