How To Optimize Your Spending On Amazon Advertising

Rohan Thambrahalli

July 25, 2020

When total spending on Amazon Ads hit $10 billion in 2019, it wasn’t just a testament to the massive size of America’s largest online marketplace. Amazon Advertising – formerly known as AMS – allows businesses the tools they need to optimize their marketing strategy within the E-retailers’ massive search engine.

Yet there’s a gulf between marketers spending too much or too little on pay-per-click (PPC) ads, and those who’ve reaped the benefits for a strong ROI. Some of this knowledge is built on trial-and-error, finding out what doesn’t work through experimentation before setting a strategy in place based on your findings.

Creating a proper Amazon Advertising strategy doesn’t mean stumbling about in the dark looking for a solution. With the right guidance, you can start building an Online Marketing strategy that attracts customers without breaking your budget. Here are a few key tips to get you started.

Use All Available Campaign Types

Amazon Advertising currently offers three main types of campaigns:

Sponsored Product
Sponsored Brand
Display Ads

If you don’t know the difference between all three, don’t fret. What is important is that you’re willing to try out each one to see which gives you the best ROI – or, better yet, how you can adapt each campaign type to your particular goals within a Product category.

A sponsored product listing is exactly what it sounds like. Companies typically pay for their best-selling or newest product to be listed among relevant search results. A sponsored brand listing goes even further and includes your company logo, a customized headline, and three products of your choosing. When the user clicks your brand logo, they’ll be taken directly to your website. If they click on one of the products, they’ll be taken to its listing.

Amazon Display Ads work a bit differently. These advertisements are targeted by interest rather than keyword. If you sold aluminum water bottles, for example, a sponsored product listing would appear when a user searches “aluminum water bottle” on Amazon. In a Display Ad, your product may appear when a user searches for a similar product like “camping gear” or based on interests, such as “environmentally-friendly gifts.”

Which campaign type works best? You won’t know until you’ve tried. The level of micro-targeting on Amazon means there’s not a singular fit across companies or industries. Work on one or several rollouts for each of the three campaign types, then see which one creates the best ROI. You’ll likely invest the most time in whichever gives you the best payoff – however, that’s certainly not the end of the story.

DO NOT Set & Forget

Once you have your preferred campaign type(s), plan on returning to your content after giving it some time to run. The data you receive is decidedly valuable, but you must evaluate your findings regularly. Ignoring your results, even when you see an uptick in interest, will lead to decreased visibility and sales volume. Maintaining your position is key.

The Amazon marketplace is constantly evolving. New products in your category are listed daily, and new keywords present a chance to step up your marketing entirely. Moreover, search volumes fluctuate month-to-month, so re-strategizing must also happen like clockwork.

You don’t need to read every Amazon press release and industry research report to stay abreast of these changes. What’s most important is tracking your own data. Amazon Advertising allows you to define your click-through rate, Advertising Cost of Sales (ACOS), number of page views, cost per conversion, and other metrics in a given campaign. If you don’t know this data, you can’t use it. And if you’re not implementing these numbers into a re-optimized Marketing strategy, you won’t receive the best results for your efforts.

Company reviews of your Advertising strategy should be regularly scheduled and include all relevant parties, from Marketing to Sales to Executives, depending on your goals and availability. Foregoing the chance to re-optimize your advertising strategy, even for just one month, can lead to wasted investment and a hit to your visibility. Keep your product and brands in the customer’s eye by adapting to every change.

Don’t Focus (Solely) On Your Best-Seller

There’s a reason customer obsession is at the top of Amazon’s 14 Leadership Principles. When you “start with the customer and work backward,” you’re creating a holistic strategy that is based entirely around what works best for your buyers – and not on outdated or misguided assumptions.

One of the most consistent beliefs – across brands and industries – is the idea that your best-selling product should garner the most advertising investment. This is never a foregone conclusion, particularly considering the means and tools Amazon provides to boost your inventory’s visibility.

In a Sponsored Product campaign, viewers may already be aware of your best-selling product from organic results or be seeking something novel that will stand out. There are endless possibilities for explaining why one product sells better than another, yet by tracking your data with a willingness to accept change, you’re on the right path toward customer obsession.

This goes double for Sponsored Brand campaigns. Your best-seller may not fit well with the other two products users will see as part of the brand advertisement. Similarly, the interest-targeted (rather than keyword-targeted) nature of Display ads can lead to poorer-selling products to gain greater traction online. A customer-first mindset will guide you to promote products they want to buy – provided you’re willing to listen.

Optimize Your Product Details

Creating more sales through Amazon Advertising doesn’t mean working solely with the data. You can spend a bundle on all three types of ads, but if your content strategy is subpar, you just won’t see results.

One good place to start is by ensuring your product description includes the keywords you’re using in advertising. This is not only good for Amazon’s A9 algorithm but also ensures your potential customers see that your product is relevant to their search term. Other best practices include keeping the product title and description short, using bullet points for lengthier descriptions, and focusing on the product’s benefits rather than its features. While these methods may seem common sense, too many companies – including world-famous brands and your largest competitors – have overlooked them.

This goes beyond individual products. In Sponsored Brand campaigns, for example, you’ll have the ability to write a custom headline for your store. An experimental approach incorporating A/B testing will eventually lead you to a messaging strategy that runs seamlessly alongside your advertising approach.

Succeeding on Amazon Advertising isn’t something that happens overnight. It takes time and an iterative approach to your business practices. Some of the revelations you’ll find in the data may surprise you. Products that have done spectacularly elsewhere may be so-so to Amazon’s users. On the same token, this could be a chance to highlight products that haven’t been as popular in the past but are waiting for a strong brand or product campaign to shine. Follow your customer’s demands wherever they may lead, and see how your company thrives throughout the e-commerce age.