Amazon is the king of disruption. It is a true pioneer in ecommerce. It has changed the way we shop and opened doors for millions of entrepreneurs.
The eCommerce giant has not only built a retail empire. It has also has a fast-growing advertising business that can soon surpass Google and Facebook.
Amazon has successfully transformed itself from an online mall to an Amazing marketing platform. Its advertising arm earned a total of $10.1 billion in 2018. In a few years, its advertising business can surpass its top revenue-generating venture – Amazon Media Services (also known as AWS).
Amazon is the place where online shoppers buy things. People who are on Amazon are often ready to buy, so clearly, Amazon ads have a clearer ROI (return on investment) and ROAS (return on ad spend) than Facebook or Google ads. 50% of product searches now start on Amazon. That’s twice as much as Google’s number. This means that people look for products on Amazon and not on Google.
Amazon created its own advertising platform called AMS or Amazon Marketing Services so sellers can market to shoppers who are actively looking and ready to buy products that are similar to theirs. Remember that most people log in to Amazon to actually buy products and not window shop. Also, 49% of online purchases are made through Amazon. That’s quite impressive, right?
What Can Amazon Marketing Service Do for Your Business?
AMS (now rebranded as Amazon Advertising) is a self-service pay per click advertising platform that allows sellers to actively promote their products directly to customers with an open wallet. It allows you to bid on keywords that customers use to find products on the Amazon search bar. It works a lot like Google ads.
If you type the keyword “coffee maker” on the Amazon search bar, you’ll most likely see an ad from Keurig. This is because the company placed the highest bid on that keyword and won the rights to place an ad at an excellent location.
There are many reasons why you should use AMS for your online advertising campaign:
It has higher conversion rates than Google and Facebook ads. AMS advertisements are highly visible and allow you to target specific keywords or interests.
You only have to pay for clicks.
It gives you access to real time data. This allows you to assess the success of your advertising campaign.
It’s affordable. You can run ads for as low as one dollar per day.
Lastly, it’s easy to manage. You don’t have to be a marketing guru to run your ad.
Types of AMS Ads
Amazon ads are affordable and they have higher conversion rates than Google, Facebook, and even YouTube ads. But not all ads are the same. There are three types of Amazon Advertising Console (AAC) ads – sponsored brands, sponsored products, and product display ads. To maximize the return of your ad spending, you have to choose the right one for you.
Product Display Ads
If you’re selling anti-aging moisturizers, you can place your ad on your competitor’s product description page. You can also display your ad on the page of a product that complements yours like liquid foundation or facial cleanser.
Product display ad helps you steal some of your competitor’s market shares. It is also great for upselling and cross-selling your products.
Step 1 – Log in to your AMS or AAC account.
Step 2 – Select a targeting method. Go to “choose a campaign type” and then click on “product display”.
You have to options, namely
Step 3 – Choose a product to advertise. You can type your product name in the search box or you can enter its ASIN (Amazon Standard Identification Number).
Step 4 – Choose the settings for your campaign. Create a campaign name. Enter your bid (the amount you wish to spend for every click) and your daily budget.
Step 5 - Create your ad. You need to create the headline and product description. You also need to upload your logo. To maximize the success of your ad, place keywords in your product headlines. It’s also helpful to create a well-written and engaging product description. Once you’re done, preview your ad. If everything looks good, click on “submit campaign”.
This ad type is formerly known as a headline search ad. Sponsored brand ads appear at the top of the search results. Sponsored brands increase your product discoverability on Amazon and drives traffic to your product page.
It also comes with highly customizable content and allows you to advertise multiple products in one header ad. This is why it is expensive. The minimum daily campaign budget for this ad type is $100.
Sponsored brands have an auction-based pricing model. You have to bid on keywords that you want to target. This means that you have to compete with other advertisers to get an ad slot. Place higher bids on high-traffic keywords.
This ad type is a lot similar to sponsored brands because it also appears on the Search Engine Results Page (SERP), only that it usually appears under the sponsored brands or at the left side of the screen. The minimum daily budget is set at $1. Sponsored Products can increase impressions and can help widen your reach.
