Amazon is everywhere. It’s conquered Whole Foods. It’s winning Oscars. It’s deploying drones. It’s manufacturing tablets. It’s probably standing right behind you. Oh yeah, and it occasionally sells things online like books, hats, and horrifying sequin pillowcases with Nicolas Cage’s face on them. You might have also heard that it’s entered the advertising game with Amazon Advertising.
Think Don Draper meets Jeff Bezos, only with less hair and more world domination.
Amazon Advertising is quickly becoming a key component in any eCommerce marketing strategy. So to help you reach Amazon-esque levels of domination in your industry, here is a breakdown of how you can best use Amazon Advertising to grow your business and why you should do so sooner rather than later.
What is Amazon Advertising?
Amazon Advertising (formerly Amazon Marketing Services, or AMS) was launched in 2018 as an advertising solution for Amazon sellers. The service allows vendors to promote their products directly to their target markets.
Amazon Advertising encompasses a range of offerings, including:
- Sponsored Products
- Sponsored Brands
- Sponsored Display
- Display Ads
- Video Ads
- Amazon DSP
Together these tools allow you to implement ads anywhere from the first page of Amazon search results to its product detail pages and beyond while also providing the ability to build a more robust brand presence. You can find a detailed breakdown of each on Amazon Advertising’s product pages.
Likely this list of offerings will grow and evolve, but they all strive towards one purpose — to help you better reach and engage shoppers at every stage of the sales funnel.
Your company won’t necessarily need to implement all of them, but understanding what each provides can help you determine how to best use Amazon Advertising to benefit your business.
Speaking of which…
Why You Should Use Amazon Advertising
Accessibility. Exposure. Competitiveness. That’s why.
Say you’re sitting in a marketing session discussing ad strategies. Your team flips through the routine list of greatest hits from Google Ads to Facebook, Instagram, and the like. Then someone asks if there are any other ideas. You raise your hand like a boss and blow the room’s collective minds with Amazon Advertising. Specifically, with its ability to engage every level of the buyer journey.
Most other ad platforms act as a third-party outlet promoting awareness of your products. But Amazon Advertising provides direct access to every aspect of the sales funnel from the awareness stage straight through to purchasing. In other words, Amazon’s ad services allow merchants to reach potential buyers (and vice versa) in ways other advertising platforms cannot. Most crucially, this includes the bottom of the conversion funnel.
Best of all, this service applies to both referral traffic and direct search. Regarding the latter, Amazon previously required merchants to rely heavily on organic placement when it came to product searches. But its online marketplace has become so competitive that solely focusing on organic is no longer viable, making Amazon ads a necessity in standing out from the pack.
The bottom line is: Are you selling a product people can buy online? If the answer is yes, then you should be advertising on Amazon.
Not sold on Amazon Advertising yet? Well, here’s something everyone loves: NUMBERS!
3 Stats Every Seller Needs to Know About Amazon Advertising
Amazon is one of the fastest-growing businesses in advertising, and advertising is one of Amazon’s fastest-growing businesses. Sound confusing? Maybe. Is it true? Absolutely.
To prove it, here are some of the most recent statistics showcasing this meteoric rise:
● Amazon generated $10.1 billion in advertising revenue in 2018
Amazon’s financial reports from 2018 showed $10.1 billion in revenue for its “Other” category. According to them, this “primarily includes sales of advertising services.” In Q4, revenue alone was $3.4 billion, up a whopping 95% from the previous year.
● 52% of online product searches occur on Amazon
All hail the king! More people are now using Amazon instead of Google to find products. Where previously the opposite was true, over the past three years, the two tech giants have traded places with 54% of product searches occurring on Amazon and 46% on Google. Perhaps even more impressive is that 90% of all product views on Amazon are generated by the company’s own product search.
● Amazon ranks in the top 3 companies for net digital ad revenue
Amazon is quickly gaining market share from the top advertising players. As of 2018, they ranked third in the United States for digital ad revenue, surpassing Microsoft. In the coming year, Amazon’s market share is projected to continue to grow, gaining further on Google and Facebook, whose numbers we should note are bolstered significantly by YouTube and Instagram, respectively.
There you have it. Numbers don’t lie. And they make a very strong case for leveraging Amazon Advertising as a great way to increase eCommerce sales. But what’s the best way to do so?
Glad you asked.
An Effective Amazon Advertising Strategy
1. Know Your Goals
Do you want to drive more sales or boost brand awareness?
While diving right in and running an Amazon ad is tempting, most campaigns succeed or fail based on decisions made well before the first ad dollar is ever spent. It’s important to identify the key metrics you want to track to verify the success of your ads.
