The Amazon digital marketing space has evolved over the years and Amazon’s advertising options now rival those of industry giants like Google and Facebook.
With total ad spend on Amazon skyrocketing and more businesses recognizing its potential, it’s important to understand how the platform works. In this guide, we’ll break it all down so you can grow your business with Amazon online marketing and advertising.
Amazon Digital Marketing Strategy
Amazon internet marketing involves promoting products and brands on Amazon to drive sales and increase visibility. It’s divided into two main categories: organic and PPC (pay-per-click) advertising.
Organic Amazon marketing focuses on improving search rankings without paying for ad placements. This involves writing compelling listing copy, using eye-catching images, optimizing for keywords, and garnering positive reviews.
Conversely, PPC marketing involves bidding on keywords and paying for sponsored placements within search results and product pages. With PPC, sellers can reach customers who are actively searching and ready to buy by showing your ads on specific keywords or ASINs relevant to their products.
In the following sections, we’ll delve deeper into the world of Amazon PPC advertising, exploring key strategies, best practices, and insider tips to help you optimize your campaigns for profits.
Amazon Marketing Services
Amazon Marketing Services (AMS) are advertising solutions offered by Amazon to help sellers promote their products and brands on the platform. These services include Sponsored Products, Sponsored Brands, and Sponsored Display Ads.
When customers search for products similar to yours, some of the top results will be sponsored posts, which are marked with labels like “sponsored” or “ad”. When a shopper clicks on your ad, you incur a charge, similar to Google PPC.
These spots and many others (which we’ll discuss soon) can be secured by bidding on keywords or ASINs relevant to your products.
If you’re wondering whether investing in Amazon paid digital marketing is worth it – the answer is yes, as long as you sell a tangible product that can be bought online. Here’s why:
Amazon Ads cost 68% less than Google Ads and 44% less than Facebook Ads. Plus compared to the other two, people on Amazon have a higher purchase intent, giving you a higher CVR.
Another reason you should advertise on Amazon is that PPC sales on a keyword increase your chances of ranking for that keyword organically so you get both instant and long-term ROI on your ad spend.
Amazon Digital Advertising and Its ROI
Having worked with over 5000 sellers in the last couple of years, we’ve seen PPC literally turn businesses around. Here are some of the results we’ve gotten with PPC:
$83,715.96 in sales at an 11.77% margin in 3.5 weeks for one of our businesses.
Quadrupled sales from $60k/month to $275k/month for another client.
Added an extra $247,331 in sales for a client using our “waterfall” strategy.
$1k sales to $9k in 3 months for a seller that just started selling on Amazon.
PPC can help your Amazon business grow faster, but it’s not just about setting up campaigns.
These businesses could have gotten these results by themselves but it would have cost them years of learning through trial and error as well as thousands of dollars spent on unprofitable campaigns.
We know because we have been there.
Working with a team of experts who have gotten results for other sellers will help you avoid the frustrations of losing time and money.
Do you want us to help you figure out the best way to use PPC to grow your Amazon business?
Talk to one of our experts for free
How to Start Using Amazon Ads
To set up Amazon ads, there are 3 important things you need to know:
- The type of ad you are creating
- How to do keyword research
- How to bid on keywords profitably
Types of Amazon Ads
Amazon offers different types of ads, such as Sponsored Products, Sponsored Brands, and Sponsored Display. These determine how and where your ads appear.
- Sponsored Products:
These ads promote individual products and are shown on Amazon’s search and product pages. When shoppers click on them, they’re taken to your product’s detail page.
Like the example above, sellers can target the keyword “running shoes for men” or a specific ASIN and bid on it to have their product displayed when shoppers search for it.
Your listing can also be displayed as an alternative to your competitor’s products. This is best for targeting customers on similar listings with lower ratings and higher prices.You should invest around 80% of your ad dollars in SP because it has the highest ROI and it’s more scalable compared to other ad types.
It also provides new sellers with the lowest barrier to entry because it does not require registration in Amazon’s Brand Registry. - Sponsored Brands:
These were formally known as headline search ads. They offer Amazon digital brand advertising by showcasing your logo, a custom headline, and multiple products.
For example, a beauty products seller can use SB ads to drive traffic to their entire catalog along with compelling text, images and videos instead of advertising only their lipstick.
A customer who clicks on their ad will likely buy more products, increasing their AOV and brand loyalty.
You need to be enrolled in Amazon brand registry and have a minimum budget of $1 daily to run SB ads. And like SP ads, you target keywords/ASINs and only pay for clicks.
They are best for sellers who have made a reasonable ROI on SP already and are looking to build authority in their niche by increasing brand awareness. - Sponsored Display:
SD ads usually feature single product images and can be used to reach customers on and off Amazon.
Similar to SB ads, you need to be enrolled in Amazon brand registry to run SD ads. You are also charged on a pay-per-click basis or CPM (you pay for every 1000 impressions your ad gets).
SD ads target customers based on their shopping behavior and they are great for reaching customers who viewed your products or similar ones. They can also target competitor ASINs.
For example, a seller of hiking gear can target shoppers who have viewed their hiking boots listing without buying.
