Advertisements play an integral role in business marketing. They can drive new traffic to products and sites, while bolstering custom acquisition and, ultimately, business growth. At ElectrIQ Marketing we work with clients to build ad campaigns with foundations in data and experience. Our work with clients on Amazon Ads is no exception. To learn more, feel free to reach out or explore our in-depth analysis and explanation of the ads, along with ElectrIQ Marketing’s approach, below.
Understanding Amazon Ads
In 2019, Consumer Intelligence Research Partners released a report showing that 101 million Americans now have an Amazon Prime membership, representing 62% of all Amazon customers.
As result, as Amazon continues to grow and to build its dominance in the e-commerce, it is becoming more and more important for businesses to consider it as a viable location for the placement of their ads. In terms of data, Amazon is definitely one of the leaders, as they have a great understanding of what products consumers are buying. Amazon benefits from direct sales data, whereas Google’s and Facebook’s data mainly provides an understanding of what consumers are searching for and what they are interested in. In addition, Amazon advertisements benefit from a significantly higher conversion rate than Facebook or their Google Ads pay-per-click counterparts.
It is important to note that in order to utilize Amazon ads, you must be selling products within the Amazon marketplace. Amazon ads will never take customers off the Amazon site with the exception of one category designed for external links and which is not offered to all advertisers and sellers. For more information on how your business can begin selling products on Amazon, visit our page on Building an Amazon Web Store.
At ElectrIQ Marketing, we formulate ads derived from data analysis so that we can guarantee you’ll be achieving the product visibility you desire. This means studying your preferred customer base, assigning particular keywords that line-up with your target audience, and continually refining based on views and conversions to create the optimal ad.
One of the great aspects of Amazon ads is their easy to use interface. After your ads keywords have been in action for a period of time, you can start to assess them based on click-through-rates and conversions. By analyzing the data that Amazon provides you can flag particular keywords as negative so that they no longer appear for shoppers entering in related searches. In doing so, you can help avoid click-throughs and views that cost you money but don’t lead to the conversions your business wants.
Amazon offers advertisers a variety of different data metrics associated with their advertising. This includes ad impressions, your total ad spends, the number of units you’ve sold through your ads, your total resulting sales revenue, your advertising cost of sales (ACoS), and more.
All of this data allows us to continually refine the ads in your ad campaign. We can tell what’s working and what’s not, and then refine based on that.
For example, let’s say your ads are driving a lot of click throughs. But unfortunately, these click throughs are not resulting in a lot of conversions (purchases). There are a few things we could tweak in this instance. The ad is obviously drawing attention, so that is a plus. So what we really need to do is assess the landing page (the product page) and the keywords we are using. Are the key words relevant enough to the product itself? Are these key words driving the kind of traffic that would ultimately buy your product? Does the landing page provide enough details on the product? What are the images like? Are they really displaying the product in the best light possible?
As can be seen by the basic example above, there are many different factors and variables that fall into ad campaigns. Through data, along with constant refinement and tweaking, we can hone in on an advertisement that best captures all the different metrics we’re analyzing.
Amazon Utilizes a Pay-Per-Click (PPC) and Keyword Bidding Advertising Pricing Model
WHAT IS A PAY-PER-CLICK PRICING MODEL?
A pay-per-click (PPC) pricing model means that your account will be charged a set amount each time someone clicks on your ad. This is an alternative to the pricing method in which you are charged for every 1,000 impressions (CPM). In the case of Amazon, they no longer offer CPM ads, which is fine for the purpose of Amazon ads, which are more geared for conversions than raising brand awareness and relevance in the marketplace.
HOW DOES ADVERTISEMENT BIDDING WORK?
The way advertisement bidding works on Amazon, and in general, is advertisers offer a price they are willing to pay to display their ads in response to certain keywords being searched for. Once that keyword is searched for, the advertiser with the highest bid will be the one who has their ad displayed within the search results.
