Amazon Advertising

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Amazon Advertising

In its growing e-commerce dominance, Amazon has quickly become a pay-to-play platform. With above-the-fold search results often displaying nothing but advertised products, Amazon advertising has become a must for any brand wanting to launch or grow on the Amazon platform.

With decades of combined Amazon PPC Agency experience, our qualified team understands the critical impact advertising can have in order for brands and sellers to achieve profitable growth. Using fundamental strategies, industry best practices and proprietary technology, the Avenue7Media team is able to help quality brands establish themselves as market leaders in their Amazon category.

With the ever-changing Amazon Advertising platform, the continual release of new ad types and the constantly changing landscape, our team is equipped to help your brand through sophisticated advertising strategies designed to help you grow, so that you can focus on building your brand and establishing new product lines. Fill out the form below to learn how we can help you in your Amazon journey towards profitable growth.

Amazon is currently the 3rd fastest growing digital advertising platform and is trending to surpass Facebook to take the number 2 spot behind Google. In 2022, Amazon did $12.75 billion in advertising revenue and many brands are allocating more of their advertising budgets to the platform. Advertising plays a critical role for a brand’s sales on Amazon and typically accounts for anywhere between 30% and 50% of a brands total sales.

In addition, campaigns are part of the Amazon flywheel and play into the A9 search algorithm that impacts a products organic rank within the platform. If a customer searches for a specific term and your sponsored product listing shows up and the customer clicks on it and buys it, it will cause your product to increase in the organic ranking for that keyword over time. 

Based on proprietary brand research by Feedvisor, 74% of brands on Amazon are leverage advertising for new customer acquisition while only 50% of all brands are actually running campaigns. This will continue to increase significantly in the coming years. In addition, 50% of Amazon customers aren’t even aware of sponsored product listings, so they don’t differentiate paid ads and organic results at the top of the search results page. Lastly, 74% of Amazon customers don’t search for brand names which means including generic terms in your listings and advertising can make a critical impact on the scale and effectiveness of your campaigns.

Amazon PPC Strategy

There are several benefits and uses of campaigns and your goals will dictate the strategy that will work best for you.

1) Protect Your Brand

The first and most important is actually brand protection. If a customer searches for your brand it’s important that they see your product and not the ads of a competitor who’s attempting to steal sales and gain market share. This is also important when training the Amazon algorithm to recognize your brand (if Amazon is always suggesting a different search term, assuming that your brand is a typo.)

2) Launch a New Product

The second use of campaigns is to launch a new product. In these cases, you may be spending a significantly higher amount than the initial return on investment in order to get the initial sales velocity going at which point you’ll be able to decrease ad spend once the product has momentum, reviews, and organic sales.

3) Increase Product Sales

You can use campaigns simply to increase sales, typically by targeting additional generic search terms that customers might be using when looking for your product.

4) Increase Organic Rank

While any campaign that drives converting traffic to your listing can generate sales, campaigns can be used specifically to achieve an increase in organic rank, which will in turn lead to increased organic traffic and overall sales.

5) Discover New Keywords

Campaigns also help you discover new keywords that customers are using to find and purchase your products that you may not have realized when doing your initial SEO keyword research.

6) Validate SEO Keywords

Advertising is also helpful to validate the keywords that you’re targeting for your product. In some cases you may discover that the keywords you thought were relevant simply don’t convert for your product or aren’t being used by your target customers. You may also discover new search terms used by customers that are driving sales. These search terms can then be used not only for advertising, but also be strategically integrated into the listing in order to increase organic sales in the ongoing strategy of optimization, launch and analysis.

Amazon Campaign Terminology

Before diving deeper, let’s take a quick look at the most common terms used in Amazon advertising.

ACoS stands for Advertising Cost of Sales. This is the percent of attributed sales spent on advertising and is calculated by dividing the total ad spend by attributed sales. If you spent $20 on advertising, resulting in sales of $100, your ACoS would be 20%. Note that there is no ideal target ACoS as this has more to do with your product margin and your current goals. A product launch would likely incur a higher ACoS than brand protection, so your ACoS goal needs to be set by each seller for your particular strategy.