These shoppers get to see display ads of those boots when they’re on Amazon and Amazon-partnered websites. And they’re more likely to return to the seller’s store when they are ready to buy.
How to Do Keyword Research
Keywords are the phrases that you bid on so that your listing shows up when shoppers search for your type of product. For example, if you’re selling a phone case, you might use keywords like “protective phone case” or “iPhone cover.”
Here are three methods to help you find the right keywords:
- Think like a shopper: Imagine you’re looking for a product like yours. What words or phrases would you use to search for it? Make a list of these keywords. You can also check the suggestions that Amazon gives as you start typing in the search bar.
- Use Amazon’s Suggestions: When creating your ad campaign, Amazon suggests keywords that you can bid on. And just like using the search bar, not all the suggested keywords will be relevant to the product you are advertising so you should review the suggestions first.
For example, if you are creating a PPC campaign for a “Hug in a jar” candle, “thank you candle” is not a keyword you should bid on. - Keyword Harvesting: This involves collecting relevant and profitable search terms from previous campaigns. Of all the three methods, it is the most recommended because the keywords have worked in other campaigns.
Here’s how keyword harvesting works:
As your auto campaigns run, Amazon collects data on how your keywords perform. This data includes information on clicks, impressions, and conversions.
After your campaign has run for a while, you can review its data to identify which keywords are driving the most clicks and conversions. These high-performing keywords are stored in your search term reports.
Next, download a summary report and pick out all the terms that have converted at least once.
This method will produce better results than the other two, but it is a time-consuming process, especially when you are running PPC campaigns for multiple ASINs.
This is why experts recommend trustworthy AI automation tools like AiHello.
With AiHello’s keyword harvesting feature, you can automatically extract new keywords from your auto campaigns and insert them directly into manual campaigns without going through the stress of looking through search term reports.
You only need to connect your auto campaigns to the relevant exact, broad, phrase, and ASIN targeting campaigns and decide how many conversions you need on a search term before it’s transferred by the system.
Once you set it up, AIHello will add dozens, or hundreds of new keywords automatically to your manual campaigns each month.
How to Bid On Keywords Profitably
Bids are the price you’re willing to pay for each click your ads get. When it comes to bidding effectively, you have two main options:
Manual Bidding
With this type of bidding, you decide how much you’re willing to pay for each keyword.
There are two common ways to do this: RPC (revenue per click) and rule-based bidding.
Regardless of the strategy you choose, you’ll need to have a target ACoS (Advertising Cost of Sales) in mind for manual bidding to work.
We usually suggest using your current ACoS as your target if you’re trying to grow sales, and if you’re trying to decrease ad costs, we suggest targeting 5% less than your current ACoS.
Here’s how the two manual bidding strategies work:
- RPC Bidding: This involves multiplying your ACoS target with your EPC (earnings per click) to find out what your ideal CPC should be.
For example, let’s say your target ACoS is 35% and you earn $6/click on a keyword. You should be paying $2.1/click to hit your target (0.35 * 6.0). - Rule-Based Bidding: With this method, you set certain rules for your bids. For example, if ACoS is above X amount, decrease bids by Y amount.
This is more difficult to master, especially for beginner sellers, but can be worth it if you think RPC bidding doesn’t work for you.
Automatic Bidding
With automatic bidding, you’re also trying to hit a certain ACoS target.
The major difference is that rather than making changes or coming up with bidding rules yourself, you simply input your target ACoS and the algorithm does all the hard work for you – adjusting your bids daily to achieve the target ACoS.
AI is more accurate than RPC bidding and more straightforward than rule-based bidding because it develops rules that are fit for each account based on its historical data.
This type of bidding is the easiest option for those new to advertising because it requires little to no supervision and ensures that your ads show up for the right keywords at the right time.
The bid changes above were from the AiHello software for a poor-performing keyword.
How to Optimize Amazon Ads
Now that your ads are set up, here are 6 ways you can increase the ROI you get on every dollar invested.
1. Match Type Analysis
When you break down performance by match type, you can understand your numbers better and allocate ad spend to get the highest revenue possible.
To use this strategy, head over to your targeting tab under the campaign manager and filter targets by broad, phrase, and exact match.
Next, compare ACoS, CPC, and CVR to see if there’s any difference that you can use to make effective adjustments.
For example, if the CVR is higher for certain match types, you can spend more on those targets to potentially improve sales or ACoS.
You can also check if there’s any difference between the number of targets in each match type. Usually, having more targets in one match type means you can duplicate some keywords in other match types to get more reach.
2. Increase ACoS Target
While trying to keep your ACoS as low as possible sounds like a good idea, it often leads to lower sales because competitors can easily outbid you.
In the picture above, you can see how sales took off once the seller adopted a higher ACoS target.
3. Dayparting
Some categories have hours and days that perform much better/worse than others. You can adjust bids during these periods to increase sales or lower costs.
With dayparting, you also maximize high-performance periods when your competitors run out of budget because they have ads running all day long.
In the screenshot below, you can see the ACoS (green line) go up on the weekend and sales (orange line) go down. This is an example of when you’d daypart.