If driving sales is a priority, whether overall or for a specific product, generating conversions will be your primary goal. The best way to track success is with the Advertising Cost of Sale (ACoS) metric. This is calculated by dividing your total ad spend by your total sales from advertising. Set a target ACoS at the outset to help determine sales goals.
If you’re focusing on brand awareness, then your metric of success will be impressions (or the number of times your ad is viewed). Again, set a target impression total and determine which cost-per-click bids will allow you to win more keywords, appear above competitors, and achieve that target.
2. Implement the Right Tools, Together
Amazon offers a lot of advertising opportunities within its ad platform. So make sure you understand these products and how they can help you achieve your goals.
Most sellers will start with Sponsored Product ads. These operate similarly to Google ads on a pay-per-click (PPC) model, where you bid on keywords to promote individual products. Based on your ad relevance, they will appear to shoppers in search results and on product detail pages. They are primarily used for driving sales and utilize ACoS as their key performance indicator. The nice thing about Sponsored Product ads is that they seamlessly blend in amongst other product listings; however, they are not the only option for advertising on Amazon, nor should you limit yourself to implementing these ads alone.
Sponsored Brand ads (previously known as Headline Search ads) are a great way to simultaneously promote several products at once, while also boosting brand awareness. They work on a pay-per-click, keyword-targeted model, displaying multiple products alongside a headline. When clicked, they direct visitors to a landing page. This landing page can be your Amazon Store, which is a free-to-create page featuring your brand and other products. Creating a multi-page storefront directly on Amazon filled with high-value content is a great way to stand out. And as a bonus, the built-in analytics tools that come with your store can help you strategize which paid ads to run in the future.
These tools, along with Product Display Ads, are the big players in Amazon Advertising. But don’t overlook the potential of others, like video ads for branding or the Amazon DSP (Demand-Side Platform). These tools can be more complex and costly to implement, but their potential is huge for impacting your business.
3. Prioritize Products and Optimize Their Detail Pages
Carefully pick products to advertise that are most important to your brand and customers.
Typically, these products will be your most popular sellers, items that are in season or otherwise in demand. Be sure these products are in stock and priced competitively.
Ideally, you will want to pick products with a high Buy Box percentage (90% or higher) and receive a high number of unique product detail page visits.
Make sure that those product detail pages adhere to the 3 C’s by being Clear, Concise, and Compelling. Use high-quality images, descriptive titles, and relevant product information with at least five bullet-point highlights. Your ad will get shoppers in the door, but your product details page will make the sale, so take extra care when crafting it.
4. Budget Wisely
Come up with an overall advertising budget for Amazon, and allocate that budget accordingly to attain the greatest amount of coverage.
Initially, it is a best practice to put the majority of your budget into Sponsored Product ads, then divvy up the rest between Sponsored Brand and Product Display ads. This way, you can see which ads work best for you in what locations.
The key here is to begin prioritizing Amazon in your marketing strategy. If all goes well, it will convert just as well, if not better, than your website. So invest your time and budget in Amazon Advertising the same way you would for other advertising platforms like Google or Facebook.
5. Test and Optimize
One of the best aspects of Amazon Advertising is that it provides sellers with data and statistics they would not otherwise receive.
Take full advantage and use this insight to optimize your products and ads to their fullest selling potential.
Whether optimizing copy to impact CTR, altering keywords for better ACoS, or updating product details to increase engagement, make sure you are constantly eliminating underperforming content and allocating your budget where it provides the best results.
Plan on an initial testing and discovery phase and then increase your spend once you’ve found that winning ad. Then test some more. Watch the revenue pour in, and high-five everyone on your team for being so awesome.
Take Advantage of the Future of Online Advertising
Don’t be surprised if in a few years Amazon is at the top of the eCommerce advertising game. We’re all looking for that extra something to propel our business ahead of competitors, and right now, that means taking advantage of Amazon Advertising because very soon everyone else will be. So why not get ahead and implement Amazon into your omnichannel marketing mix today? You know you want to.
Understandably, using Amazon Advertising is easier said than done, so recruit a professional eCommerce PPC management agency if you need additional help. An agency is especially useful if you don’t have the time or resources to commit to a new marketing channel, but still want to take advantage of all it has to offer. Check out our Amazon Advertising services to learn more.
Any way you look at it, Amazon is the past, present, and future of eCommerce. And we’ve only scratched the surface on the ways its advertising platform can help your business grow stronger. If you have questions, we’re to help. But we think it’s safe to say we already know what you’re thinking: Can you get that Nicolas Cage pillowcase in purple?
Yes, yes you can.