2020 was one of the best years for e-commerce marketplaces in over a decade. It was also a successful year for all the sellers and brands that transacted using these marketplaces.
Amazon Advertising has marked a stupendous growth in 2020. It started to accelerate into the digital marketing space with full force. In 2019, Amazon came up with some cool options in Sponsored ads. These options gave more flexibility to the sellers in placing their ad campaigns. With the pandemic changes, global brands are moving from the experimenting phase to strategizing their PPC. These exciting developments promise a bright future for Amazon sellers. Therefore, SellerApp made 9 Amazon PPC predictions that are going to propel your business growth in 2021.
The answer is straightforward. Unlike Google and Facebook, Amazon shoppers have strong purchase intent, making the advertising features more profitable than the others. This is the major reason that sellers and brands are keen to explore this major marketplace.
Secondly, conversions occur on Amazon right away. This makes it easy to track campaign performance. Along with these, there are quite a few reasons why Amazon advertising is powerful.
Your ads occur beyond Amazon
With Amazon sponsored display, you can display your ads beyond Amazon. You can target customers based on their interests and shopping behavior on Amazon third-party sites like IMDb. Your products will reach a wide range of shoppers on and off Amazon.
Marketing is all about deriving the right data, and brands with rich data have a significant edge in the industry. Amazon advertising solutions differ from other PPC platforms because of strong buyer’s intent. Their data-driven insights combined with Amazon’s robust tools drive effective campaign optimization efforts.
Boosts bottom line with less budget
Advertising on Amazon doesn’t drain your money like the other platforms out there. Amazon ads are quite effective in terms of prices and ROI. Owing to its in-depth customer data and targeting capabilities, you can see higher returns for the same amount of spend. However, the average costs depend on your targeting and niche.
While the platform isn’t as advanced as Facebook or Google’s ad consoles, Amazon is definitely getting there!
Amazon advertising trends and predictions
Here are a few trends and predictions that Amazon sellers need to know to stay on top.
1. Adapting to the new normal
Let’s go with the most logical order – starting from the customer. With the recent changes in the pandemic, consumers’ buying patterns have changed. In Q2 of 2020, e-commerce sales grew by 31.8% compared to the first quarter. The COVID-19 not only played a major role in accelerating the e-commerce demand but also increased the demand in certain categories. The growth opportunity for Amazon FBA sellers spiked significantly, especially in the Home, appliances, and outdoor categories.
An increase in competition boosts the ad spend on Amazon
As a result of the influx of new brands over the last year, competition on Amazon grew. This competition coupled with the high ROI of Amazon advertising is boosting the advertising spend of brands on Amazon.
The challenges faced during the pandemic have spurred a diverse range of innovations by brands to capture the target audience. This varies from creating custom packaging to fine-tuning marketing and advertising messaging. The need for personalization has grown more important than ever. In that context, sellers and brands on Amazon should make the best use of Amazon A+ content, landing pages, and posts.
2. Amazon will strengthen its Pay to Play
Amazon started to transform its sponsored ads, and this is entirely changing the e-commerce industry into a Pay-to-Play arena.
A recent study in 2019 analyzed orders generated by various brands on Amazon. The study revealed that orders from sponsored ads have increased to 54% in 2018 from 16.3% in 2017. Categories like Home and kitchen have a high dependency on Amazon advertising solutions. The message is clear that the growing importance of sponsored ads play a major role in how consumers discover products on Amazon.
3. Amazon will amplify ‘Brands Presence’
Amazon started to increase its focus on building brands. It is pivoting to empower brands online. Recent instances such as Amazon stores, Amazon A+ content, and Amazon retail analytics are set to enhance brands’ presence on Amazon. All these products are more useful to vendors, especially B2B sellers. This helps the B2B markets to increase their online presence and increase brand loyalty.
With this focus, Amazon will grow from a ‘sales channel’ to a ‘brand builder’ within no time. Consequently, we predict that this will be one of the biggest Amazon advertising trends in 2021.
The entry barriers of the e-commerce industry are becoming slim, so the sellers must build their brand presence to be successful. Amazon is going to help you with that.
4. Impressing Gen Z Shoppers – Video marketing will thrive
For the past few years, attracting Gen Z has become a real challenge for Amazon. Gen Z shoppers have time and disposable income and are looking for engaging experiences online. However, until now, Amazon’s efforts could not entice experience-driven Gen Z shoppers. This is largely true of the apparel category on Amazon. As the demand grows, Amazon is tailoring experiences to attract a young audience.
