Amazon’s growing popularity amongst brands and small- and medium-sized businesses has pushed the competition for ranking and discoverability. This is why it’s important to also have solid Amazon ad campaigns to support your linking optimization efforts
Amazon Pay-per-Click (PPC) allows sellers to create advertisements that target specific keywords. It’s a great opportunity for your brand to increase your chances of appearing on the search result page of customers looking for your product. This amplifies your visibility which in turn, can help boost sales and conversion.
Advertising on Amazon can seem daunting especially for new sellers. To get around this challenge, most sellers choose to partner with an Amazon agency like Brandvault or hire an Amazon PPC expert to manage their ad campaigns. In this blog, we’ll talk about the five key things you should know about Amazon sponsored ads to get you started.
Learn about the different types of Amazon Ads
There are different types of Amazon ads that can help you reach customers. With a friendly, positive, and informative tone, these Amazon advertising options that can help you identify, attract, engage, and keep your shoppers throughout their shopping experience. These also range from self-service solutions to managed services both on and off Amazon.
- SPONSORED PRODUCTS: These are the go-to product listings that show up on both the search results and product detail pages, as a pay-per-click, keyword-targeted display ad, which leads directly to your product’s listing page. To gauge how well your Sponsored Product Ads are doing, you can take advantage of the native reporting tools on Amazon that provide information on clicks, spend, sales, and ACoS
- SPONSORED BRAND: Sponsored Brand Campaigns provide a great way to get your products seen above, below, and alongside search results – all through a pay-per-click, auction-based pricing model. You have the flexibility to send customers to either a customized product page or your Amazon Store. With a maximum of three unique products for your ads, you can customize and test the image, headline and landing page to get the best performance. There is also a reporting feature which will show you clicks, spend, sales, estimated win rate for keywords and ACoS (Advertising Cost of Sales) so you can monitor the success of your campaigns.
- SPONSORED DISPLAY: Product Display Ads are a positive, informative way to cross-sell or upsell to your customers. This type of advertisement is available to all sellers, not just those on the platform. Amazon divides this category into display, video and custom ads. You can find display ads in multiple spots, like product detail pages, customer reviews, offer listing page, search results, abandoned cart emails, follow-up emails and recommendations emails. To measure your performance, you can utilize a reporting tool that shows clicks, spend, sales, ACoS, detail page views, average cost-per-click, etc.
- AMAZON STORES: Amazon Brand Stores is a free feature that allows you to showcase your brand and products in a multi-page customized URL. This is a great way to help shoppers explore your full range of products. You can choose from predesigned templates to tell your brand story and highlight your top selling products or new launches. You can also measure your store’s success using metrics like sales, visits, page views, and traffic sources.
Advertising on Amazon presents an opportunity to stand out in an overcrowded market, but it also comes with challenges. A strategic and flexible plan is necessary to keep up with the pace of the ever-evolving marketplace. We highly recommend that you check out Amazon’s Learning Console to learn more about your ad options. This will be of great help when creating your own ad campaigns or explaining what you need to your Amazon PPC partner.
Define your Amazon PPC campaign goals
A clearly defined goal will help align your vision and help guide your direction and next steps. So before getting into Amazon PPC, make sure that you understand your business goals. This is crucial so you can create PPC ad campaigns tailor-fit to your desired outcomes.
Amazon advertising goals can be grouped into four categories: awareness, consideration, purchase, and loyalty.
- AWARENESS: With this as your goal, your focus is to expand your audience and have more people discover your brand and products. You want customers to learn your brand story and keep your brand top-of-mind while they shop.
- CONSIDERATION: With this as your goal, your focus is to engage shoppers as they research during the decision-making process before they buy. You help customers understand what sets your brand or products apart from other options, and why they should choose you when they make their purchase.
- PURCHASE: With this as your goal, your focus is to drive conversion and sales. We want to help potential customers make the decision to buy our product. It’s crucial that the listing copy is informative and easy to read. This is also where the quality of your image sets and A+ content plays a huge role.
- LOYALTY: With this as your goal, your focus is to engage and re-engage your existing customers. This will help buy your products again and become repeat customers. You can make then build brand loyalty by providing excellent customer service, valuable content, and a positive overall shopping experience.
Start you goal-setting activity by looking at some of these additional examples. You can then narrow it down further to make sure that you have a SMART goal.
- Improving discoverability
- Increasing conversion and market share
- Launching new product
- Liquidating underperforming products
- Targeting and re-targeting your ideal customers
- Achieving a specific profit margin
- Achieving a specific return on ad spend (RoAS) and advertising cost of sales (ACoS)
- Increasing organic results ranking and brand awareness
- Outbidding competitors who offer similar products
- Improving campaigns for seasonal events like Black Friday and Prime Day
Decide on performance metrics or KPIs
Successful Amazon sellers recognize the importance of key performance indicators (KPIs) and metrics to evaluate their Amazon advertising campaigns. To best measure your goal, you must use a realistic and achievable KPI or two. Monitoring these KPIs helps to ensure each ad campaign is optimized and running at its best. Let’s dive in and look at some of the most essential KPIs you should use and track.
