Do you want to be more successful with Amazon advertising?
With millions of active customers, Amazon is the perfect place to grow your business. However, it’s not as simple as putting up products and waiting for sales to come in.
Sometimes, you may need the help of ads. So, if increasing sales with Amazon is your goal, then this post is for you.
In this post, I’ll explain Amazon advertising and its many benefits. I’ll then share an Amazon ad success case study. Finally, I’ll outline the top Amazon advertising strategies to help you grow sales.
Let’s dive in!
Top Tips for Amazon Advertising
- Amazon advertising is a paid advertising platform with a pay-per-click (CPC) model that enables you to pay only for the ads that customers click on.
- There are six types of Amazon ads: sponsored products, sponsored brands, display ads, stores, audio ads, and video ads.
- There are many benefits of Amazon advertising, including increased revenue and brand awareness.
- Amazon ads case studies prove how successful brands can be on Amazon. One example is an NP Digital client who optimized their existing ads and saw a conversion rate improvement of 22 percent and a month-over-month sales increase of 23 percent.
- Costs vary, but the average Amazon ads CPC is $0.97 per click.
- You can get started on Amazon advertising right away. However, you should take care to set specific goals, choose the right advertising campaign, set your budget, choose the right products to promote and the right audience to promote to.
What Is Amazon Advertising?
Amazon advertising is paid advertising that runs on a pay-per-click model. Through them, you can feature your product listing at the top of Amazon’s search results for chosen keywords.
Rather than paying upfront for your advertising, pay-per-click ads mean you only pay when someone clicks to view your product.
PPC is very efficient because you only have to pay when you know you’ve reached your target audience. It’s still up to you to get the conversion and sell your product, but Amazon advertising gives you the opportunity to do this.
Ultimately, Amazon is a search engine and, as with most search engines, your click-through rate drops considerably if you’re not in the top few results. Building this presence organically takes time though, so having an Amazon advertising strategy is a great way to gain exposure quickly.
Benefits of Amazon Advertising
People lead busy lives. One of the reasons Amazon has become so popular is that it’s convenient.
- It gives people instant access to a huge array of products.
- It makes checkout incredibly simple.
- It offers fast delivery, so people get their hands on their purchases quickly.
- People don’t have to leave their houses to buy products.
Amazon respects the fact that people’s time is valuable, and that’s one of the reasons it’s been so successful. It’s also a key reason why Amazon ads are so beneficial for businesses.
In addition, a recent study my team performed showed that over time, increased presence on Amazon also led to increased traffic and purchases on home sites as well for a variety of companies.
People don’t have the time to search through pages two, three, and four of Amazon’s results. They expect to find the best results at the top of page one, and, if your product isn’t there, then your sales are going to suffer.
This is further complicated by the fact that it’s hard to distinguish your brand from the competition on Amazon. When you sell products on your own e-commerce store, you’re in complete control of your branding; however, when you sell on Amazon, you’ve got to work within its regulations.
Limited control over how you build your brand means you’re incredibly reliant on turning up at the top of the search results.
The proof is in the return on investment.
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Creating an Amazon ad can bring you instant results, and businesses like Empire Case, a mobile phone and tablet accessories seller, regularly see an ROI of 200+ percent.
How NP Digital Built a Client’s Amazon Campaign
It’s easy enough to set up Amazon advertising campaigns. It’s harder to set up effective campaigns, but not impossible.
How do I know?
The team at NP Digital, my digital marketing agency, did just that for one of our clients in the catering and party supplies industry.
The client already had ad campaigns (largely Sponsored Product and Sponsored Brand) set up on Amazon, but there were a few challenges they faced:
- The vertical is competitive and dominated by big-box brands.
- They were struggling to maintain a consistent return on advertising spend (ROAS) across their product categories (e.g., plates, cups, flatware, etc.).
- The vertical is highly seasonal, and its sales are largely attributable to specific events like weddings, graduations, and major holidays.
