Nozzle Insights

The latest news and industry insights for all things Amazon advertising, both for agencies and sellers. Keep in the loop for Amazon search and display stories, as Nozzle helps brands leverage success in the e-commerce world.

4 reasons you need to improve your Amazon advertising strategy: and what to do about it

    Amazon is the center of eCommerce. Facebook and Google often get a reputation for being the duopoly on online advertising. But Amazon is a close third, and the gap is closing.  What’s more, when it comes to retail, Amazon is King. 

    As an eCommerce retailer, if Amazon is not front and center in your PPC strategy, you are making a mistake. What’s more, Amazon is changing their policies around data — sharing more customer data with 3P Sellers than ever before. That means that the level of targeting and efficiency that can be achieved with a properly planned Amazon advertising strategy has never been higher. It also means that the level of competition on the platform is on the rise. 

    If you want to compete on Amazon in 2020 and beyond, you need to think more carefully about data. That applies to advertising-focused and organic strategies. But as any eCommerce manager knows — you need to think about both. 

    We are going to make the case for why you need to improve your Amazon advertising strategy, and give you a few tips on new tools you can deploy to help get you over the line and drive sales on Amazon. 

    Amazon Advertising Strategy

     

    1. Amazon remains the premier eCommerce platform

    Over the past ten years, Amazon has changed the face of shopping and business. Even now, Amazon products alone account for an astounding 49% of online sales in America. 

    The simple fact is that Amazon is a name consumers trust. In fact, 89% of consumers state they’re more liable to trust Amazon than any other eCommerce site. This, even though 58% of Amazon sales come from independent merchandisers like you.

    In the US, 49% of all online product searches start on Amazon. There is massive non-branded search volumes on the platform, and getting your product front-and-center for those searches is key to your ecommerce success. Amazon provides a trusted platform that shoppers turn to in order to buy products and search for options. You need to get yourself in front of potential customers at each and every stage. 

     

    2. Amazon ads have the highest conversion rates in eCommerce

    Speaking of perfecting your strategy, remember that Amazon ads have the highest conversion rates in eCommerce. While players like Google might seem like obvious and tempting ad campaign options, research reveals that they offered conversions of just 2% compared with Amazon’s 9.5%

    Although shoppers use Amazon to browse products, the platform also attracts a disproportionate number of bottom-of-the-funnel customers with a high intention to purchase. Combined with the ease of returns, free shipping and over 100 million Prime subscribers in the US alone, we should expect to see some of the highest conversion rates of any ad platform — and we do. 

    With increases in fees to Amazon FBA, Seller margins have never been tighter — cutting waste is key. If you want to enjoy an ROI you can rely on, then Amazon PPC is a marketing must. You could even say that optimizing your Amazon advertising strategy is fundamental for eCommerce success.

    Improve ACoS

     

    3. The Buy Box increases PPC pressure

    Many shoppers are unaware of the Buy Box. But as a retailer, you know it’s critical. 82% of Amazon sales go through this function. In order to even bid on sponsored posts, you need to be ‘Buy Box eligible’ for that product and search term. But just because you are eligible, doesn’t mean you are guaranteed a Buy Box win. It’s possible that you win a Sponsored Brand bid but not the Buy Box. Sponsored Product ads will only appear when you have, in fact, won the Buy Box. However, this can still create attribution problems, and even end up funneling shoppers towards a sale for your competitors. 

    For example, imagine that a shopper clicks on your ad on Monday, but only returns on Tuesday to make the purchase. The 7-day attribution window for Seller Central ads, and 14-day attribution window for Vendor Central ads will pick this up. However, if you are only winning a small share of the Buy Box for that product, the shopper may end up purchasing from a competitor when they return. This not only means losing a sale, it can skew your data by not delivering a full analysis of sales attribution, and the actual convertibility of your ads. 

    If you want a high ROAS (or low ACoS) considering your share of the Buy Box for different terms is critical. An optimized PPC strategy needs to take into account these different percentages and incorporate them into your bidding strategy — focusing bids on high-converting terms for which you are consistently winning the Buy Box.    