Ad Group: A sub-category of a Campaign that allows you to group keywords, etc.

Bid: The amount that you, as a seller, are willing to pay in order for a potential customer to click on your product ad. 

Campaign: The 

Clicks: The number of times a potential customer clicks on an ad.

Click Thru Rate (CTR): The ratio of how often a customer clicks on an ad compared to seeing the ad. The click thru rate can be determined by how relevant your product is, as well as things like title, primary image, price, prime status, and the quality and quantity of your product reviews

Cost Per Click (CPC): The average cost you paid per click on one of your ads. 

Impressions: The number of times an ad was displayed to customers. If you’re not getting any impressions, you may need to increase your default bid.

New to Brand: The number of orders and sales of first-time customers for your brand (applies only to brand ads, not sponsored product advertising).

Orders: The number of orders customers placed after clicking on ads.

Roas: Return on Ad Spend, the total ratio of ad spend to advertising revenue.

Spend is the total charges for a product advertising 

Sales is the total revenue generated from product advertising.

TACoS One of the most important definitions, however, is TACoS, which equates to the Total Acquired Cost of Sales. This is your Ad Spend compared to your Gross Revenue (including your organic sales). There are two reasons this is important. First, the attribution window for Amazon advertising is only 7 days for sponsored products (14 days for most brand ads). This means that if a customer clicks an ad and, returns to view the product a few days later, and adds it to their cart but doesn’t check out until 8 days after the initial click, the sale won’t be attributed in the ads console.

The second and most important element of TACoS is how strategic Amazon advertising impacts your product’s organic rank. By bidding heavily on relevant keywords that convert into sales, you can increase your product’s organic rank for that keyword generating dozens or hundreds of sales as a result. This is a crucial component of understanding for a successful brand or seller on Amazon.

Top of Search Impression Share:  The percentage of top-of-search impressions your campaign received out of the total top-of-search impressions it was eligible for.

Start Date / End Date: The start date allows you to specify when you want your campaign to begin, so you can build out a campaign and set a future start date. End date is not recommended unless you are creating specific campaigns that will only run for a limited time such as for a deal, specific holiday etc.

Organizing Your Campaigns

Portfolios

Portfolios are a way to organize campaigns into “Folders” allowing you to quickly and easily see how a group of campaigns are performing as well as to set Portfolio level budgets. How you use Portfolios largely depends on how many products and product lines you have as well as what will give you the best visibility into the different types of campaigns you can run. You can organize Portfolios by product, type of campaign or growth stage as you see fit.

Naming Campaigns and Ad Groups

One of the first things you will need to do is create standard naming conventions. This helps increase visibility and scalability and will make it easier for you to organize and optimize your advertising as well as see what’s working quickly and easily.

The first thing you need to do is decide how you’re going to identify your products. Depending on the number of products you sell, you can use the product SKU, the ASIN or an internal short name that makes sense.

Next, you can include the campaign type, with some basic abbreviations such as SPA if it’s a sponsored product auto campaign, or SBV if it’s a sponsored brand video. Next, you will want to include the keyword or category that you’re targeting, such as branded terms, competitor terms or a keyword representing the category of search terms that you’re targeting in that campaign.

Remember, there is no right or wrong way to name your campaigns, rather it’s about finding a system that works for you.

Amazon Advertising Campaign Budgets

Amazon Campaign Level Budget

Amazon allows you to set a daily budget for each of the campaigns that you create. If Amazon uses less than your current budget in any given day, that amount can be used to increase your daily budget by up to 10% during other days in the calendar month. To set your campaign budget, you need to consider a few things. The first is how much you’re willing and able to spend. Remember that just because you set a budget for $50 a day doesn’t mean that you’re going to spend $50 per day. The spend depends more on the search volume of the keywords and the individual keyword bids within the campaign.