In order to optimize your business’ bid for various keywords, our advertisement specialists take into consideration a number of different factors. We can set a bid price that is affordable, productive, and profitable for your business with the following:
- What are other advertisers bidding for the same keywords?
- How much revenue does the ad bring in for each click that leads to a conversion? How much profit does it bring in?
- What is your overall conversion rate for the product?
- How many impressions are the keywords bringing in? What is your cost per a thousand impressions?
- What is your Target ACoS (Advertising Cost of Sale)?
These are just some of the factors that go into assessing what the proper bid for your business is. Additional analysis is also needed to assess who exactly your competition for the keywords is, and the size, scale, and quality of their business in comparison to yours.
Amazon Has a Variety of Ad Types
Amazon offers advertisers a number of ways to display their ads. While it is best to start off well-rounded, meaning utilizing the many different options, over time you can start to narrow in on what’s working best for your products. Again, it’s a process of continually refining and optimizing based on the relevant data so that your business can continually increase return on advertising spend (ROAS). Below, we’ve provided some brief details on the different types of ad placement and format Amazon offers.
SPONSORED BRAND CAMPAIGN ADS (FORMERLY KNOWN AS AMAZON HEADLINE SEARCH ADS)
One of Amazon’s most popular ad formats, these ads are featured above, alongside, and below Amazon search results. This is a great way to provide maximum exposure for your product and drive relevant traffic that is interested in what you are offering.
Keyword targeting in this format falls under three categories:
Branded Product Keywords – These keywords are directly derived and set by the product you are selling, along with the product brand. This means that if you are selling “designer leather shoes”, search queries relevant to those keywords may yield a search page with your advertisement at the top, the side, or the bottom of the results.
Complimentary Product Keywords – These are keywords that combine two products that are often sold together. The purchase of one product often drives the purchase of another, related product in this situation. An example would be searching for marshmallows and receiving an advertisement for graham crackers, which are often sold together to make s’mores.
Sponsored Product Automatic Targeting Keywords – These are keywords that have already yielded successful results in other targeted advertisement campaigns you’ve run on Amazon.
The price of these campaigns is assessed using the aforementioned pay-per-click (PPC) pricing model, along with the bidding system that we described in which advertisers bid, meaning offer a price, for their ad to be displayed over other ads.
Ad Design and Implementation
At ElectrIQ, we think it is important for designs for Amazon’s Sponsored Brand Campaign Ads to feature two to three different products that your business sells, along with a top headline that embodies the true essence of the product. This means it should affectively convey why the product would be useful to the customer.
Additionally, ads should have multiple links associated with them. They should link to the products certainly, but additionally, they should also link to your store’s home page. As for where these links send the customers, these pages, whether product pages or your home page, are referred to as landing pages. We’ll discuss how we can work to optimize landing pages to facilitate customer conversions later on.
An example of this can be seen in the image below. This advertisement for Di Oro Living cooking spatulas features three products and a fourth image on the far left. If a customer clicks on any of the spatula products, they will be directed to the product’s respective product page. If they select the image on the far left, which in this case is multiple cooking utensils but which is more often a company’s logo, they will be taken to the business’ store page on Amazon. All of the destinations of these links are considered landing pages, and this shows how Brand Campaign Ads typically route customers.
As a useful side note, Amazon warns advertisers to avoid stating unsupported claims in their ads, such as “best seller” or “#1” product. It is important to avoid making mistakes like these because it could lead to your ad being rejected by Amazon.
AMAZON PRODUCT DISPLAY ADS
Product Display Ads are another form of ad offered by Amazon. Like the Sponsored Brand Campaign Ads discussed above, they also follow a pay-per-click (PPC) and bidding pricing model. These ads appear in the bottom right corner of product listings, as can be seen in the red box in the image below.
These ads perform via targeting that focuses on customer interest and specific products. This means that the product in the lower right corner is relevant to the product being sold on the page and is often an alternative product. Other pairings are advertisements for a product that enhances and goes with the product being sold on the page.