The client also had a limited budget, so throwing more money at the ads (aside from being unlikely to produce better results) was not an option.
The client’s Amazon Ads account had mature (i.e., long-term, decently performing) campaigns. Instead of recreating the wheel, the NP Digital team decided to utilize Pacvue’s marketplace advertising software to find opportunities and implement small changes. These changes would have been difficult to implement without such software as it utilizes API calls.
Remember, we don’t want to make major changes. So, we implemented a “do no harm strategy” that improved the established campaigns that the client had set up. These improvements included:
- Pausing broad match keywords that were accounting for 57% of spend.
- Labelling ASINS and campaigns by their role in the consumer journey and their type of product.
- Creating different ROAS goals based on the type of product.
- Isolating and increasing Sponsored Product presence in search results for top keywords.
- Adjusting placements on where ads show (top of search, etc.)
- Tracking our share of voice (SOV) so we could see if we were appearing for core converting terms.
While these quick wins would prove beneficial to the client, they weren’t enough for sustained success. We took it one step further and implemented a campaign restructure with a phased roll out plan. What did this look like?
- For sponsored brand ads, we implemented ad groups. This enabled us to concentrate our budget investments and, therefore, last longer throughout the day.
- In addition to established sponsored brand ads, we created a store spotlight ad. This enabled us to utilize the client’s brand power to draw customers into our brand-focused marketplace and away from the competitors.
- For sponsored display ads, we implemented targeting. This enabled us to combat competitive takeover on key search terms, and target customers based on lifestyle and interests.
- For all ads, we created new targets (including budget, audience, keyword terms, etc) based on SOV and ROAS.
Through a combination of implementing known best practices on established campaigns, as well as rolling out campaign restructuring in a phased approach, NP Digital was able to help our client achieve their Amazon advertising goals.
We achieved a 32 percent scale spend while simultaneously improving ROAS by 5 percent. That’s not all, though! Conversion rates increased by 22 percent, and month-over-month sales increased by 23 percent.
Beyond the immediate return, NP Digital was also able to achieve long-term success and improve assortment stability. How? When NP Digital started working with the client, just 89 products drove 100 percent of their product sales. In 3 months’ time, the number of products being sold jumped 65 percent, from 89 to 147.
What Does This Data Teach Us?
Overall, the above results show that slow and measured changes can have a positive impact on your Amazon advertising campaigns.
You don’t need to pump more and more money into campaigns that aren’t producing the results you want. In fact, you shouldn’t because money is often not the issue.
Instead, you should:
- Assess the performance of your current campaigns.
- Implement easy wins for short-term gains.
- Consider restructuring your current approach for long-term success.
You can even work with a digital marketing agency, like NP Digital, to make the job even more seamless.
Amazon Advertising Costs
Ready to start using Amazon advertising?
First, you need to set your budget. What should you expect to spend?
This is a tricky question to answer because it varies greatly depending on your industry.
The average Amazon ads CPC is $0.97 per click, however, this is very much a guideline and fluctuations occur:
A CPC algorithm sells each impression to the highest bidder (other factors do enter into the equation, but the value of the bid plays a big part), so the more competition there is, the more you’re likely to pay.
However, the element that will ultimately decide your Amazon advertising costs is your conversion rate.
If you’re spending $1 for every click and converting 1 percent of those clicks, then you spend $100 to sell one product. On the other hand, you might pay $2 per click, but if your conversion rate is 5 percent, then $100 of ad spend is going to get you five sales.
The trick is to find keywords where buyer intent is highest. These might be more competitive, but, if they result in much higher conversion rates, then it’s going to offer you a better return in the long run.
Amazon Advertising Strategies: 9 Tips to Drive Sales
Let’s look at some of the Amazon advertising strategies you should follow to help you drive more sales.
1. Outline Your Goals
One of the first steps in any form of marketing is to clearly outline your goals.
What do you want to achieve with your Amazon advertising?
This isn’t just how many sales you want to make, or what ROAS you’d like to achieve. It starts with questions like:
- Do you want to drive brand awareness?