- COST PER CLICK (CPC): Depending on what you’re trying to accomplish, your CPC goals may vary. Popular keywords typically have a higher cost per click. To get a better understanding of how your budget could affect your success and visibility, it’s helpful to keep an eye on this metric. If the CPC is too high for your budget, you can look into doing some keyword research to find keywords that are less expensive but still generate the same or even higher traffic.
- CLICK-THROUGH-RATE (CTR): It’s important to get an understanding of how people are engaging with your ad. If your click-through rate is low, that could affect how many people make a purchase. Generally, a 0.2% CTR is considered an average level on Amazon. So, it’s important to try your best to maintain a positive, friendly, and informative tone for your ad to ensure it reaches its desired audience.
- CONVERSION RATE (CVR): Having a high conversion rate is ideal. If your click-through rate is high but your conversion rate is low, it could be because the message you’re communicating is either wrong or misleading, causing people to shop elsewhere. For more expensive products ($100+), the conversion rate is typically lower, as customers will likely compare prices before making a purchase.
- ADVERTISING COST OF SALES (ACoS): One of the most helpful metrics for Amazon sellers is ACoS. Using ACoS, you can get a sense of how cost-effective your ads are. It’s a great way to measure the profitability of your ad by determining how much you’re spending to make a sale. To get started, your break-even ACoS can be a great benchmark for new keywords or product areas.
- TOTAL COST OF SALES (TACoS): This metric helps you measure the relationship between total ad spending and total revenue generated, giving you an overall view of your ad performance. Similar to ACoS, provides a comprehensive view of the advertisement expenditure performance in comparison to the overall revenue generated. It’s ideal to keep this ratio stable or even lower it over time, as this indicates an increase in organic sales and efficiency.
Generally speaking, it is beneficial to use ACoS (Advertising Cost of Sale) as a metric to measure the overall performance of your Amazon campaigns. This metric will help you to gauge the effectiveness of your campaigns and compare those results to similar Amazon sellers and competitors in the same categories.
You may have different KPIs depending on the product categories, marketplaces, and ad formats that you are using, but it’s important to remember to only compare your advertising goals to similar sellers and competitors.
Check your progress and audit your PPC campaigns
Sellers who succeed selling on Amazon are always continuously reviewing and adjusting their listings, brand stores, and ad campaigns. This has to be an ongoing process so you can tweak and adapt to the changes in the platform. You cannot rely on a set it and forget it plan
Keeping track of the different types of ads and their respective performance allows you to make informed decisions when optimizing your campaigns. It is recommended to set up a campaign, evaluate the results after a week, and then make necessary changes and adjustments. With Amazon, it is essential to consistently review and modify your advertising strategy in order to acquire the desired outcome.
Spend a week running your campaigns before adjusting and optimizing them according to the results. With regular assessment, you can ensure that you achieve the outcomes you envisioned. This will help you to figure out which types of ads are working best for your audience, and decide on the budget that will give you the most optimal outcome. Don’t forget to set bids, budgets and keywords, and let your campaigns run for a week before making any changes.
It’s important to regularly review your paid search goals, even if they are clear and well-defined. Auditing your progress can help you spot areas that need improvement and come up with fresh ideas or strategies.
If you’re seeing positive results, you can use this time to set sub-PPC goals or metrics for individual campaigns or product groupings. This way you can make sure you’re staying on track to reach your larger business and advertising objectives.
Explore Amazon Advertising with Brandvault
People’s shopping habits have been forever changed by the pandemic. This is why it’s crucial for both small and big business to understand and leverage digital advertising. And with more than 300 million active customer accounts, Amazon is a great place to connect with potential customers.
Some of the world’s leading brands have trusted us for years to help them drive the right messaging in the Amazon marketplace. Our team of Amazon experts can help you develop solutions focused on increasing traffic and improving conversion rates, with the end goal of increasing your revenue and profits. We can help you define your Amazon advertising campaign objectives, choose the right type of Amazon ad, set SMART goals for key KPIs like ACoS and RoAS, as well as automation options, to ensure efficient and responsive PPC campaigns. You can look at one of our brand case studies on Amazon to see how we help our brand partners succeed.
We can also produce expertly crafted images, videos, and copy for your ad campaigns. We can choose from an array of creative formats – including over-the-top (OTT), audio ads, sponsored ads, and display – to showcase your products and share your brand story.
We’re excited to be your Amazon solutions partner. Click the Contact Us button below to make the first step to optimising your listing and growing your brand.