The Keys to Success With Amazon Advertising
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. Let’s take a look at how best to use them.
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.
Over 2.5 million products are sold on Amazon only in the U.S., so it’s easy to get lost in a sea of product results pages. By mastering the Amazon ads manager, you ensure this won’t happen to your business.
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.
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 regulation.
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.
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.
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 in the U.S. is $1.20 per click, however, this is very much a guideline. 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.
A bar graph showing the average CPC of Amazon advertising over an 18 month period.
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 take a 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 (as Lenovo did)?
- 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.
Choose the best type of Amazon ad based on your goals.
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 they make 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.
Amazon certainly isn’t the only ad platform you should consider (Google and the social media networks are also very valuable), so you’ve got to find the balance that works for you.
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 worth over $560 billion, so it’s clearly an important marketing tool. In order for it to work for you, your Amazon advertising strategy has got to work within your monetary constraints.
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.
If you’re going to invest money in advertising, then your product pages have to be fully optimized, and you need to learn from your analytics.
Through A/B testing and incremental changes, you can perfect the art of Amazon advertising and make a big difference to your business.