- Do you want to increase traffic for your product?
- Do you want to have better conversions and increase sales?
Many people will focus on sales with Amazon, but its advertising options are much more diverse than this.
Remember, people who write down their goals are around 50 percent more likely to achieve them, so this is an important step.
2. Choose the Right Amazon Advertising Campaign
One of the first things you will have to decide with your Amazon advertising is which campaign type you want to run.
When you go into your Amazon Ads Manager, you’ll be presented with different campaign types:
- Sponsored Products: Feature your products at the top of search results.
- Sponsored Brands: Feature your brand in shopping results.
- Sponsored Display Ads: Display ads across relevant Amazon pages.
- Stores: Feature your brand story and portfolio of products.
- Audio Ads: Play on the free tier of Amazon Music.
- Video Ads: Play on connected TVs and publisher channels and networks.
The format you choose will largely be dictated by your goals.
For example, if you’re looking to drive brand awareness, then you might choose a store, audio, or video ads campaign. However, if you’re looking to be more sales-focused, then sponsored products, brands, or display ads might be the best option.
One of the great things about Amazon advertising is that it makes it very easy to set up and run your campaign, no matter what format you choose.
3. Set a Budget
As with any investment, you should have a clear understanding of what you want to spend on your Amazon ads before you begin.
The last thing you want to do is go over budget and hurt your bottom line. Amazon advertising should be increasing your profit margin, not shrinking it.
The Amazon ad manager can make suggestions for you and tell you if it thinks you need to up your budget, but ultimately, this is something you have to decide.
Set a budget that you’re comfortable with and then give it time to see how it performs. Once you’ve got data to work with, then you can make a more informed decision about raising or lowering your budget.
Digital ad spend is projected to be worth over $740 billion in 2024, so it’s clearly an important marketing tool. For it to work for you, your Amazon advertising strategy has got to work within your monetary constraints.
4. Choose the Right Products to Promote
You want your Amazon advertising to have maximum impact, so you’ve got to choose the right products to promote.
Not only are there millions of products on Amazon and heaps of competition, but you may have products that sell cheaper than the cost you’d spend per click. Therefore, some products of yours will outperform others.
Start to figure out which ones are the best fit for your Amazon ads. Thankfully, the answers are going to be in your analytics. To find your top performing Amazon listings:
- First, go to your Amazon Seller Central dashboard.
- Second, identify how much traffic each of your products is already receiving.
- Assess which has the highest conversion rate.
- Look at the cost of the keywords you’d want to use.
- Work out your ideal profit margin.
This information is going to be crucial in helping to decide which products you should start promoting.
You want to choose ones with good conversion rates that aren’t oversaturated with traffic (and therefore costly), as this is where the greatest potential lies.
5. Choose the Right Visual Assets
One of the drawbacks of e-commerce is that shoppers can’t see the products in person before buying them.
You have to overcome this by giving them the next best thing—high-quality images.
If customers can inspect your products in a similar way to how they would in a real-life store, then it’s going to result in more sales.
360-degree rotating images are a great tool for this, and they’ve been shown to increase e-commerce conversion rates by up to 47 percent. Humans are visual creatures, and we need good images to understand the finer details of products.
6. Write Clear, Engaging Copy
You’ll often see two extremes when it comes to copy on Amazon product pages: those who neglect it and those who stuff keywords everywhere to try and gain an SEO benefit.
Your copy has a direct impact on your conversion rate though, so it’s an important part of your Amazon advertising strategy.
Yes, you want to include the right keywords, but you’ve also got to be concise and informative.
- Tell the story of your business.
- Show the benefits of your products (and not just the features).
- Build your brand identity.
This is also an area where you can constantly optimize.
7. Target the Right Audience
Identifying the right target audience is a vital part of Amazon advertising.
It’s tempting to try and sell your product to everyone. However, you’ve got to focus your resources to maximize your sales. No spraying and praying.