The second thing to remember is that depending on how a campaign performs, you can always increase or decrease the budget later. Amazon will show you a notice when you have a campaign out of budget so that you can decide whether or not you wish to increase it based on its performance. The next thing that will determine your budget is the level of aggressiveness with which you want to pursue sales. For example, you may want to set a high budget for your branded campaigns in order to protect your brand from competitors, but you may want to set a lower budget for campaigns targeting competitors to avoid excessive spend for keywords with a much higher ACoS.

Amazon Daily Budget Cap

The primary thing to consider is understanding what your overall spend and sales need to be in order to achieve sustainability. It is recommended that you set your budget at the campaign level and never set a daily budget cap in the advertising settings, which will automatically pause all of your campaigns when the daily budget is reached, including your most profitable campaigns, branded campaigns, etc.

Amazon Portfolio Budgets

You can also set a budget cap at the Portfolio level if that makes more sense for your brand. This can be a set budget for a specific timeframe, or you can set a recurring monthly budget for a fixed or indefinite period of time.

How Amazon Advertising Works

Understanding Second Price Auction

To get a handle on how Amazon Advertising works, let’s take a minute to understand second price auction. In Amazon advertising, you set a bid for keywords in your campaigns. Just like a real auction, the bid is the amount that you’re willing to pay, in this case $3.50. Competitors will also set a bid for similar keywords for their products, in this case $2.75. While there are many aspects that can determine who wins a bid, such as keyword relevance to the product, conversion history and match type, if you bid higher, you will typically win the auction.

Remember that you only pay when a customer actually clicks on your ad, not when they are simply shown the ad. Instead of paying the price that you bid, you actually pay the price of the second highest bid, in this case the $2.75 bid by your competitor. Remember when viewing campaigns in your dashboard that clicks and spend are shown and deducted on your account immediately, but sales can take up to 7 days to be attributed, since it can take time for a customer to add a product to cart, check out, and have the order go from pending to completed status.

Keyword Match Types

The three-match types that Amazon allows you to use in your campaigns are broad, phrase and exact. Note however that with broad match, you can also use a broad match modifier, by adding a “+” symbol in front of each keyword which can help you get more accurate results.

Broad Match

For broad match, Amazon defines it as including “any variations of the keywords, or related shopping queries”, which is pretty broad. If you target the keywords “boys shoes” it will show in any search that includes not only the keywords “boys” and “shoes” in the search terms in any order, but may also include variations, synonyms and other keywords as well. Campaigns using true broad match can be used for keyword discovery but in many cases, modified broad match is able to achieve more accurate search results.

Modified Broad Match

By adding a + symbol before any or all of the keywords in your target terms, you’re telling Amazon that the customer’s search must include that keyword, and not simply a related shopping keyword or variation. This is called a Broad Match modifier and can be placed either in front of all of the words in your target terms or specific keywords based on your objectives and Amazon’s ability to show your ad for relevant keywords. This can be analyzed by examining customer search terms against your broad match target terms in your advertising reports.

Phrase Match

For Phrase match Amazon will only show your ad for searches that include your keywords in the exact order, with no additional keywords in between them, but may include other keywords before or after your target phrase.

Exact Match

For exact match, it will only show your ad for search terms that include your exact keywords in the exact order.

Use of Plurals in Search Terms

Note that for all match types, customer search terms may include both the plural and singular versions of your keywords, so you don’t need to add both to your campaigns. Bids are typically higher for exact and phrase matches since they tend to be more accurate and convert better, but this may vary in some cases.

Negative Keyword Match Types

You also have the ability to add negative keywords to your campaigns as well. This can be done at the Campaign or Ad Group level and can be useful for reducing wasted ad spend on keywords that are coming up in your broad or phrase matches that are not resulting in sales.

Similar to the keyword match types, you can enter the negative keyword as a phrase or exact match in order to reduce wasted ad spend. There are only a few very specific circumstances where you will actually want to add negative keywords. Instead, by utilizing a proper campaign structure and bid strategy, you can avoid most of the pitfalls of needing to negate excessive keywords by leveraging longer tail keywords in modified broad, phrase, and exact match.

