Twice as many consumers start product searches on Amazon than on Google, according to a BloomReach. As a result, 63% of brand marketers plan to increase advertising budgets on Amazon next year. In previous posts, we’ve outlined how to develop a strategic presence on Amazon and how to optimize product pages to rank in product searches. In our final segment, we will outline effective advertising options that can maximize visibility and sales on Amazon.
Amazon has transitioned from online retailer to advertising juggernaut in the past decade. Fifteen percent of marketers indicated in a recent survey that they were using all of Amazon’s advertising products — called Amazon Marketing Services (or AMS). Another 17% of advertisers said that they had a fully developed and fleshed-out strategy specific for Amazon. That is a relatively small percentage, which indicates plenty of opportunity for growth.
Amazon currently offers three core products: Headline Search ads, Product-display ads and Sponsored Products. Sponsored Products and Headline Search both use keyword targeting, while product-display ads are targeted more by types of categories used for competitive placements. All ads run through the Amazon Advertising Platform (AAP), and includes a variety of formats, including: display ads, mobile banner ads, interstitials and in-stream video ads.
The ad product line continues to expand and increase in complexity. Amazon’s non-standard advertising media offerings include: Amazon Video Ads, Billboard Below the Fold, Daily Deals Site Stripe, Marquee Ads, Offer Listings Stripe and Seller Central Ads. Newer ad products are also available:
- Amazon Dynamic Ecommerce Ads: eCommerce Ads introduce Amazon features like Add to Cart and Customer Reviews into display ad units.
- Amazon Mobile Shopping: Banner ad placements on Amazon’s Shopping Apps and the mobile version of Amazon.com.
- Plus: Fire Tablet, Fire TV, Android with Ads, Standard Media and IMDb ad products
Unfortunately, not everyone can take advantage of AMS offerings. Amazon’s Seller Eligibility Criteria include two primary requirements: You must have an active professional seller account and enroll in Amazon Brand Registry to use Headline Search ads. For more information about AMS, check out the following links: How it works, AMS FAQ, Getting started webinar, Advertising specs and policies and Amazon Sellers Education YouTube channel.
Amazon’s Sponsored Products is the primary engine within the AMS suite. Atlantic Equities indicates Amazon is a strong stock marketing investment, as Sponsored Products sales grew more than 100% this year. Revenue is expected to grow to $8.8 billion by 2020 from an estimated range of $1.5 billion to $2 billion last year. Placements on desktop can be above, alongside, or below search results as well as on product detail pages.
Amazon weighs many parameters to choose a winning bid across campaigns. The ad ranking system includes the following factors: daily budget, keyword relevance, ad rank, ad relevance and buy box eligibility. The advantage of an aggressive spending approach is that you’ll get data more quickly. The more insight you have into impressions, clicks and sales, the more effectively you can build high-performing campaigns and decrease spend as optimization strategies make an impact.
New sellers are at a disadvantage when first setting up campaigns. One way to gain traction with AMS campaigns is to go big fast, as mentioned above. Amazon Bid+ will automatically boost ad group or keyword bids on a manually targeted campaign up to 50% when enabled. Amazon often displays ads enabled with Bid+ in the top row of the search results page. The conventional wisdom is that the top row receives higher click-thru and conversion rates, but that also translates to a higher cost-per-click (CPC) and can impact overall spend. Bid+ can’t be used to boost ads that aren’t performing. Bid+ is only available for manual campaigns and reporting is currently limited. To understand how your ads are performing, use the Performance by Placement report to compare individual campaigns using Bid+. Sellers can use this report to view the performance of their campaigns when Bid+ is on or off. This report measures impressions, clicks, CPC, spend, and sales of each Bid+ campaign.
While many Sellers utilize Amazon Campaign Manager for bid management, there are other options available. The Campaign Manager is a less-sophisticated version of Google AdWords, with both manual or automated keyword-bidding options. Additional options include SELLICS (an all-in-one platform), Kenshoo via API (sophisticated bid management platform) and Ignite by SellerLabs (Amazon-specific platform). Determine your level of need based on available resources, budget and revenue goals.
Be sure to build ad campaigns to be profitable, which means understanding your break-even Advertising Cost of Sale (ACoS). As a key performance indicator, the ACoS indicates the ratio of ad spend to targeted sales. The chart below from SELLICS outlines the basic ACoS math:
One of the most effective means of targeting relevant Amazon shoppers with your product is through Amazon Marketing Services. By following the best practices in this article, your brand should have a profitable presence on the world’s most powerful marketplace.
Kent Lewis is the president and founder of Anvil Media.