The only way to do this is if your Amazon ads are showing to the right people.
You might find a big new audience that almost seems like the right fit and get a ton of traffic to your page, but it’s not worth it. Clicks without sales eat into your budget, and that’s what happens if your targeting isn’t quite right.
So, how do you find the right audience for your paid campaigns?
- Understand your current customer base. Who are they and what commonalities do they share? For example, maybe the majority of your customers are in the 25-to-34 age range with specific interests.
- Understand why your customers buy from you. Is it to fill a need? Is it out of convenience? Is it an indulgence? By understanding why your customers buy, you can lean into that angle while picking your target market.
- Follow the data. You know who your current customer base is and why they purchase from you. While you can test the water by targeting an audience that’s not currently in your customer base, you should do so carefully. Instead, focus the majority of your effort (and money) on targeting your known audience
8. Add Negative Keywords
Talking of things that eat into your budget, here’s another: negative keywords.
Amazon’s algorithms are pretty smart. They’re able to understand how keywords are related and which ones might be applicable to your product. The thing is, they don’t get it right all the time.
You’ll find that if you use an automatic campaign, you’ll get some clicks for keywords that just aren’t relevant to your product. When you notice these, it’s important that you add them to your negative keywords list so you don’t show up for that query in the future.
For example, you might be advertising for keywords related to tennis, and Amazon decides that Pickleball and tennis are closely related. If you get clicks for Pickleball-related queries, then you’d want to add them to your negative keywords.
Otherwise, you could be losing money.
9. Test + Optimize Your Ads
Selling products online is all about optimization.
If you’re not learning from the data you collect, then it’s difficult to move forward. What data allows you to do is run split tests. This is where you change an element of your Amazon advertising strategy and see how it performs compared to the control version.
There are plenty of elements of paid campaigns to consider split testing, and many will depend on the type of campaign you’re running. A few examples include:
- Product title
- Headline or body copy
- Main image (e.g., on-white versus in-use)
- Call to action (CTA)
- Brand logo
Let’s take this Yeti ad as an example:
For this ad, you could A/B test the headline, body copy, product title, and product image.
You can go beyond the campaigns and A/B test your products, too. This will indirectly benefit your campaigns in the long run once you’ve implemented the most successful splits for each test.
By individually testing different elements of your Amazon ads and product pages, you can isolate which tactics work and which don’t.
Frequently Asked Questions About Amazon Advertising
Self-service Amazon ads put sellers in control of their campaigns, whereas managed Amazon ads are controlled for you. Typically, managed Amazon advertising requires a minimum budget of $50,000, but it’s a great option for individuals and businesses who don’t have the time to learn how to run Amazon ads.
There are six types of Amazon ads: sponsored products, sponsored brands, display ads, stores, audio ads, and video ads. Each has its own benefits, so it’s worth exploring them more to find out which ones best fit your brand.
With Amazon advertising, you can reach a huge audience with high purchase intent. Its tools also allow you to be extremely targeted with your ads, ensuring you reach the people who are most likely to benefit your brand.
When creating Amazon Advertising campaigns, consider what you would like to achieve (e.g., brand exposure, sales, etc.), how much you want to spend, who you want to target, and how you want to target them. Once your ad for Amazon has had time to perform, re-evaluate your goals so you can improve performance.
Advertising on Amazon has many benefits for e-commerce businesses. It enables your business to reach a broader audience, which will increase sales on Amazon but also increase brand visibility. This can only be beneficial for your business, whether on Amazon or off.
Conclusion: The Keys to Amazon Advertising Success
There are some great benefits to Amazon advertising, and, to make the most of your money, the key is choosing the best strategy and slowly fine-tuning your approach through trial and error.
Amazon offers some great tools to help you target the correct audience and manage your budget, however, you’ve got to go a step further than this.
Through A/B testing and incremental changes, you can perfect the art of Amazon advertising and make a big difference to your business.
Are you using Amazon ads? If not, when are you going to start?
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