‘‘Unprecedented’ – this is one word that aptly describes the current scenario that global industries have witnessed owing to the COVID-19 pandemic. This has brought in a substantial amount of change in the functioning of the world around us, both online and offline. Let’s focus more on the online ecosystem, which is predicted to be an underhanded benefactor, especially in terms of creating a solid Amazon advertising strategy.
While massive budget cuts in ad spend and marketing budgets had to be digested by many firms, the same does not hold for the e-commerce giant, Amazon. It is estimated that Amazon would see approximately $13 Billion in revenue from amazon advertising in 2020 alone from the US when the new normal dawns upon us the post-pandemic world. This statistic denotes 23.5% growth compared to last year. As the demand for e-commerce skyrockets, this situation is bound to become a reality in every country.
If you are aiming to increase your sales on Amazon, ‘Amazon Advertising Strategy’ should hold a place of prime importance in your growth plan. In this blog, I will shed light on all the parameters, ranging from basic to advance that can help you build an Amazon advertising strategy to optimize results from your ad spends.
If you happen to be a novice, it is recommended that you focus on the basics as you continue to gradually increase your spendings and experimentations.
Before we begin, it is important that you set a goal for every product or category that you will be advertising. Depending on the goal, you can use different combinations of ads and choose the type of aggressiveness of bidding.
According to my personal learning, the goal for a product or category can be broadly divided into three focus areas:
- Aggressively Boost Sales
- Brand Awareness
- Targeting Competitors
1. Aggressively Boost Sales:
Boosting sales is an ultimate target regardless of what your ad strategy depends on. You surely would agree. But here’s a scenario for you:
Your customers are loving one of your products/categories. In spite of this, you are unable to gain many reviews and sales on it.
In such a case, firstly, I’d recommend you to follow these points and then proceed with the ads. Additionally, ensure that you have enough margin on the product so that you can spend on advertising.
Here are the type of ads that you should run:
1.1 Sponsored Products:
These ads are most popularly used on Amazon as they directly tap into customer behavior. The reason being that they are displayed on the basis of what customer searches. Targeting of these ads has been divided into two categories:
- Automatic Targeting,
- Manual Targeting
Let’s see how a Sponsored Product Ads looks on Amazon and then dive into the difference between automatic and manual targeting:
You can use a combination of Automatic and Manual campaigns to showcase your products on the basis of various customer search terms. You can start with automatic targeting if you are not sure about the right keywords. Once the automatic ad set has matured, you will be able to receive the search terms upon which your ACoS is good. You can add these search terms to your manual campaign’s ‘phrase and exact matches’ to make sure your ad is displayed with high converting search terms.
Pro Tip 1:
For automatic targeting campaigns, make sure your bidding is done correctly. Automatic targeting entails four types of bidding – Close Match, Loose Match, Complements, and Substitutes. You can access these options in Ad Set’s targeting.
1.2 Sponsored Brands:
Sponsored Brands, previously known as Headline Ads are available for sellers, who have a trademark for their brand or have registered their brand on Amazon Brand Registry. The sponsored Brand ad is a smart approach to highlight your brand and showcase three of your products simultaneously.
Here’s what a sponsored brand ad looks like:
On the left-hand side, you can display your brand logo or your best selling product in a creative way and direct the user to your brand store to showcase your entire catalog. On the right side of it, you can showcase three of your best selling products.
These ads can be displayed basis two targeting strategies:
- Keyword Targeting
- Product or Category Targeting
Since our focus is on increasing sales aggressively, instead of brand awareness, your strategy here should be to display Sponsored Brand ads using keyword targeting to bid on keywords that are already profitable in your Sponsored Products campaigns.
To aggressively boost sales, you can use a combination of Sponsored Products and Sponsored Brands by bidding astutely on high-converting keywords and optimize your investment.
Pro Tip 2:
Always keep an eye on the bidding amount of your high-performing keywords. Since this is a competitive scenario, someone else would also be bidding on those keywords and you must ensure that you have the correct bid.
Pro tip 3:
Whenever there’s a sale on Amazon, increase the bids on high-converting keywords. On such days, when the platform traffic is high, your ads will have higher conversion rates.
2. Brand Awareness
When it comes to Brand Awareness, ACoS is not as important as a factor. When evaluating the impact of the ads, impressions and engagement are of prime importance. So even the type of ads you run would be quite different than what you would do to increase sales.
I’d suggest two ad categories for Brand awareness:
2.1 Sponsored Brands with Category Targeting:
For this goal, instead of using keyword targeting, use category targeting where you can select the category in which you want to create brand awareness. Once done, you can continue to bid for multiple categories as well. This will display your ads when a user is browsing that category or when a user searches a query that is related to that category.
