Amazon Advertising: The Fastest Growing Online Marketplace
Amazon Advertising is the fastest growing business area in the online marketplace. In Germany alone, sales in 2020 were $ 21.84 billion , an increase of 51.6% compared to the previous year. Although the pandemic and e-commerce boom had a hand in Amazon’s success, it also showed the increased importance of advertising and Amazon PPC tools in the Amazon universe.
But why is Amazon Advertising so important for retailers and vendors? And how can this help your brand’s overall growth?
The answer is simple: Large platforms (like Google and Facebook) want to monetize their monumental reach – so if you want to have guaranteed visibility, ad spend in those platforms is going to happen sooner or later.
After all, Amazon wants a piece of the “advertising budget pie” and offers a handful of compelling arguments for brands and advertisers. According to a survey by CivivScience, 47% of US users used Amazon to search for products during the pandemic. Meanwhile, Google came in second with 24%. In the case of Prime members, the percentage of those who searched on Amazon rose even higher to 74%! Obviously, Amazon is where the customers and the views are – so it only makes sense to put your ad dollars there as well.
The Basics: Advertising Options for Sellers & Vendors
As a seller on Amazon, you naturally try to position your products in the best way possible and apply best practices in order to be discovered in the right search queries (and to rank as high as possible.) Factors such as the BuyBox or the number (and quality) of the reviews, naturally play an important role as well.
Amazon Advertising behaves much like Google Ads. On Google, if you search for the term “vacuum cleaner”, an algorithm will show you the right websites in a list of results. Amazon is faced with a similar challenge: What to display in response to Amazon search queries?
As a seller on Google and Amazon, the same principle applies. You want to direct as much traffic as possible to your products or your shop. You can promote these products and shops with organic reach strategies – or with advertising.
Amazon Advertising is therefore Amazon’s answer to Google Ads: As an advertiser, you can easily buy visibility and therefore traffic. But how? Amazon PPC tools can help you implementation campaigns, target audiences, and get your products in front of the right people at the right time.
Sponsored Products are cost-per-click ad type that allows you to advertise individual product listings on Amazon. The advertisements appear in the shopping results and product pages, and help customers to discover your products and ultimately to buy them.
The main advantages of sponsored products include:
Increased brand and product visibility
Increased Amazon sales
Controlled advertising costs
Measurable advertising success
Like Sponsored Products, Sponsored Brands are a cost-per-click ad type. However, the ads are supplemented with a brand logo, an individual headline, and several products. In this way, potential customers can discover your brand while searching Amazon. This can have a obvious positive effect on brand awareness and ultimately lead to increased product sales.
Sponsored Display is a self-service display advertising solution from Amazon that enables you to directly reach buyers during any stage of their customer journey, both inside and outside of Amazon marketplace. The ads then appear, for example, on the Amazon homepage, on product detail pages, purchase results pages, as well as on other websites and third-party apps.
Dangers & Opportunity: Long-term Brand Growth with Amazon Advertising!
The formula for growth with Amazon is simple: click rate , conversion rate , positive reviews, and fast shipping. This recipe has the potential to result in the elusive “Best Seller” badge and ultimately increased sales. Advertisers should keep track of Amazon’s most important metric – product clicks (which can result in high purchase rates.)
As an Amazon advertiser, you can supercharge this formula through ad spend that garners additional, non-organic clicks through to your product.
Bestsellers in a certain category are clearly marked in the search results and usually have the highest click-through rate .
The Parent ASIN
Levi’s takes an interesting approach to promoting women’s shirts:
Although the shirts listed here differ in color, fit and print, all variants contain a so-called parent ASIN. Every time one of the many T-shirts is ordered, the common parent ASIN climbs up in the ranking. As you can see on the screenshot, the user-friendliness suffers from this trick, but it succeeds in gaming the algorithm and helps the product to rank higher in search queries.
Also on the ranking list: Urban Classics. In order to occupy fourth place, the label pursues the advertising approach alongside Amazon SEO in order to generate clicks and purchases.
The brand appears as a “sponsored brand” in the search results. In addition to products marked as “sponsored”, Urban Classics will also present sponsored video ads.
Automation and Amazon Advertising
Automated campaigns are highly influential at Amazon in particular, which is why there are a lot of smart Amazon PPC tools to optimize your campaigns.
While Google is largely played out as an ad platform, and growth levers are therefore mostly outside the platform in feeds or on websites, Amazon Ads is still an advertising gold mine! There is far less competition, and there are even sometimes free or at cheap ad placements. Those who want to efficiently bundle their resources for Amazon Ads (and rely on automation) will gain significant competitive advantage. A case study published on Amazon.de shows what this looks like in practice.
How Does Automation Contribute to Growth on Amazon?
Automation can help you grow with the following ways:
Offer you reliable control of the target ACoS of each campaign
Bid adjustments can be made automatically depending on the goal
They allow you to manage bidding of large product portfolios (50+ products)
Keyword expansion is available with automation
You can automatically perform various targetings such as keywords, products, categories, and competitor ASINs
Strategy & Technology – Two Factors of Success for Your Amazon Advertising Business
If you want to stay competitive on Amazon in 2021, you can’t do it without Amazon Advertising! After all, the development of Google in recent years shows that without advertising it will become more and more difficult for brands to gain visibility and market share. You can still succeed with niche products for a short time, but as soon as the competition grows and thus the place in the search results becomes more and more competitive, you should consider ad placement in order to reach your full sales potential.
Without Amazon Ads, you could be giving sales away. Automations help control your advertising activities as efficiently as possible and effeciently optimize them.
Unfortunately, it is not enough to just press a button and wait for a miracle. As always, if you want to be successful, you should have a plan. That means doing precise analyzes, defining your goals, choosing ad formats, and finally planning and launching campaigns. Only then can you successfully bring automation into play that will help you fine-tune your campaigns and see the results you’re looking for.
You can also work with eCommerce experts that have experience navigating Amazon Advertising and come armed with best practices and proven strategies. Finch is of the opinion: The automation of Amazon Ads without a strategy makes just as little sense as a strategy without automation in 2021. Want to do more with Amazon Ads and automation? We’ve got you covered.