Best AMS Campaign Practices That Can Give You the Best Results
1. Target the right keywords
As you may already know, keywords are the search terms that online shoppers use to find a product. For example, if you’re looking for diabetic shoes, you have to type in keywords like “diabetic shoes”, “ortho shoes”, or “footwear for diabetics”.
Targeting the right keywords increases the overall performance of your PPC ads. This could increase your product page traffic and boost your sales and revenues.
Doing extensive keyword research allows you to determine which search terms drive traffic and sales. But how do you do that? Well, here are a few keyword research tips:
Take time to know your customer demographics. This way, you’ll know what your customers are going to type in the search bar. Let’s say that you are selling essential oils and you found out that your customers are mostly moms within the age of 29 to 45. This means that it’s probably wise to target keywords like “essential oils for kids” or “essential oil for cough and fever”. Remember that SEO (Search Engine Optimization) is not a one-size-fits-all strategy. You have to be detailed.
Use keyword research tools. There are many paid Amazon keyword research tools, such as AMZTracker and Sonar. But, you can also use free tools like Soovle and Keywords Everywhere.
Check out your biggest competitors to see what they’re doing right.
Use helpful keywords. Remember that Amazon users are more specific than Google searchers. Let’s say that you’re selling compact umbrellas. If you’re doing SEO for Google ads, keywords like “buy umbrella” and “best umbrella” are great. But, if you’re doing SEO work for your Amazon ads, it’s better to use detailed, helpful terms such as “water resistant” or “travel size”.
2. Create a budget.
It’s important to set small budgets when you’re just starting your campaign. This allows you to test the waters and see what works. Once your first campaign is done, study the results thoroughly and determine:
The products, models, or colors are performing best
The ad type that has the highest return
The keywords that are driving the most traffic to your product pages
The ad copy with the highest click through rate
After you set the budget for your next campaign, divide it among different ad types. You can place 50 percent of your budget on sponsored products, 10 percent on product display ads, and 40 percent on sponsored brands. This is a good ad budget distribution plan, but you don’t have to follow it. Do what works for you.
3. Focus on building your brand.
Having a strong brand can do wonders for your business. This is the reason why Starbucks is the leading coffee shop chain in the world. Branding gives you a competitive edge and keeps you one step ahead of your competitors. It increases your credibility and makes shoppers more receptive to your ads.
To increase your brand equity and improve the performance and the conversion rate of your product, use these branding tips:
Use Amazon Brand Store and Enhanced Brand Content (EBC). These tools allow you to create content-rich product pages that feature videos and enhanced images. But, keep in mind that these tools are exclusively available to registered brands.
Utilize high quality images. Hire a photographer to do your product shoots.
Use video ads to tell your product’s story.
4. Review your campaign results.
5. Play smart, bid smart.
General keywords like “soap” or “laptop” have huge search volume. But, they’re also competitive and have a low conversion rate. To increase the conversion rate of your ads, bid on more specific keywords like “16 inch laptop” or “papaya whitening soap”.
Also, increase your advertising bids on promotion days like Black Friday and Cyber Monday.
6. Use negative keywords.
Negative keywords are the search terms that you want to completely exclude from your advertising campaign.
Using negative keywords helps you refine your target audience. This saves you a lot of money. Let’s say that you sell Android smart phones on Amazon. You’re aware that iPhone users are pretty loyal to Apple, so marketing your product to them is a waste of money. What you can do is you can place the search terms “iPhone” or “iPhone x” under “negative words”.
7. Focus on the most important metric – ACoS.
Monitoring too many advertising metrics can get confusing. You only need to pay attention to one metric – ACoS or advertising cost of sale.
ACoS measures that profitability of your campaign. It is computed as:
Ad spending ÷ Sales = ACoS
The lower your average cost of sale, the better. Why? Because this means that you don’t need to spend a lot on an ad to make a sale.
To avoid ad overspending, make sure that your ACoS is lower than your profit margin. So, if your profit margin is 50 percent, your ACoS should be way lower than that.
8. Hire an Amazon marketing agency.
Running your ads on Amazon is quite easy. You can do it yourself. But, if you want to maximize your results, it’s wise to hire an Amazon agency.
Most of all, be patient. Sometimes, it takes time to get results. The road to becoming one of the highest-earning and most popular Amazon brands can take time, but it’s all worth it.