Amazon is one of the biggest online marketplaces for buyers and sellers. It gives vendors access to an enormous audience of 300 million prime members. Because of the variety of things sold on the platform and multiple sellers selling those items, businesses need a strategy to stand out from the competition, which is where Amazon Advertising plays a huge role.
What is Amazon Advertising?
Like Google’s pay-per-click advertisements, Amazon Advertising charges vendors only when viewers click on their advertisements.
Amazon’s ad revenue is expanding significantly as it diversifies its product offerings throughout its ecosystem. Sellers can target consumers on platforms like Amazon.com, Fire TV Sticks, IMDb.com, Kindle, etc.
Any Amazon seller looking to build their brand and boost product sales must invest in online advertising. There are various advantages to using Amazon ads for your business, such as:
- Increasing customer awareness and recognition of the brand.
- Reducing the sales cycle by directly addressing clients with advertisements.
- Raising product awareness and sales history.
- Growing organic sales as a result of Amazon’s improved product rankings.
- Gaining essential knowledge about changing consumer behaviour.
- Using campaigns to target a more specific audience.
- Obtaining information on your buyers, especially those who are brand new.
- Discovering the ideal methods to attract customers at a particular time.
- Monitoring your progress and making choices based on data.
Amazon’s Advertising Model
Amazon’s advertising model is based on a pay-per-click (PPC). However, it differs from advertising models on other online marketplaces. For instance, promoted listings on eBay support the pay-per-sale (PPS) funding model.
There exists a strong relationship between organic search and paid ads on Amazon. The goal of the platform is to help you drive sales by showing best-selling and high-converting products relevant to your customer’s query. Amazon aims to prioritise products that customers are more likely to purchase. These include products with good feedback and sales history. Eventually, when product sales and its feedback improve, their organic rankings also improve.
What are the Benefits of Amazon Advertising?
Amazon ads offer various benefits that significantly improve your marketing efforts:
- Quality and brand-safe environment
Amazon has a vast user base. It’s trusted by sellers and buyers alike and facilitates brands to advertise their products.
- Improves product visibility and sales history
Amazon Ads help you boost product visibility and sales history. With targeted ads, your products can appear more frequently for relevant customers’ queries in search results and related products section. Eventually, it will help you improve your product’s overall rankings on Amazon, ensuring more sales in the future.
- Reduces the sales cycle
Amazon Ads help you reach customers who have already made up their minds about purchasing a particular product. Thus, it reduces the sales cycle. Amazon Ads can help you reduce the time to create awareness about your product among the customers.
- Improves brand awareness
You can improve your brand’s awareness among a broader audience. Strategically placing ads on Amazon can help your brand gain visibility among customers who are actively looking for products to purchase and among those who are browsing related product categories. It will help you create an impression among your customers even if they don’t make an immediate purchase.
- Offers valuable insights into changing consumer behaviour
With Amazon Ads, you gain access to insights into changing customer behaviour and shopping habits. You can also learn how they interact with your ads and products. It offers you insights into your customer’s shopping journey, from when they initially searched for a particular product to when they finally made a purchase. This data can help you understand how your customers shop, who your customers actually are, what influences their buying decisions, and more. You can use this information to your advantage and tweak your ads to further increase sales.
- Learn the best ways to acquire new customers
Amazon Ads allows you to experiment with different ad formats and marketing strategies. It helps you determine what works best for your online store in terms of acquiring new and retaining old customers.
- Track your ad campaigns and make data-driven decisions
Lastly, with Amazon Ads, you can monitor and track the performance of your ad campaigns in real-time. Tracking is essential since it enables you to make data-driven decisions. It helps you optimise your ads based on actual data, instead of guesswork. Eventually, you can spend your budget more efficiently and maximise your return on investment.
Amazon Advertising Costs
Advertising costs on Amazon depend on four factors: bid, cost-per-click (CPC), cost-per-mile (CPM), and your budget. Let’s look at them in detail.
- Budget
Your budget will define the maximum amount of money you want to spend on your advertising campaign on Amazon.
- Bid
This represents the amount you are willing to pay every time a shopper clicks on your advertisement on Amazon. Amazon Ads also enables you to use automatic bidding. This means your bidding will be automatically optimised to ensure that you reach your objectives with Amazon Ads. Alternatively, you can opt for manual bidding and set your own bid.
- Cost-per-click (CPC)
CPC refers to the amount you pay each time someone clicks on your ad. This amount is calculated by dividing the total amount of money you spend on an ad by the number of clicks it receives. In Amazon Ads, Sponsored Products and Sponsored Brand campaigns are examples of CPC advertising. These advertising methods ensure you pay only when someone clicks on your ads.
