May 2018
Amazon is now heavily competing with former advertising giants such as Google in the online marketing realm. From a shopping destination to an advertising platform, Amazon has seen a surge in sellers’ investments in their advertising platform: Amazon Marketing Services. Over 17% of marketers now admit having in place an advertising strategy dedicated to Amazon.
Three core advertising products are offered to professional sellers on Amazon:
- Sponsored Product Ads
- Headline Search Ads
- Product Display Ads
Newer features are also being introduced to leverage the various Amazon products: Amazon video Ads on their streaming platform; Billboard Ads; Daily Deals site stripes; Dynamic Ecommerce Ads.
How to best leverage and integrate these tools within your retail strategy? Let’s focus on the core products to start with.
Sponsored Product Ads
Sponsored Product Ads are the primary tool within the Amazon marketing service suite and are believed to grow to $8.8b by 2020 from $2b in 2017. These campaigns are based on ‘pay- per-click or PPC’ (similarly to Google AdWords campaigns) as opposed to cost per mil (impressions based). For the sellers it means they are charged only if a customer clicks on the actual advertisement, hence indicating a potential interest to grow awareness in or buy a product. They are keywords based, thus allowing for more precise or broader targeting as well as automatic or manual bidding. These ad campaigns can appear in different locations of the search engine results page: at the top, on the right or bottom of the page.
Headline Search Ads
These banner campaigns allow for more creative input as they can feature multiple products at once (up to 3). They also offer the opportunity to feature a catchy advertising copy and a dedicated banner that can appear at the top, on the left or at the bottom of search results pages. They can lead to one of your product landing pages or an Amazon branded store (a dedicated mono-branded store that lives on the Amazon marketplace). As with Sponsored Product Ads, Headline Search Ads are keyword based and can be automatically or manually targeted.
Product Display Ads
These ads appear on a specific product page and are best used when targeting the competition via ‘competitive branded keywords’ or ‘competitive product categories’. They aim at diverting the attention of a potential customer who is going through the ‘consideration phase’ after landing on a dedicated product page.
Strategizing for your campaigns
Keywords
When investing in Amazon marketing services, specifically Sponsored Product Ads, grab the opportunity to invest in long tale keywords as often less expensive and more relevant to a specific product. Splitting between branded and non-branded keywords might also provide some good balance on spend and insights around your campaign performance by allowing to reach a greater target audience.
Branded keywords in particular will help you ‘dominate’ the search page results. Research has shown that in categories like apparel, 90% of campaigns attributed sales are generated by a product other than the one advertised: capturing the ‘page share of voice’ by using branded keywords may well benefit your own sales. Branded keywords also allow you to target your direct competition and potentially steer away their customers or recouping yours. Through branded keywords you also have a chance to directly target your loyal customers. ~55% of searches now happen on Amazon rather than Google, making it a valuable platform to target audiences who are already familiar with your brand and who are possibly close to a point of conversion.
Consult the Amazon customer search term report to find out what customers are searching for when your keywords are triggered. Pay attention to KPIs such as impressions, branded/non branded keywords, and sales.
Automatic vs Manual targeting
Start off with a small investment and consider running automatic targeting campaigns at first. Amazon will target these campaigns to relevant customer searches based on product information, getting your products in front of potential buyers. As in this instance your ads rely on the Amazon algorithm for targeting, costs will be higher so consider using these campaigns for a few months while learning from them. Pay attention to the high performing keywords in automatic campaigns and use them to create your own manually targeted ads to improve your ROI.
Always On vs Seasonal campaigns
It might be valuable to run some campaigns all year round. Despite bigger seasonal and promotional events (holidays, Prime Day, Black Friday), running campaigns all year can help providing continuous insight into your customers and identifying trending keywords in your categories. You might be able to build valuable insights into seasonality and leverage those trending keywords for your more generic product content on Amazon.
Headline Search Ads and Amazon Branded Stores
Headline Search Ads empower you to increase your brand visibility through highly visual campaigns that appear on search page results. They help drive shoppers to your product landing pages or any of your existing Amazon Branded Stores. Amazon Branded Stores, highly customizable, provide a great tool for raising brand awareness and effectively create cross-selling opportunities for your products. They can also boost your newest products by making them visible before the Amazon algorithm surfaces them, thus overcoming the challenge of collecting positive reviews.
However, used alone, these branded stores suffer from low visibility and are not easy to find on the marketplace (similarly to a shelf at the back of your store). Combined with Headline Search Ads they can become a powerful tool to showcase your catalogue at key seasonal times during the year (holidays). According to research, your Headline Search Ads campaigns could account for 30% of your branded store traffic, while the rest still very much comes from organic search and customers clicking on a brand name from a product detail page. It therefore remains paramount to weigh the cost of building these stores and stay focused on what the desired outcome would be from your marketing strategy.
A/B Testing
Remember the importance of testing what you do. Implementing different creative assets and trying different ads copy will set you for success in understanding your target audience and learn to best approach your future strategies. Test different landing pages; creatives; ad copy & messaging; product images. You will learn about what works for certain product categories and during specific times of the year. You will also learn about how your customers respond to different options, thus creating a virtuous cycle to optimize any upcoming campaigns.
Product Content
Whenever promoting specific products through your Amazon Marketing activities, pay attention to your product detail pages. Nothing would be more frustrating than clicking on a Sponsored Product Ad and landing on a poor product page. Make sure your product title is optimized; your images are accurate and clear. Check your bullet points and your product description: are they keyword- rich? Is the information provided accurate? Do you have any enhanced content on the page? Is this something you could easily implement?
Your content is your chance to get a customer to convert. You managed to have them click on one of your adverts (similarly to someone looking through a shop window and deciding to enter the store) so it is your responsibility to ensure their expectations are met; that what has been advertised is indeed what is being offered. For more details on optimizing your Amazon content, please review my other blog post.
Investment Mix and ROI
When budgeting for Amazon Marketing Services, take into account your revenue and margins for your products to assess what percentage of your revenue you’re going to re-invest in Amazon marketing activities. Keep in mind that the minimum daily spend for Sponsored Product Ads is $1.00 and $100 for your Headline Search Ads and Product Display Ads.
Given the importance Amazon is gaining as the ‘go to’ search platform, it is not unlikely that up to 50% of your marketing budget could be dedicated to Sponsored Product Ads.
From experience, investment figures into Amazon Marketing Services have been close to 10-15% of the overall business revenue when first starting to implement these programs. The average ROI has been close to 5x for categories like Writing and Baby products.
The budget split, balanced between branded and non-branded campaigns (roughly a 50/50 split) proved the success of branded campaigns for brands in the Writing categories where sales have been on average 4 to 5 times bigger.
Sponsored Product Ads remain the option of choice when it comes to generating ROI: on average 6 times more impressions; twice as much generated sales and a lower advertising cost of sales (often at par with Headline Search Ads) in comparison to Product Display Ads.
Whenever possible consider running additional campaigns and invest in key promotional events: Prime Day; Black Friday; Christmas; January Sales; Summer; Back to School. Be creative and try running dedicated promotional activities for your brand only: you could generate a 4 x return on advertising spend in just a few days.