Negative Product Targeting

Lastly, you will find ASIN’s that come up as “customer search terms” in your automatic campaigns.  Note that customers aren’t actually searching ASIN’s, rather your product is being displayed on those product detail pages. For ASIN’s that don’t convert, you can now negate them as negative product targets in order to prevent your product from showing up on those product detail pages.

Types of Amazon Campaigns

There are three primary types of Amazon campaigns that you’ll find in the Amazon Advertising Console.

Amazon Sponsored Products

The first is sponsored products, which is the most popular and typically account for 65% of all advertised sales

Amazon Sponsored Brands

Sponsored Brands requires active Brand Registry enrollment, and allows you to create brand ads that typically have top placement in search results, and also includes video ads and the ability to drive advertising to your Amazon storefront.

Amazon Sponsored Display

Sponsored Display is a type of display advertising that allows your ads to show up on relevant products, in relevant categories both on and off Amazon. In addition, you can retarget customers who have viewed your products or similar products in the past 30 days but have not yet purchased them. Amazon continues to roll out new features of sponsored display including category and audience targeting.

Types of Amazon Campaign Targeting

There are three primary types of Amazon campaigns when it comes to targeting: Keyword targeting, product targeting, and category targeting.

Keyword Targeting

Keyword targeting means that your ad will show up in the search results when a customer searches for a specific search term.

Product Targeting

Product targeting means your ad will show up on the detail page of a specific product or ASIN. This could be one of your own products, a competitor’s product, or even a complimentary product that you are likely to get in front of your target audience.

Expanded Product Targeting

In addition to targeting specific ASIN’s, you can now also choose expanded product targeting which includes additional ASIN’s related to your selected target.

Amazon Sponsored Products Ads

Manual Targeting

Manual Campaigns allow you to target specific keywords for the specific products that you choose. 

Amazon Advertising Automatic Targeting

The first type of sponsored product campaign we’ll discuss is automatic sponsored product ads. The primary use of auto campaigns is to discover new keywords and ASIN’s that you can then target in manual campaigns.

When you create an auto campaign, Amazon will automatically target four different groups of keywords/products:

Close Match

This means that your product will show up for search terms that closely match the keywords in your product title and listing.

Loose Match

This allows your product to show up for terms that loosely match keywords in your listing.

Substitutes

Auto campaigns will also show your product on the detail pages of substitutes, that is, products that are similar to yours.

Complements

Which are products that customers may likely purchase in conjunction with yours.

While your goal is not simply to target the lowest possible ACoS here, you can begin to make some adjustments to the bids for the different target groups depending on how they perform, and in some cases, turn off a specific targeting group if it is altogether unsuccessful at generating any sales.

While you are making an investment in discovering new terms and ASIN’s to advertise on, you still want to do so with some level of overall profitability and avoid excessive wasteful spending. You can also use negative product and keyword targeting in auto campaigns in order to increase efficiency of the auto campaign over time.

Amazon Sponsored Brands Ads

Sponsored Brand Ads 

Amazon Sponsored Brand Ads provide a significant competitive advantage for Brands with Brand Registry by giving you placement at the top of search. Brand Ads typically show up above every other type of advertised or organic placement in search results making it the first thing customers see when searching for a specific term or viewing any specific category on Amazon. You can also highlight multiple products allowing customers to see your best sellers or related products together in an ad.

Sponsored Brand Video Ads

In addition, brands can leverage Video Advertising which typically shows up in the middle of search results, and using a combination of movement and taking up nearly the entire width of the page, provide an incredible opportunity to stop customers from scrolling and feature your product.

Storefront Spotlight

Brand Ads also offer the unique ability to drive traffic either to a group of products or to your Amazon storefront, where you can cross sell products, highlight the features and benefits away from the distraction of numerous competitor products and typically increase the average order value. Lastly, when advertising with brand ads you can now view the percentage of New-to-Brand orders, allowing you to see exactly how effective your marketing is to acquire new customers and not simply retarget existing ones.