2.2 Sponsored Display with Audience Targeting:
Sponsored Display ads as the name suggest are displayed in banner style. This is an excellent way to attract the attention of your target audience on Amazon and third-party websites. Here’s an example:
To target your relevant audience, you can choose ‘targeting via interest targeting’ where you have to select the target category (eg. books). In this type of ad, only one product can be selected for which your ads would run. Your brand logo and headline are two parameters you can add with this type of ad.
Combining Sponsored Brand and Sponsored Display with category targeting will help you increase your brand awareness and enable you to reap benefits in the long run.
3. Targeting Competitors:
You should choose this as a goal when you have a better product than a competitor who is selling well on Amazon. You can directly target and hijack your competitor’s audience using all of the above-mentioned ads. Before you start, research your competitors’ brand search terms which their customers must be using (for example – Samsung smartphone).
Let’s see how you can do that with each type of ad:
3.1 Sponsored Products:
Select Manual targeting and enter the researched competitors’ search terms in phrase and exact type. This will ensure whenever a user is searching for competitors’ brand products, your ad will be displayed and therefore offer them an alternative.
3.2 Sponsored Brands:
You can run both Keyword and Product targeting ads for this goal. For keyword targeting, choose your competitors’ brand keywords and for product targeting, enter the competitor ASINs.
3.3 Sponsored Display:
Select product targeting and enter the competitors’ ASIN to display your ad on their product pages.
This is a good way to attract eyeballs on your products and give customers an alternative from the brands they might be associated with.
Negative Targeting is one of the most important factors to be considered in the Amazon advertising strategy when you run a campaign that displays ads based on customer search queries. You can lose a lot of investment if you ignore this and the ACoS or your KPIs will be gravely affected if you do not have the correct negative keywords.
For instance, let’s assume that you’re selling colouring books for kids and if your keyword is “colouring book” in phrase match. Your ad will also be displayed on the search term “colouring books for adults” which ideally you don’t want. Here’s where negative keywords come into the picture. All you need to do is put “adults” in a negative keyword and whenever a customer searches anything that has the word “adults”, your ad will not be displayed.
You will have to optimize your campaigns on a regular basis and one of the important points in that would be analyzing customer search terms and adding negative keywords from that.
Advertise Outside Amazon:
Your Amazon advertising strategy should also involve advertising outside Amazon. The platforms here could be Facebook, Google Ads, etc. depending on your target audience. I regularly run Facebook, Instagram, and Google Shopping Ads.
My Facebook and Instagram Ads have a Call To Action (CTA) to the brand store where I track conversion using the source tag. Source tag is a new feature introduced in Amazon Brand store which I have come to find as extremely helpful.
I also run Google Shopping Ads where I direct prospective customers to my website’s product page and offer them an option to buy on my website and also display affiliate links to other e-commerce websites I sell on (Amazon, Flipkart, Snapdeal, FirstCry).
You can also try influencer marketing. My personal experience states that in some campaigns, influencer marketing has proven to outbid every other campaign that I have run in terms of ROI (Return on Investment).
Q1. What should be my target ACoS?
A. The recommended target ACoS should max be 15% to 20%. However, if you have launched a new product or want to promote aggressively to get a Best Seller or Amazon’s Choice tag, you can have a flexible ACoS depending on the margin you have.
Q2. What should be my advertising budget?
A. I recommend having between 5-10% of the total sales on Amazon. So if you’re having a monthly sale of $10,000 (7,50,000 INR), you should roughly spend between $500 (3,750 INR) to $1000 (7,500 INR) monthly. Again it can be flexible depending upon your goal.
Q3. When can I stop advertising a product?
A. Some people never advertise, others advertise until they reach their daily sales target, a few do so until they get the Best Seller or Amazon’s Choice tag and some never stop advertising. If you ask me, you should continue to advertise at least until your product gets a Best Seller or Amazon’s Choice tag or never stop at all if the advertisements are well under your target ACoS.
Q4. What tools should I use for keyword research?
A. I personally don’t depend on any one particular source. I use search terms from Sponsored Products Automatic targeting campaigns. I also use KeywordTool which is a paid tool and is quite helpful. Lastly, I analyze the Brand Analytics report in Amazon’s Seller Central on which I can enter a competitor’s ASIN and get the keywords it is ranking for.
All of these strategies can be tweaked, managed, and scaled according to your goals for every product or category. With your end goal in-sight, you can successfully create an Amazon advertising strategy by making optimal use of your advertising budget.
Hope this article was an enlightening guide for you. Feel free to add your perspective or provide any feedback in the comments section.