To get started, you need to know when you make the most sales. Check business reports to see what hours of the day you sell the most.
You should aggregate 5-20 days’ worth of data for this to make it as accurate as possible.
Once you know your peak and non-peak hours, head over to the campaign manager and select the campaign you’d like to set up dayparting for.
Next, select “budget rules” and add a schedule-based budget rule that maximizes your spending during the high-performance hours you’ve identified. You can also manually pause/unpause your campaigns during peak/non-peak hours.
The major limitation here is that this data is account-level but the individual products have different buying times. It could be possible that some of your products sell best at midnight on weekends and some products sell better at 5 am on Mondays.
The only way you could figure this out is if you went through the sales history of all of your products and analyzed the sales trend.
And even if you find the sales trend, it’s still a pain to go in and set up rule-based automation for your whole catalog. It might work when you have one or two products. But as you grow in size, it’s impossible to daypart properly.
This is why automating dayparting has become an option with several AI tools, including our own.
The AI reads hourly data on a product level from Amazon Marketing Stream and uses that to identify trends in ACoS, Spend, Sales, CPC, and CVR and changes your bids intra-day to get you the best performance automatically.
This means you don’t have to spend hours trying to figure out what time each product performs best or worry about how to set up schedule-based rules that maximize your budget for each ASIN.
4. Ad Spend Segmentation
This Amazon marketing strategy helps you see your losing and winning campaigns so you can take action to improve them. Here’s how to implement it:
Open two tabs on the campaign manager and add a filter for each one. Filter one should be ACoS equal to or greater than the account average and filter two should be ACoS equal to or lower than the account average.
Group 1 = every campaign that’s raising your ACoS
Group 2 = every campaign that’s lowering your ACoS
The first thing you want to do with this data is figure out how much of your spend and sales come from each group. Each group will generally be around 40-60% of sales but usually, the high ACoS group will spend more.
Next, try to find commonalities between the high ACoS campaigns. Are they all the same ad type? Targeting type? Match type? Are they all autos?
Or maybe they’re all for the same ASIN? Or do they all use very broad keywords? And so on.
Here’s a real-life example:
No filter:
Campaigns under 35% ACoS:
Campaigns above 35% ACoS:
5. Adjust Campaigns Based On Seasonality
Seasonality affects most products, but here’s the trick: when demand is low, lower your bids and save that inventory for the days when demand is set to rise.
Here’s an example from a sunglasses ASIN that we sell
During winter, demand for sunglasses fell significantly, so ACoS went up by 21% and sales dropped 50%.
To adjust, we paused our least profitable campaigns, lowered our bids by 25%, and just decreased our sales targets to account for this.
6. Break Down Your Ad Spend
When you break down your ad spend you’re more likely to see where you’re over/under spending and fix it.
You should break down spend by % going into each match type, % going into each ad type, % going into each targeting type, and % going into each ASIN.
To do this manually, follow these steps:
- Go over to the targeting tab under campaign manager.
- Export results and filter them on Excel by match type and targeting type.
- Then head over to the campaign tab to filter campaigns by ad type.
- Check the product report to get ASIN data.
- Fix any imbalance you find.
Here’s how we used this exact strategy to increase our clients’ sales by 27% at a 22% ACoS in 12 days.
Before: 12th Jan – 23rd Jan
After: 24th Jan – 4th Feb
When we onboarded their account, we analyzed their spending and discovered that the majority of their ad dollars were going toward poor-performing ASINs and broad keywords.
We also discovered that only 3 campaigns were active and they were stuffed with more than 30 keywords each. This means both good and bad targets were put together in the same campaign, making optimization difficult.
Separate campaigns with fewer targets were created for each set of relevant keywords to gain better control over ad spend distribution. Dedicated campaigns were created for top-performing search terms too.
In 12 days, their ACoS dropped from 34% to 22% and sales increased from $2.6k to $3.6k. Sales were more consistent too and making optimizations was much simpler.
Other Online Marketing Tactics for Amazon
In addition to Amazon’s advertising options, sellers can leverage other online marketing channels to enhance their brand visibility and drive sales.
- SEO: Optimize your product listings with relevant keywords with high search volume and compelling descriptions to improve visibility in Amazon search results.
Tip: Use tools like keyword research tools like Helium 10 to identify high-volume keywords for your product listings. - Email Marketing: Build a customer email list and leverage it to promote new products, offer discounts, and drive traffic to your Amazon listings.
Tip: Offer incentives such as exclusive discounts or early access to new products to encourage customers to subscribe to your email list.
- Website Optimization: Create a professional website or landing page to improve your online presence and direct traffic from there to your Amazon listings.
Tip: Use clear call-to-action and optimize page loading speed to improve user experience and conversion rates.
- Social Media: Facebook, Instagram, TikTok, and other platforms are great for increasing your customer base and engaging your existing customers.
Tip: Don’t just share links to your Amazon listing; create engaging content that educates your followers about your brand and products.
Wrapping Up:
Marketing on Amazon is a plus for every business that wants to thrive in the ever-evolving world of online retail.
By combining Amazon digital ads with other marketing channels, you can boost your brand visibility, attract more customers, and increase sales exponentially.
