Established in 2012, the Amazon Advertising platform allows you to get your products highlighted on the largest online retailer in the world, which can help with brand awareness and product visibility, with the ultimate goal of increasing sales.
Are you interested in learning more about the Amazon advertising strategy? Then continue reading.
What is Amazon Advertising?
Amazon Advertising (previously AMS or Amazon Marketing Services) is a service similar to Google’s pay-per-click ads in that sellers only get paid when customers click on ads (regardless of whether or not the item sells).
Amazon’s advertising business is expanding quickly, particularly as the company diversifies its product offerings across its ecosystem. Amazon DSP (Demand Side Platform) has enabled retailers to programmatically buy display and video ads at scale and target audiences on Amazon.com, Fire TV Sticks, IMDb.com, Kindles, Freedive, apps, third-party sites, apps, and platforms.
What Is the Process for Amazon Advertising?
Similar to other Internet-based advertisements, Amazon advertising strategy utilizes a lightning-fast bidding structure. When Amazon chooses which ad to display on a certain page, multiple Ads compete. Budget is only one of the elements determining the winner, as Amazon also selects the most profitable Ads using a rating system.
Once your Ad is chosen, it appears on Amazon’s search page. You get charged each time someone clicks on your advertisement. This model, known as Pay-Per-Click (PPC), has the advantage of allowing you to display your Ad as frequently as you want to increase brand awareness. No matter how high your bid is, if you don’t target it appropriately and few people click on it, Amazon will drop its ranking and display other Ads instead. This explains why “Amazon never displays my Ad,” is one of the most prevalent complaints about Amazon Advertising.
Benefits of Amazon Advertising
There are numerous advantages to advertising on Amazon:
- Advertisers desire a high-quality, brand-safe environment.
- Shortening the sales cycle
- Enhancing product visibility and sales history
- Increasing brand recognition
- Obtaining important insights on shifting consumer habits and adjusting advertising to reach a more targeted audience
- A plethora of purchasing journey data on who your customers are and how they buy
- Discovering the most effective techniques to acquire clients at any particular time
- Keeping track of your results and making data-driven decisions.
Amazon Advertising Model
Amazon Advertising is a pay-per-click (PPC) mechanism that differentiates from other marketplaces, such as eBay. The PPS (pay-per-sale) funding mechanism is supported by eBay Sponsored Listings.
Relationship Between Ads and Organic Search on Amazon
Ads and organic search on Amazon have a relationship. The platform’s purpose is to generate revenue by displaying high-converting and best-selling products that are related to the inquiry. As a result, Amazon aims to emphasize products that are expected to sell the most, i.e. products with a history of excellent sales and feedback.
As a result, as sales and feedback increase, products rise in organic rankings.
Who Is Eligible To Get Amazon Advertising?
Anyone with a Seller Central account can presently participate in Amazon Advertising, but a Vendor Central account is required to fully utilize its features. This will allow you to generate any type of Ad as well as sell your products on Amazon.
What Is The Difference Between A Vendor Account And A Seller Account?
A Seller account differs from a Vendor account in that Sellers list, price, and advertise their products, whereas Vendors sell their products to Amazon, which then lists and sells them to its consumers.
Another distinction is that Vendor product buyers will notice a “Sold by Amazon” notification on the product page. This can increase their trust in the product, resulting in increased sales.
Sellers also avoid Amazon seller expenses such as referral, fulfillment, and even having an account. Instead, they pay a minimal monthly charge to sell an infinite number of things. This cost also includes Amazon fulfillment and gift-wrapping choices.
The most significant distinction is that Sellers take advantage of all of Amazon Advertising’s marketing capabilities.
Types of Amazon Ads
Amazon sellers have a choice of ad formats and placements to pick from when choosing sorts of ads for campaigns, including as Amazon Sponsored Products, Sponsored Brand, and so on. Further details regarding specific ad categories can be found below.
#1. Sponsored Products Ads.
The typical product listings that show on search results and product detail pages are known as Sponsored Products. These are pay-per-click, keyword-targeted display ads for specific products. The link redirects to the product information page.
Use a reporting platform that provides your advertisements’ clicks, spending, sales, and advertising cost of sales to gauge the effectiveness of your Sponsored Product Ads (ACoS).
#2. Campaigns for Sponsored Brands.
You may offer keyword-targeted ads for numerous items above, below, and alongside search results with Sponsored Brand Campaigns. They use a pay-per-click, auction-based pricing mechanism. You can direct the customer to your personalized product page or your Amazon Store.
You can display up to three distinct goods in your ads, as well as edit and test the image, headline, and landing page.
There is a reporting function that provides your ads’ clicks, cost, sales, the estimated win rate for keywords, and ACoS. (Advertising Cost of Sales).
#3. Product Display Ads
Product Display Ads are pay-per-click ads with the primary goal of cross-selling or upselling to your consumers. Unlike the rest, this inventory is available to all marketers, not only those selling on the platform. Display, video, and custom are the three divisions of this category on Amazon.
Display ads appear on product detail pages, customer review pages, the top of the offer listing page, and below search results. They’re included in abandoned cart emails, follow-up emails, and suggestions.
You can utilize a reporting tool to track your campaign’s clicks, spending, sales, advertising cost of sales (ACoS), detail page views, average cost-per-click (ACPC), and so on.