- Cost-per-mile (CPM)
CPM refers to the amount you pay to deliver 1,000 impressions of your ads.
Types of Advertising On Amazon
Advertising is a great way to approach more customers on Amazon. Their advertisements allow sellers to target customers looking for specific brands or categories of products. To increase brand familiarity, businesses may also use display and video commercials. The following advertisement types are available on Amazon:
Sponsored Products
The most common Amazon product listing advertisements that appear on the search results and product detail pages are sponsored product advertisements. By monitoring clicks, cost per click (CPC), spending, sales, and advertising costs of sales (ACoS), companies can evaluate the effectiveness of their sponsored product campaigns.
Sponsored Brand Campaigns
Sponsored brand campaigns are searched headline advertisements highlighting your products while promoting your brand. Ads that target specific keywords and products are also used in this technique. These advertisements display numerous products above, below, and next to the search results.
Product Display Ads
Businesses need to cross-sell and upsell their products. The purpose of product display ads is to increase a brand’s visibility.
Store Ads
High-profile sellers must create an Amazon store page to promote their brand and the items they sell. Customers should be able to navigate a brand’s store page and find whatever they need. Store advertisements target specific keywords and appear above search results.
Video Ads
Video ads display videos instead of images in the advertisements. This form of advertisement is the most unappreciated, not only on Amazon but also on Google.
When Should You Advertise with Amazon Ads?
Before you get started with Amazon Ads, make sure you have set your advertising goals that represent your business’s overall desired objectives. Here are some advertising goals you can achieve with Amazon Ads.
- Reach more customers
Amazon Ads can help you connect with your customers with the right messages at the right time.
- Increase traffic to your store
It helps you drive traffic and increase customer engagement on your website or online store.
- Drive more sales
Amazon Ads offer great insights that can help you achieve data-driven results both on Amazon and third-party platforms.
- Improve customer loyalty
Lastly, it helps you improve customer and brand loyalty. With Amazon Ads, you can ensure that your customers keep coming back to your store and build long-lasting relationships.
Strategy For Amazon Advertising
- Establish Your Objectives Clearly
Whether you want to increase sales or brand recognition, Amazon lets you match your targets with your objectives. To make it easier to determine which Amazon ad product is ideal for you to achieve your goals, Amazon has divided its product page into “Objectives,” where businesses can choose and set their respective targets.
- Select the Right Products to Promote
You have the best chance of making sales by promoting your most well-liked products. Additionally, you need to confirm that these goods are available and reasonably priced. It is better to promote a hot-selling product than something that is struggling to fly off the shelves.
- Create Attractive, Short, and Clear Product Detail Pages
Consider using clear and detailed titles, high-resolution photos, and helpful product information when creating a product detail page. Shoppers may be lured to your product detail pages by Amazon ads, but it is the product detail page that will finally convert them into paying customers.
- Decide Where to Post Your Advertisements
Amazon offers a range of options within its complete advertising portfolio. For example, you may build voice ads to play on Alexa-enabled devices, stream videos on Fire TV or Amazon-only websites like IMBD, or display ads to draw Amazon customers to your business. Businesses can also post advertisements on social media if they gather traction from those platforms.
- Try Sponsored Brands as Opposed to Sponsored Products
A sponsored brand post showcases a handful of your goods or services and is most effective for businesses looking to raise their profile across their entire line of goods. Contrarily, a sponsored product post is a cost-per-click (CPC) advertisement highlighting specific product listings on Amazon. This is preferrable if your goal is to increase sales of a particular product.
- Targeting by Category
Amazon has intelligent marketing tools to assist you in placing your products next to highly regarded or slightly related items. Using product attribute targeting, you can display advertisements to customers who have shown interest in other similar products.
How to Get Started with Amazon Ads?
You must be a registered seller or vendor selling products on the Amazon store to advertise with Amazon Ads. However, it’s possible that you may be relatively new to Amazon Ads. In that case, you can start with sponsored ads. You can set up sponsored ads easily. Moreover, you can work with sponsored ads with a wide range of budgets. The best part about these sponsored ads is that they adopt the cost-per-click model where you only pay when a shopper clicks on your ad. Totally cost-effective, isn’t it? At the time of creating sponsored ad campaigns, you can choose the amount you want to bid for a click, in addition to choosing your own budget.
Summary
Digital ad spending on marketplaces is driven by the ever-expanding eCommerce sector and growing competition. Amazon’s advertising business is expanding quickly, especially now that it has diversified its ad products throughout its ecosystem. Amazon advertising has potential and difficulties. Vendors require a comprehensive and adaptable advertising approach. They must continue to be versatile in the ever-changing business environment.