Sponsored Display Ads

Prominent Placement Display Ads

Sponsored Display ads offer prominent placement on competitor listings, typically below the product features and the buy box. You can target both specific ASIN’s as well as entire categories and then further refine the targeting by brand, price, star rating and whether or not the product is prime eligible. For example, you can target other products in your category that have fewer than 10 stars, and less than a 4 star rating in order to show customers your better rated product. Similarly, you could target more expensive products that aren’t prime eligible, etc, depending on your strategy.

In addition, you can do views remarketing, which means you can show ads to customers who have not purchased a product that matches your criteria, such as viewing your product or a competitors product, to see if they’re still in the market and interested in purchasing. Similar to Product Targeting, Display ads can be used to directly target competitor products, target complimentary products, as well as cross-sell your own products. Sponsored Display ads tend to be incredibly effective during peak traffic seasons such as Prime Week, Q4 and other high traffic shopping times.

Campaign Bidding Strategy

Determining Your Starting Advertised Bid

Start by setting your campaign budget, and then selecting your Campaign Bidding Strategy. Dynamic bids allow Amazon to increase or decrease your bids based on the likelihood of a sale. In most cases, “Dynamic Bids – Down Only” is the preferred option to prevent Amazon from over-bidding on keywords, but you can also use Exact if you want Amazon to use your exact bids every time without manipulation.

There are two primary methods for determining your starting bid, which both rely heavily on your overall strategy and advertising budget. If you want to be more aggressive in your advertising, your ad spend will initially be much higher, with larger amounts wasted on non-converting or poorly converting keywords, but you’re also more likely to generate sales and discover your better-converting keywords much faster. On the flip side, if you plan to take a more conservative approach or have a limited budget, you can start with lower bids, and then slowly increase them until you begin seeing impressions and clicks. This will take longer to generate sales but will allow you to discover both converting and non-converting keywords with a more profitable approach. If you’re not certain what your starting bid should be, you can always begin with Amazon’s recommended bid and then bid up or down from there.

Note that when you create a new campaign, you can select your Campaign Bidding Strategy which is how Amazon will interpret and adjust your stated bid. We recommend starting with a “Fixed Bid”, which will force Amazon to show your product, especially for the first 2 weeks of advertising, longer if you’re taking a more conservative approach. Once you have data around your keywords, you can then adjust the bidding strategy to “Dynamic Bids Down Only” for campaigns that you want to be more conservative on, or to “Dynamic Bids Up and Down” for campaigns proven to convert at a low ACoS and high conversion rate.

Adding Converting Keywords

Once you have your campaigns running, one of the things you will want to do is to continually add new converting search terms into the appropriate campaigns. For example, if a customer searches for “boys blue basketball shoes” that converts in an auto campaign, you will then want to add that search term, in all match types, into a manual campaign that targets similar generic terms.

Similarly, if someone searches for “basketball kids shoes boys” that converted in a manual campaign for the broad match term “Boys Basketball Shoes”, you will want to add the specific converting term in all match types either back into the original campaign or the most appropriate campaign depending on what makes the most sense.

Not every converting search term is worth adding, especially if it seems unlikely to convert again, such as a typo or misspelling that isn’t likely to be replicated, etc. In the next section we’ll discuss a tool that can help you automate this process saving tons of time and making campaign optimization simpler and easier.

While it can be challenging at first, remember not to allow the complexity of advertising to overwhelm you and prevent you from getting started. The goal is to keep it simple, start the process and continue to learn and advance your strategies over time.

Common Advertising Mistakes to Avoid

Now that we’ve covered lots of good strategy, here’s a quick overview on the top advertising mistakes to avoid. First, avoid aggressively negating keywords. Negating too many keywords, can eventually hinder your ability to show for relevant terms. Instead, focus on bidding on the most relevant long tail terms which will reduce your need to negate keywords in the first place. The only exception to this is negating your brand terms in non-branded auto and manual campaigns which will throw off your ACoS and make your generic campaigns seem more profitable than they really are.

