Amazon’s advertising solutions have come far since the platform’s early days, where you would basically put up anything you want on your detail page, with no regard for quality or messaging or targeting, and still see results.
Those days are long gone, replaced by multiple self-serve and managed advertising solutions, each with its own effects and best practices.
Amazon is very much an evolving marketplace. What was true fifteen years ago isn’t true today, and what’s true today won’t necessarily be true tomorrow.
But change can be predicted if you know enough about the platform and pay close attention to what’s happening in the market.
Fortunately, Pat Petriello, Tinuiti’s Head of Marketplace Strategy, has been working within Amazon long enough to have that insight. Petriello shared those observations and more at this year’s AdDiego. We’ve collected some of his points below.
Amazon Advertising’s increasing importance
Sponsored Ads have always been an important part of any seller’s marketing strategy. But their value–and the demand for them–has been increasing in recent years.
This is reflected in the surge in CPC pricing. In the past, average CPCs for popular keywords had never broken a dollar. These days, it’s not strange to see CPCs for high-competition keywords in the $2 range (or higher).
This isn’t necessarily a bad thing. The costs are increasing, but so is it’s value.
Brands are paying more for their ads, but the payoff is growing exponentially greater. Petriello shared the story of one Tinuiti customer whose CPC rose by 23%, but whose ad sales rose by 261%.
In Q1 through Q2 of 2019, Amazon advertising was proven to make up more than 25% of the total sales of brands that Petriello has worked with–sometimes even up to 60%.
Part of this can be attributed to the larger number of what Petriello calls “serious” advertisers who invest a lot of money and effort into their campaigns. Inefficient players who don’t add value to the market have since exited, and are no longer contributing their ads to the noise.
A change in mindset
“Organic” used to be the be-all-and-end-all strategy for Amazon sellers, who would do their utmost to ensure high organic placements. But that was when getting first in organic results would also get your first position in on-page results.
Now, however, getting first in organic doesn’t mean so much. Amazon and other platforms have increased the prominence of paid ads such that your first truly organic result will be in the middle of the page. This is true in both the desktop and mobile versions of Amazon.
“Amazon has given you all the tools necessary to manage and optimize this performance, for those willing to invest time and effort into learning it. Adoption, investment and optimization are what will set you apart from your competitors,” Petriello says.
It’s no longer enough to simply be on Amazon and post an ad every now and then. That’s not adoption. Adoption is embracing new advertising products and opportunities with the appropriate investment in resources.
Chief among these advertising opportunities is the Amazon DSP demand-side platform. Many sellers ignore or under-utilize out of pure ignorance, unaware at its potential impact to the business. This won’t last long, and your brand should get as much of a head start as possible.
Your storefront is just as much of an advertisement as a product display ad. Stand out from the crowd by having multi-page storefronts filled with high-value content like comprehensive product detail pages with high quality photos and designs.
Investment is not simply tossing your Amazon budget a few bucks left over from the sales budget. It involves serious, thoughtful and strategic allocation of funds to ad products that will provide the most impact.
Part of this is investing money into the discovery phase, where you try out different ad types to see which gets you the most bang for your buck. This includes experimenting with keywords, target demographics and content. Then pour in the rest of the budget once you’ve discovered the sweet spot.
The ultimate goal is to build a demand creation funnel on Amazon that will convert just as much as your own website (or better). That will involve significant resource and time investment, but the payoff will be enormous.
Optimization is the final ingredient in your Amazon advertising mix, and can’t be skipped.
Why? Because no matter how well you choose and configure your initial Amazon advertising campaign, there will be change over time. You do not want to log into Amazon after months and discover your campaigns have been floundering for all that time.
One effective way to stay ahead is to have your organization talk to itself, Petriello says. Have other departments share information with the Amazon team so that you’re all on the same playbook. Your team should receive up-to-date information on shopper details, market demographics, buyer behavior and more. Anything less would be obstructing your success.
Ads need to be tended after they’ve been published, not left to rot. Always test and refine ads on a regular basis, otherwise, your ads will become irrelevant and ineffective. If you don’t have the time or manpower to test things yourself, recruit an agency partner to do it for you.
It has to be done.
“The less you test, the faster you die,” Petriello says.
The future is bright
As buyers start turning more to Amazon and similar platforms to serve their shopping needs, sellers will need to lean more heavily on ecommerce to move product. Advertising will be required to stand out in an increasingly crowded market. And not just any advertising.
Your ads will need to be strategic, well-produced, and heavily maintained in order to be and stay effective. If your brand does not yet have a dedicated, experienced team managing your Amazon ad campaigns, now is the perfect time to start growing one–or finding an agency that can help you and train you.
Like what you read? Watch the entire presentation recorded from AdDiego.