To cater to this consumer demand, video marketing on Amazon is set to rise in 2021. In 2019, Amazon launched videos as part of advertising. The growth was evident in 2020. Marketers are increasingly using video ads to reach Gen Z shoppers. Consumers love videos, especially on social media channels like Facebook and Instagram. So, smart brands will use these video marketing strategies on Amazon as well as on other social media platforms that Gen Z consumers use.
Therefore, Video Marketing will thrive for potential shoppers.
5. Retargeting with Amazon sponsored display ads
In 2019, Amazon launched sponsored display ads enabling sellers to advertise their products on and off the platform. The online retail giant emerged as a self-service advertising platform, following the footsteps of the mighty Google.
You need to optimize your ads with the right keywords and target your product ads on the right platforms to maximize your ROI. Amazon’s sponsored display ads are highly capable of retargeting.
What is retargeting? Tracking your customer’s behavior and leveraging that data to bring them back to your product/website. Retargeting is a great way to increase your marketing ROI.
How do Amazon sponsored display ads help you with retargeting?
Sometimes, after you search for a product on Amazon and open a listing, you can see the same product ads on the other websites and apps you use. For sellers, this is an important part of the marketing funnel. As retargeting boosts your ROI, Amazon sponsored display ads will further grow in 2021 owing to its huge demand from sellers.
6. Is Amazon Posts the next big thing?
Amazon Posts allow sellers to show the curated images in Amazon shopping feeds. Basically, brands can use Amazon Posts similar to their social media channels and post content that is visible on Amazon platforms such as on the Amazon app and mobile web. The images are linked directly to product pages that can boost traffic and generate brand awareness.
With Posts, Amazon is trying to increase its traffic. Currently, they have a custom image, banner, product icon, text, and category tags. If you’re a seller enrolled in Amazon Brand Registry having a store in the US, you can participate in the beta.
7. Data Delays Will be Minimized
Many of us have experienced delays in our data reports. In 2021, we expect that the data will be addressed. Advertisers/sellers will be able to see the success or failure of a campaign within a few hours before the ad spend gets out of hand.
Fewer delays will help to understand the target audience and metrics better than ever, thereby making the PPC campaigns more effective.
8. Adjust Your Bids By Device
In 2019, we have seen bids by placement in PPC dynamic bidding strategies. These strategies allow you to customize your ad placement to increase your revenue. These bidding strategies evolved on Amazon over time.
So, we predict that Amazon will evolve to optimize ad campaigns by devices. As mentioned, Amazon wants to maximize customer experience, especially Gen Z shoppers. So, Amazon may fine-tune its bidding strategies for the top of search results on mobile or product pages on mobile.
Therefore, we predict that bid optimization by device and auto-optimization features are likely to happen in 2021.
9. Amazon will synchronize its ad features
Yes. Moving forward, we predict that Amazon will unify its features across seller central and vendor central accounts. Though new advertising features were introduced in Amazon vendor central in 2019, these components need to be unified for better access. Options such as ad groups are relatively new to vendor central and these updates can be expected in 2021 too.
Seller central account features are always optimized and updated. In 2021, we expect vendor central to catch up with seller central.
In addition, we think sponsored brands and sponsored products will be brought together. With broader integration comes more accurate data.
The rising power of Amazon Ads
Do you know that 1 out of 3 marketers will shift their ad spend from Google and Facebook to Amazon during the holiday season? (Forbes)
Retail marketers are increasing their ad spend on Amazon year on year. Retailers have three reasons for this.
ROI is high on Amazon ads.
Shoppers have strong purchasing intent.
Amazon has more than 100 million active customers (a huge customer base).
Amazon has robust audience data and powerful analytical tools that analyze customer search trends and historical data. This is quite beneficial for sellers and vendors to increase their sales. So, Amazon advertising will increase its relevance and revenue share in the global advertising landscape. This is why sellers and marketers need to be updated with the latest trends on Amazon.
Arishekar N has over five years web development experience and is the senior digital marketing strategies at SellerApp, Specialist in SEO, SEM and best conversion rate optimisation strategies that deliver industry leading ROI. Arishekar has helped companies through more effective search engine marketing and SEO strategies. He is most passionate about working with e-commerce companies.