     

    4. Amazon is sharing more data — and your competitors are reacting

    At the start of 2019, Amazon introduced Amazon Brand Analytics (ABA) to provide 3P Sellers who are registered brands with simplified access to customer data. Although not as detailed or transactional as the data provided through Amazon Marketplace Web Service (MWS), this new, free analytics tool lets Sellers see:

    • Item comparison reports
    • Demographics reports
    • Click/conversion share against search terms 
    • Frequency of search terms
    • And more

    These are  invaluable insights, but any registered Amazon 3P Seller can access them. As well as using this tool yourself, then, improving your strategy on the back of these insights and others is the only way to stay ahead on this rapidly developing and increasingly competitive sales platform.

     

    How you can improve your Amazon PPC strategy today

    So, how exactly can you improve your Amazon PPC strategy? 

    In reality, getting on top here isn’t a complicated science, and it primarily comes back to your customers. As with any successful marketing campaign, understanding their needs is fundamental for making ripples.

    Amazon may have made this a more manageable goal than ever, but you’ll need to use more than those wide-spread analysis tools to get an edge you can utilize. Some other vital steps to take along the way include:  

     

    1. Seek data tools outside of Amazon

    ABA is an invaluable device but, with every other 3P Seller using it, this alone isn’t enough for improvement by any significant margin. What’s more, ABA offers generalized data that can still leave you at a loss when it comes to the specific.

     

    Third-party analytics tools can pull reports from ABA, and combine it with the PPC attribution and reporting tools that Amazon makes available. Beyond that, a good analytics tool will be able to add transactional data from Amazon MWS to craft detailed and product-specific profiles that will help you get hyper-targeted with your PPC campaigns. By applying machine learning and AI, detailed and powerful predictions can be made on both the products you should advertise and the best way to go about it.   

     

    Without adding to your workload, such software can provide self-service analytics based on unique customer data you can use. Instead of gaining general impressions, you’ll be able to direct data visibility, centralize and store big data, and optimize automation preferences depending on unique needs. That, in itself, can bring efficiency to your PPC strategy in ways you’d struggle to achieve otherwise.

     

    2. Use data to audit your strategy 

    Collecting quality data will never lead to results if you don’t know how to use it. Make sure that doesn’t happen by knowing how to use the vast amounts of information now within your reach. Ultimately, value here is only possible when you understand the data you should focus on. Some key options for your Amazon strategy include - 

    • Search term optimization

    When placing PPC bids on Amazon, you can bid on exact phrases or broad match and phrase match buckets of terms. You can also allow Amazon to auto-match your listings based on keywords or product categories. These automated matching capabilities can help you discover search terms used by shoppers, but it can also lead you to list for search terms that aren’t that relevant to your product. By tracking these results, you can isolate the highest-converting terms for exact match bids. Check out our article on Amazon search term optimization if you want to learn more.  

    • Audit your waste 

    Not all of your PPC ads will perform equally. Some of this has to do with listing for irrelevant terms using automated bidding strategies. However, certain relevant terms may simply appeal to customers who are less ready to buy. Regardless of the reason, having a straightforward understanding of under-converting search terms will allow you to cull these wasteful terms (adding them to negative keyword lists) and increase your ROI. Learning how to audit your Amazon PPC campaigns is critical to your success. 

    • Demographic profiles and buying trajectories 

    ABA offers an aggregate view on demographic profiles, with limited information that might not prove useful. By comparison, outside, AI-led analytics tools reveal buyer locations, purchase histories, and even income information that’s guaranteed to help you tailor ads.

    When you pair purchase information with demographic profiles, you can land on ‘buying trajectories’. By showing when and how shoppers complete sales, this can help you to perfect listings with everything from negative keywords to time-specific PPC campaigns.

    • Customer lifetime value

    Customer lifetime value (CLV) is a guaranteed way to maximize profits and build a reputation you can uphold, even on Amazon. Analytics here can be hard to come by, but AI-led tools can use everything from purchase habits to demographic profiles to predict customer lifetime value. 

    This big-picture approach lets you understand the true value of an ad. Rather than looking at restricted ACoS or ROI measurement, you can look at that PPC bid in the context of customer acquisition. From this perspective, it might even make sense to take a loss on a first purchase in order to ensure long-term gains. But this kind of strategy is only possible with a detailed and robust understanding of CLV. And advanced analytics tools are the key to understanding CLV.  

     

    Understand customers and Amazon sales will follow

    Ultimately, standing out in a large and competitive marketplace is as simple as treating customers the same way you would in an intimate shop setting. By utilizing AI-led data to personalize and perfect, you can stand above the crowd without even adding to your workload. Simply seek the tools that make it possible, and then consider the data you can use to take your Amazon advertising strategy above and beyond. 

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