Last updated - June 14, 2022
Whether or not you are a seller, you can’t deny the power and influence Amazon holds in the realm of advertising. While there are many other online advertising platforms(such as CMS platform), Google and Facebook, to name the biggest ones, entrepreneurs still take advantage of Amazon advertising and its benefits to their business ventures.
At this point, you might have many questions about Amazon advertising, which is understandable. For example, you might ask yourself what Amazon advertising is in a nutshell, which type of Amazon advertising methods to choose from, or perhaps what things to consider before investing in Amazon Advertising. This article will help answer all these questions, give you insights into these topics, and finally allow you to come up with decisions that can benefit your online business in the long run.
Interested in Becoming an Amazon Seller? Here’s Why You Should Go For It
Selling on Amazon has always been favorable, and it has never been more profitable than before. With 80.5 billion U.S. dollars of revenue generated for its third-party sellers in 2020, it continues to thrive and dominate within the e-commerce realm.
Entrepreneurs worldwide recommend having products to sell on Amazon for so many reasons, including the flexibility to cater to virtually all sellers from all walks of life, an abundance of options in selling items, strict quality standards in their platforms, logistics, and so many others!
Another really great thing about being an Amazon seller is the Fulfillment by Amazon (FBA) option. This program lets an Amazon FBA seller ship their products to Fulfillment Centers, and then voila! Amazon will handle all the logistics from the warehouse to the customers and manage returns.
But what sets Amazon apart from other eCommerce platforms is that it has a state-of-the-art advertising program that welcomes sellers both on and off Amazon. Although Amazon only held a total of 10.3% in the total U.S. net digital advertising revenue in 2020, it has an astoundingly high conversion rate of 13.5%. This rate is already incredible, seeing that other advertising platforms have their conversion rates as little as ten times lower than that.
Here’s what Amazon advertising has in store for you. Continue learning about Amazon Advertising down below!
What is Amazon Advertising
Although it’s recognized more so as a marketplace, Amazon also offers advertising services for anyone who wants to reach their business goals. Are you planning to boost your brand awareness to the public, reach audiences where they are usually located in the virtual space, attain your sales goals, and improve your revenue? Then, you’ve come to the right place!
Amazon advertising can be categorized into Amazon PPC and Amazon DSP. Under Amazon PPC, three kinds of ads are Sponsored Products, Sponsored Brands, and Sponsored Displays. On the other hand, Amazon DSP has audio ads, display ads, and video ads.
So, where are Amazon ads usually located? Amazon ad placements can be found virtually everywhere – from the shopping results pages, product detail pages, Amazon subsidiaries (IMDb.com, Twitch streaming site, amongst others), and third-party affiliates. They can range from audio, image, video, and text ads and include a combination of those three. Sponsored Products and Sponsored Brands in Amazon PPC can be found on Amazon.com, while you can discover Sponsored Display on and off the website. DSP ads can also be found on and off the website, targeting potential customers usually found in cyberspace.
The cost of advertising on Amazon
There are two main modes where Amazon charges its advertisers: PPC and PPM.
The Sponsored ads offered by Amazon charge the seller on a PPC basis. PPC stands for Pay-Per-Click, which translates to when a shopper clicks the ad. On the other hand, PPM (or Pay-Per-Mille) is incorporated as a charging basis for DSP advertising. PPM refers to the amount per thousand impressions made through the said advertising type.
Advertisers set a bid for the Sponsored Products and Brands ads for every campaign. This bid will serve as the cost per click (CPC) and will be vital to compute your advertising cost of sales (ACoS). Think of it like an auction wherein the highest bidder will get the best rankings, assuming no one chose their maximum bidding significantly higher. This is because the top of the shopping results has the highest bid to pay when the shopper clicks it, and consequently, the proceeding ranks have lower bids.
Amazon DSP differs by having both the self-service and managed-service options. The former has the advertiser be in charge of everything related to DSP campaigns. In contrast, the latter has an Amazon-accredited DSP manager taking care of everything with a starting price of 35,000 USD. Yep, costly but worth it if you have the right DSP partner.
5 Points to Consider Before Using Amazon Advertising
Goals for Your Business
Amazon advertising provides many benefits for all types of businesses. On the other hand, your business has a situation that it can improve on a certain aspect. While choosing ad types varies on a case-to-case basis, you can see which ad tailors your business needs and goals.
Take, for example, having a brand of home refrigerators that have been serving households for at least ten fruitful years. Depending on your budget and management direction, you may choose Amazon DSP to reach heads of households who can purchase your products. Ad placements in DSP can programmatically target and meet your potential customers based on their behavior in the digital world.
On the other hand, if you are an Amazon seller looking to boost your sales and revenue, Sponsored Product ads may be the best option for you. This type of ad directly showcases your products to shoppers in many areas of the Amazon marketplace, making your products hit a better spot in the shopping results and more likely to be bought.