This type of ad can be very beneficial for businesses looking draw customers from established brands and provide their product as a better alternative to the product on the page, whether that is through quality, price, or both.
This can be seen in the image below, where the product ad is displayed where the red box is. In this instance, a spatula is being sold and the product being advertised is a grill. These are definitely two products that go together, so it’s no wonder why this pairing has appeared.
Throughout the e-commerce world you will often hear talk about landing pages and how to optimize them to make the most lead to customer conversions. With Amazon ads, shoppers can be directed to multiple products from each advertisement. These product pages are, in this scenario, what we refer to as landing pages, and Amazon sellers can customize each one, with different descriptions, details, images, and more.
At ElectrIQ we view that landing page as an integral aspect of ads. The ad may be great. The ad may grab customers attentions and lead them to the landing page. But the landing page needs to make the conversion. So here again, at ElectrIQ we work to continually refine this aspect of the campaign. Remember, an ad campaign is only as good as its weakest component, so fine tuning all the aspects of ad outreach is a must.
AMAZON NATIVE ADS
Another advertisement option for Amazon ads are Amazon Native Ads. These are ads that appear as relevant products to the content a customer is viewing or is searching for on a website other than Amazon. In this scenario, Amazon pays you a commission for customers who use your link to visit the site and make a purchase. Amazon’s site splits them into three categories: Recommendation Ads, Search Ads, and Custom Ads.
As an important note, these ads are not intended to display your own products and instead are designed for bloggers and other websites that produce content articles to monetize their efforts. As such, we would not typically recommend these for businesses focused on selling a product, however, if you run a blog or some form on informational website, we would be happy to guide you in the process of implementing these ads and gearing them properly for the content on your site.
These are ads that can be placed at the bottom of content or articles on your website. Amazon scans the page and displays content that is relevant to either the page content of the viewer. If a conversion is made, meaning someone uses the links to go to Amazon and make a purchase, you’ll receive a commission.
Search Ads give you more control over what exactly is being displayed on your site. You choose a search term or query for the advertisement and in turn products relevant to that query show up on your site. Again, if someone goes to Amazon via these ads and makes a purchase, you’ll receive a commission.
Custom Ads give you the most control over what is being displayed via the advertisement on your site. In this scenario, you are able to choose the exact products that will be advertised. This is most beneficial for sites recommending to readers a specific product or set of products. For example, if your blog is talking about a new mixer that is great for making cakes and other sweets you may want to put up an Amazon advertisement for that exact product. If someone is convinced by your article and buys the product through your advertisement link, you’ll receive a commission.
AMAZON VIDEO ADS
The last Amazon Ad choice is a video ad option. These ads are unique in that they can link to any website or page on the internet. At ElectrIQ Marketing, we typically advise our clients to avoid these ads because they are not designed for small businesses. To be eligible, businesses must commit to $35,000 in spending on the ad, which means that this option is far out of reach for most small businesses.
Amazon Ads Overview
Amazon Ads can be a great opportunity for small businesses looking to expand their client base and move into selling products through other routes other than just their website.
As a quick recap, there are three relevant types of Amazon Ads which small businesses can take advantage of, with the most important being the first two:
- Sponsored Brand Campaign Ads
- Amazon Product Display Ads
- Amazon Native Ads
- Amazon Video Ads (as mentioned above these are typically not relevant to small businesses)
At ElectrIQ Marketing, we place an emphasis on our custom-tailored approach which keys in on the foundational goals of your business and the unique attributes of your products. We mention this because our process allows us to move beyond the typical cookie-cutter advertisement approach that comes with most marketing consultants and instead allows us to formulate a campaign that is tailored to your business specifically.
If you are interested in starting to work with Amazon Ads, build an Amazon store for selling products, or just have some questions about the information presented above, please don’t hesitate to reach out.