When it comes to online shopping, there is an undisputed leader.
With a 37.8% share of the e-commerce market, Amazon is by far the largest online retailer in the US, and is poised to overtake Walmart as the number one retailer overall by 2024.
With so many people buying everyday products on Amazon, setting aside a portion of your advertising budget to leverage the site’s business traffic is a smart business strategy.
What you sell is not very important. People buy everything from Legos and binoculars to jewelry, clothing, and kitchen appliances on Amazon.
Instead, focus on how to sell your products and you will end the fourth quarter on a high note.
You shouldn’t put all your eggs in one basket. But if you must, sponsored product campaigns are the way to go.
Sponsored products are cost-per-click ads that appear on the Amazon results page when a customer searches for something.
If you sell cheese graters and want your brand to appear at or near the top of the page whenever a consumer searches generically for “cheese graters,” sponsored ads can give you that prime real estate. They are still the bread and butter of Amazon’s most successful ad campaigns.
Sponsored Product campaigns are easy to create and allow you to control your costs by setting a price on how much you will spend per click. They work well with:
Sponsored brands that focus on your overall business rather than a single product. Sponsored Display Campaigns: Interactive ads that can reach shoppers not only on Amazon, but also elsewhere.
Data offers a greater benefit than blind luck
When creating a sponsored products campaign, don’t just rely on luck. Sales and performance metrics tell the real story.
Being comfortable with data will help you understand your advertising cost of sale (ACoS), an important tool in formulating a successful advertising strategy.
To calculate your Amazon ACoS, divide your ad spend by your total revenue earned.
If you spend $20 on advertising and sell $100 worth of products, your ACoS is 20%. Breaking it down even further, this means you spend $0.20 for every $1.00 you earn.
Obviously, the lower your ACoS, the higher your profit.
While ACoS is an important metric, it’s not the end-all, be-all.
You should consider other factors such as impressions, click-through rates (CTRs), and conversions to determine your target ACoS.
Ideally, you’ll want to find your break-even point so you know how much to spend on spending without breaking the bank.
Keep in mind that advertising affects your product’s organic ranking. That’s because, like you, Amazon wants to sell products!
If your product converts well and has a high sales velocity because you sell a lot through advertising, Amazon will want to show your product beyond what you pay for advertising.
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Don’t miss opportunities
If you haven’t touched your ad campaigns in a while, you need to optimize them. This means taking steps to improve the performance of your campaigns.
We’ve found that many people only optimize if they think there’s a problem, but that means you could be missing out on even better results and opportunities.
Optimizing your ad campaigns ensures you’re targeting the right audience and using the right platforms and tools. It allows you to create personalized content and can go a long way in reducing customer acquisition costs.
There are several things you should look for when optimizing your ad campaigns.
Underperforming SKU
In most cases, underperforming SKUs should be paused. But the work doesn’t end there. Investigate the reasons Because they performed lower when asking themselves the following questions:
Which SKUs are performing better and why? Is it the budget? Campaign keywords not that relevant? Is this SKU not as good compared to the products it competes with? Product details page not optimized enough?
Offers
Since keyword bidding is an auction-based format, you’re never operating in a silo.
Increasing and decreasing keyword bids will have a huge impact on ACoS and overall results. The following tips may help:
Look for keywords that aren’t relevant or aren’t converting. Review the guidance. Are you using phrase/exact match for high converting gems? Don’t forget about auto-targeting types. Loose match, close match and product targeting are areas of opportunity. Make sure your inventory levels are high and you keep the buy box. Use negative keywords to your advantage. This is great for all campaigns, but especially effective in large, automated acquisition campaigns.
Use coupons and promotions
Everyone loves a deal, especially in this economy and this time of year.
Even if you don’t participate in Cyber Monday, you can still offer coupons and promotions to help increase conversion rates and sales.
When used with sponsored product ads, this is a great way to get more sales.
Study the search query performance dashboard
If you are a registered brand seller, this report provides you with valuable information on:
Your customer’s purchase journey compared to your competitors. The volume and ranking of each search term.
You’ll also learn how potential buyers discover your products, both organically and through paid ads.
This will alert you to potential problems with the optimization of your product detail page. For example, a low click-through rate could mean that your title or image isn’t resonating with searchers.
Manage your budgets properly
Web traffic will increase in the coming months and advertisers will increase their budgets. The downside?
You risk using your budget much faster than usual. This is true even on regular days, not just special events like Cyber Monday and Black Friday.
If your budget doesn’t allow for ads to run all day, make sure you’re using the daily split.
This strategy involves scheduling your ads for certain days of the week and certain times of the day when you get the most conversions.
Now that you’ve learned how to optimize your ads for Amazon, it’s time to make big impressions!
The opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.
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About the author
Evan Facinger is a digital marketer with 15 years of experience and is the Director of Sales and Marketing at The most important media, a full-service digital marketing and web development agency. Evan has a solid background that includes; Amazon Optimization, Search Engine Optimization (SEO), Conversion Rate Optimization (CRO), Marketing Automation and Pay Per Click Management. He has helped hundreds of clients achieve their business goals through digital marketing.
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