#4. Video Ads
Video Ads can be placed on Amazon-owned sites such as Amazon.com and IMDb, as well as on Amazon devices such as the Fire TV and various web properties. You do not have to sell things on Amazon to purchase Amazon video ads.
#5. Amazon Stores
Users can promote their goods or business on their own multi-page Amazon stores. Brands receive an Amazon URL and traffic metrics.
#6. Amazon Native Ads
On a brand’s website, Amazon Native Ads can be displayed. They include bespoke ads, search ads, and recommendation ads.
6 Ways for Improving Amazon Ads Advertising
With all of the products on Amazon, you may be skeptical that the platform can generate a profit for your company. Fortunately, there are a few things you can do to distinguish yourself from the crowd in the enormous Amazon marketplace. It only takes a well-informed Amazon advertising strategy to get started.
Here are six ideas to get you started on the right foot.
#1. Develop Well-Structured Campaigns by Product Category
If you’re an experienced AdWords advertiser, you’ve probably already mastered this. With Amazon’s ad platform, you can utilize your AdWords organizational skills to structure your campaigns and ad groups. The ideal technique here is to create a distinct campaign for each of your primary product categories, and then create more focused ad groups within each campaign. Assume you sell women’s athletic apparel; you can select to start with three of your best-selling items:
- Workout pants for women
- Workout tees for women
- Sports bras for women
Create ad groups around more precise categories for each campaign. For example, in campaign #1, you may have three ad groups: women’s yoga trousers, women’s jogging pants, and women’s leisure pants. Finally, for each ad group, develop a list of relevant keywords (I’d recommend 15-30 keywords per ad group). For each term grouping, you’ll then create suitable ads.
A robust account structure will ensure that your ads are relevant, saving you money and increasing your Return. This is a crucial tip for reaping the benefits of advertising on Amazon.
#2. Write a Captivating and Timely Ad Copy
Make sure the wording of your ads is not just true in terms of what you’re selling, but also creative and humorous if feasible. Distinguishing in Amazon’s complex search results is more critical than ever. A sense of urgency might also be beneficial.
#3. Make Your Ad Text as Detailed as Possible
Your ad copy should also be quite detailed in terms of what you’re selling. For instance, if you’re selling a water bottle, I’d like to know how many ounces/cups of water it carries, if it’s BPA-free, if it keeps my water cool for a specific number of hours, and so on. While it may be difficult to reveal all of this information in the ad text, it is critical to provide the most important facts.
#4. Place bids on well-known brands that sell comparable goods.
Don’t forget about your well-known competition when thinking of keywords to bid on. For example, if you offer backpacks, you should bid on phrases such as “L.L. “L.L.Bean backpacks” and “Northface backpacks” since they are well-known brands that are frequently searched for and purchased. This will give you exposure and allow you to pursue someone to purchase your far cooler, lesser-known brand-name backpack.
To uncover your top competitors, conduct a generic Amazon search for products in your vertical – say, “backpacks” – and check which brands appear most frequently in the search results.
#5. Try All Three Ad Formats
While sponsored product ads may appear to produce the fastest and most visible ROI, headline search ads may lead to more loyal, repeat purchasers. Experiment with all three ad formats to determine which gives the most returns, and then re-allocate your budget based on the results of your campaign once your statistics have painted a clear picture.
#6. Use Negative Keywords (& Be Conservative with Match Types)
Negative keywords, like when advertising on Google, is critical to avoiding wasted spend from irrelevant clicks. For example, if you’re selling musical flutes and bidding on the word “flutes” with a broad or phrase match, someone could type in a champagne flute and still see your ad. If they then click on your ad by accident, you’ll be paid for a click from someone looking for a $10 glass rather than a high-quality musical instrument.
It can also assist to be more conservative with your match types, avoiding broad matches and emphasizing phrases and exact matches. Make sure to do some keyword research to ensure you’re targeting the proper words.
How Can I Tell Whether My Ads Are Effective?
As the expression goes, the proof is in the eating: just watch your sales soar! But, Amazon has a useful metric called ACoS. (Average Cost of Sale). This tells you how much each sale costs you. The lower your ACoS, the better: if you sell a $10 product and spend that amount on ads, you will have an ACoS of 100%—i.e. You spend exactly as much as you earn. But, if you simply spend $1 on advertising, you will have a 10% ACoS and a 90% profit margin.
Amazon’s measurements make this easier. Amazon is now offering monthly data, allowing users to sort sales by date, to aid advertisers even more. This increases the available data by allowing you to test your campaigns more thoroughly.
What is the Cost Of Amazon Advertising?
So, how much do Amazon ads cost?
According to Rob Sieracki at Practical Ecommerce, the average cost per click on Amazon is rarely more than $0.35, making it more cost-effective than search ads on AdWords or Bing Ads and equivalent to some of the lowest CPC on Facebook ads or Google displays. Considering that Amazon searches reveal a high level of commercial purpose, they are encouraging numbers!
Conclusion
The ever-increasing competition in the ecommerce industry is boosting digital ad spending on marketplaces. As a result, Amazon’s advertising business is expanding rapidly, particularly as it diversifies its ad solutions across its ecosystem.
Amazon advertising presents both potential and challenges. As a result, sellers need a comprehensive and adaptable advertising campaign to stand out in a saturated market. They must also be adaptive in the ever-altering marketplace situation.
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