Before delving into Amazon advertising, you need to clearly understand what you want to achieve. Do you want to build a brand reputation? Or perhaps you want to increase revenue? Do you want to generate clicks that will eventually result in a sale? These are just some of the questions that you may want to ask yourself to have clear-cut goals that can lead you in the right direction in advertising. These goals will be the springboard of the future steps of your planning.
Nature of Your Business
Getting a clear picture of your business and where it positions in the marketplace gives you an idea of how you can strategize your advertising. You may do this task by stepping back and looking at your business from different perspectives.
Do you sell on non-Amazon, third-party eCommerce platforms like eBay and Etsy? If yes, you might want to consider using Amazon ads that cater to sellers off Amazon. Is your online store enrolled in its Brand Registry if you’re on Amazon? If yes, then you might want to consider choosing Sponsored Brand ads. If not, then you may opt to cross out Sponsored Brands.
Or perhaps you have your eCommerce website? Unfortunately, setting up your ad campaigns can take a long time to pull off. So, skip the hassle of manually transferring your inventory product information from your website to another by simply using useful plugins such as WooCommerce. WooCommerce also has the option to migrate your product data when you want to start selling on Amazon.
All these technicalities on how your business is structured can impact which ads to invest in. So see to it that you choose the best and the most relevant ads that will profit you. After all, you are putting in money to achieve your business goals.
Your Target Audience
Customers drive revenues for your business, and the audience you set is the group of people who tend to buy your products. So treat them as your lover that you have to court.
You might want to evaluate your audience profile, like what are my audience’s typical age and sex? What typical behavior and activities do they have? Where are they usually located in the virtual space? For example, you can’t just set your ads to millennials if you’re selling adult products, such as adult diapers. Not saying it’s wrong, but it’s less likely to convert into a sale.
While the audience you set will most likely be based on the characteristics of your current customers, there will be trends along the way that can shift the way your products are perceived. For example, retro-looking apparel used to be sought after by middle- to old-aged people, but the younger generations may adapt them.
Positioning your product ads at the right second can trigger insane amounts of impressions and conversions when done right. So, target your audience well and be on-trend!
Your Store
Before delving into Amazon advertising, make sure you have a store that is ready to draw in customers, attract them to hit the Buy Box button, and have an overall systematized way of purchasing experience. You don’t want to drive potential customers away because you have bugs on your eCommerce page.
Do your research. Make a checklist. Make sure your products have appropriate and engaging product names, informative and complete product descriptions, and professionally-made product images. There is no shortcut in doing these steps – your product should speak for itself on the screen. Customers will always see effort and quality.
Do not hesitate to freelance these tasks to optimize your store or hire an agency with a reputation for great professionalism. These people will save you time, energy, and effort while generating more revenues.
Budget
Perhaps the most obvious part of thinking about Amazon advertising is the budget you have. Setting a budget may sound simple at first, but this step needs to be carried out deliberately and thoughtfully. Setting your budget and tracking your spending is an indispensable part of knowing whether or not your ads are showing successful results.
Amazon PPC campaigns should be set up first. There, you’ll choose the settings that can limit your budget. In addition, PPC specialists and sellers commonly monitor your campaign weekly.
We recommend starting with a small budget allocation for advertising in your business, just to test the waters. After all, starting small is a lesson for everyone to see what clicks with your audience and customers—the lesser the stake, the lesser the losses. When you’re confident that an ad campaign will click in the upcoming weeks, you can raise your stakes higher.
Use WooCommerce For Your Online Store Today
Strategizing your advertising is no easy feat with so many factors to consider. Almost every case is unique, and there is no foolproof way to succeed. But the good news is that you can reduce the risk of failing and most likely get the goals you want by using the resources right at the tip of your fingers.
Even though Amazon is the most up-and-coming advertising platform, Google still holds an undeniable power. This part is where you can take advantage of this opportunity to delve into Google advertising and automate this whole process using WooCommerce.
Entrepreneurs advertise WooCommerce products on Google because of its virtually free and intuitive user interface shopping platform that lets you migrate and control your ads easily. You may transfer your product information from one platform to another, giving you a stress-free experience and more time for yourself.
Final Thoughts
Amazon advertising requires many resources – time, money, effort, and sometimes skilled help – to make everything work. Blunders are expected when carrying out your advertising campaigns, especially when getting started, so there will always be a small percentage of underperforming due to unforeseen circumstances.
Don’t let this stop you from pursuing Amazon advertising. Mistakes are made along the way; learning never stops. To get ahead of the competition means constantly innovating, looking at the teeny-tiny holes of success. Work on them and forge your path to get the conversion rates you’ve always wanted.
