Amazon should be a part of your e-commerce marketing strategy. With more brands turning to Amazon to sell their products, clearly, the retail giant has become one of the potential ways to acquire a new audience. Experimenting with different brand-specific opportunities and trying different ad types and targeting options is a must.
As the marketplace is growing more and more competitive, the need to use an advertising strategy to connect with your customers is essential. The wrong approach would often cost you time, effort, and money. To avoid such consequences and get the right approach, I came up with five core components of an effective Amazon PPC strategy.
Let’s dive right in.
Pillar #1: Clear business goals
You must have clarity on your business goals. Most advertisers or agencies talk about increasing sales. However, you need to look into the fundamental aspects before you create campaigns.
- What stage is your product in – Launch, Profit, Mature, Liquidate
- Are you looking to increase your market share?
- Do you want to clear underperforming stock?
- Are you looking to grow long-term profitability?
- Do you want to reach new customers or turn existing ones into a loyal customer base?
Align your business goals with your campaign objectives, so you can make the most of your ad spend. Asking the right questions will help you focus on diversifying your campaign objectives. For example, during the new product launch, you want to build sales momentum. On the other hand, if you want to increase your market share, you will need to target competitors’ listings.
Gaining clarity on your goals may take a while, saving money, time, and effort in the long run.
Pillar #2: Understand the buyer’s journey – ‘Plug and Pray’ to ‘Plug and Play’
In marketing, timing is everything, wouldn’t you agree? Engaging your buyers with ads and messaging at the right time of their buying journey is the key to landing a sale.
Why do you need to understand their buying journey?
By understanding the customer’s journey, you will create opportunities to interact with them at every step of their journey. This will increase your chances to convert them and create room to build brand awareness and trust.
As an advertiser on Amazon, you should ask the following questions to create a customer-centric marketing strategy.
- What are the ways that customers can learn about your product?
- Are they aware of the problem?
- What touchpoints are involved when they are buying your product or a similar one?
- What happens after the sale?
Asking questions like these would allow you to answer the most important amazon advertising questions that you cannot otherwise answer, like:
- What kind of sponsored ads should you use?
- What ad targeting type should you use?
- How to craft the right brand message
- What is the most critical metric you should consider for a specific campaign?
- Can I maximize new-to-brand metrics?
Basically, it helps to convert your ‘Plug and Pray’ approach to ‘Plug and Play.’ If you’re an advertiser on Amazon, I know you can relate to what I am saying.
Understand buyers, form a strategy, influence them, and sell the result.
Pillar #3: The right advertising options for you
If you have understood the above point, this would be as easy as pie for you.
Amazon offers comprehensive advertising solutions and targeting options for everyone.
Sponsored products, Sponsored brands, Sponsored display ads – All these three play a unique role in optimizing your ad spend.
However, you should pick the right advertising choice based on your funnel and optimize your PPC campaigns.
Sponsored products: These ads appear in search results, within the listings, and allow you to drive keyword and product-specific campaigns. They are apt for growing sales, boosting rankings, and more.
Sponsored brand ads: These amazon sponsored brand ads are great if you want to increase your brand presence, engage customers with your brand story, and are also valuable if you want to target generic search terms.
Sponsored display ads: These ads are great if you want to retarget or remarket your product and/or reach new audiences. This advertising type is more of a programmatic solution that allows you to target customers based on their shopping behavior.
The more you refine targeting, the better your ads work. When your ads appear in the right places, your ROI improves significantly. Within each ad type, you will have different targeting types.
For instance, automatic campaigns are good to harvest potential keywords, and manual campaigns are essential if you want to control your ad spending.
When you create a sponsored brand ad, you need to include category-level search terms and branded search terms to generate awareness among the target audience.
Pillar #4: Profitability
Lowering ACoS isn’t always the right way to increase overall profitability. Ideally, your campaigns are profitable if the profit you generate is higher than the ad spend. So you should know break-even ACoS to ensure your ads are profitable.
You should also know that not all revenue is created equal. Often, it is cheaper and easier to retain existing customers than to bring in new ones. So if you want to increase the CLV (customer lifetime value) of a specific product, you can change the breakeven point accordingly. You can, therefore, increase your ad spend and still create long-term profits.
Pillar #5: The Advertising Flywheel
Build momentum and run on autopilot. This is the advertising flywheel.
Your sales velocity strongly influences your ranking on Amazon.
Simply put, More Sales = Better Rankings.
Higher rankings combined with good customer service results in better product visibility, which increases your sales. To accelerate your growth and profitability, you need to introduce Amazon advertising to the mix.
With PPC, you will be able to target more keywords, rank higher, and grow sales. This momentum will, in turn, increase your overall profitability.
Keep in mind that PPC is not about winning bids and sales but should be a part of your overall strategy. Use it as a way to achieve your long-term business goals.
The sales momentum you generate using Amazon PPC will help you get data. Having data will give you better insights into customer behavior, and help you make better business decisions.
Transform your business with Amazon Advertising
Now, that might be a lot to take in. If you are a seller or an advertiser with a huge portfolio, all these tasks can consume a lot of time, and scaling your Amazon business would become next to impossible if you are not acting on time. So you can also consider outsourcing your advertising efforts to an agency that can help you achieve your long-term and short-term business goals much faster. How do you decide if the advertising agency is the right one for you? Before you actually pick an advertising agency, see:
- If they use all three advertising types to scale ad campaigns
- What kind of strategies do they employ to segregate the campaigns, ad groups, etc?
- If they use third-party software or if they have one of their own
- Considering the time invested in scaling faster, do they automate the bid optimization process?
- Do they employ core PPC strategies like keyword harvesting, bid optimization, negative keyword strategy, and more?
- Most importantly, evaluate if the agency is aligned with your long-term and short-term goals.
Additional Read: TACoS Amazon Advertising – Decoded for You
Brand management and advertising are the two of the top variables that impact your game plan on Amazon. However, other factors influencing rankings, conversion, and brand impression on Amazon, such as inventory, pricing, and reputation, also need to be considered.
Considering the dynamic nature of the Amazon marketplace and the e-commerce industry, brands definitely need an artificial intelligence-powered system and hands-on Amazon expertise to engage shoppers and convert them into valuable customers.
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