Avoid putting multiple products in an ad group. If you have size variations they can go in the same ad group, but consider only adding your most popular sizes. Colors and flavors should be separated since they have distinct search terms. Avoid putting multiple Ad Groups in a Campaign, and if you want to break out a group of keywords, do it in a separate campaign, not a separate ad group.

Avoid grouping branded, generic and competitor terms together so that you have clear visibility into your ad spend on defensive brand protection, versus new customer acquisition. Next, avoid bidding only on broad and exact, or phrase and exact matches as you will typically be leaving money on the table and unable to bid specifically on the most relevant terms.

 Lastly, we recommend that you avoid taking Amazon Advertising suggestions that are sent via email, which typically recommends terms that are too broad, or violate the principles set forth above. You can however add any relevant recommended keywords Amazon suggests when creating your campaign for the first time. As with anything, you can adapt your advertising strategy to better fit your business model.

Amazon PPC Optimization

Once you have your campaigns up and running, there are a handful of things you’ll need to do in order to optimize them. The first is to increase or decrease your bid on individual keywords based on how they’re performing. If they’re converting well, you can increase the bid, if they’re converting poorly resulting in few or no sales you can decrease the bid.

Second, you can adjust your daily campaign budgets. If you find out that you’re out of budget on profitable revenue-generating campaigns, you can increase the budget to maximize sales. Similarly, you can decrease a budget to put a cap on specific campaigns such as those targeting competitor terms in order to limit your aggressive spending.

Next, if you find that some keywords, regardless of bid, simply do not convert in sales resulting purely in wasted ad spend and the relevance of the term is not positive, then you can pause the keyword altogether. This could be after a certain number of clicks or a set spend amount, but the point is that you’ll need to invest in learning which keywords may convert, in order to avoid pausing all keywords after just a few clicks and sacrificing long-term sales.

If you discover new customer search terms generated from your auto campaigns or broad match keywords, you will want to add these newly converting terms as broad/phrase and exact into a campaign. Having organized campaigns will make it easy to determine if it should go into a branded campaign, generic campaign or competitor campaign, or if it’s an ASIN, product attribute targeting.

Lastly, as you scale your advertising, it often makes sense to break out keywords into separate campaigns based on the types of keywords, top converting keywords, or keywords specifically to impact organic ranking.

The search term report is going to give you a report of all of the keywords and ASIN’s that generated traffic in your campaigns. To get this report you’re going to go to Advertising, Campaign Manager, and Reports. Click “Create” then select the campaign type, choose “search term” for report type, select the reporting period, and click Run Report. This is going to provide you with a full Excel spreadsheet that will show you exactly what keywords are converting and for which products. You can also setup recurring monthly reports so that you can always go back and refer to the reports that Amazon provides you, since their real-time campaign data typically only goes back 60 days.

Diagnosing Campaigns Not Running

If your campaigns have been active for a few days but aren’t generating any traction, the first thing you need to check is the impressions. You can do this by enabling Impressions in the Columns section. If the impressions are low, make sure that the targeted keywords are relevant and also exist in your listing, then increase the bids.

If you’re getting zero impressions, there’s a good chance there’s an issue with the product. Click the Ads section to see if your product is ineligible or has been suspended from advertising. Products are typically ineligible because they’re not winning the buy box, either because you don’t have featured offer eligibility, or because there’s a reseller on the listing selling your product at a lower price.

Amazon prohibits certain products from advertising based on their policy. Amazon may flag products by keyword and suspend them from being advertised. You can view Amazon’s prohibited products by clicking the link in action steps & resources. If you believe the product was flagged in error, you can appeal and ask Amazon to review the product for reinstatement.

If you’re looking for managed services, Avenue7Media is a Verified Amazon Advertising Partner. Starting with exhaustive competitor and SEO keyword research, our Ads team will start with an audit of your existing campaign structure, before mapping out a robust advertising strategy based on your growth goals. Run by industry thought leaders and certified PPC specialists, you can enjoy managed advertising services as you focus on building and growing your brand or business.

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