The Orca Pacific Blog
Amazon Advertising Strategies: FAQ’s for Sellers
Article by: Lauren Stair
In the world of eCommerce, advertising is crucial for reaching potential customers and driving sales growth. Amazon Advertising is one of the most effective ways to advertise products and increase visibility on the platform. However, with so many different campaign types to choose from, it can be overwhelming to decide which one is right for your business. In this article, we will answer top questions around various types of Amazon Advertising campaigns and provide tips for budgeting, competing with other advertisers, and targeting specific customer segments to increase customer lifetime value.
Get answers to the top questions asked regarding Amazon advertising, including:
- What are the different types of Amazon advertising campaigns, and which one should I use?
- How much should I budget for Amazon advertising?
- How can I compete with other advertisers on Amazon?
- How can I use Amazon advertising to target specific customer segments and increase customer lifetime value?
- How can I measure the impact of my Amazon advertising on overall sales and profitability?
- How can I use Amazon advertising to drive sales during seasonal or promotional events?
- How can I use Amazon advertising to optimize my product pricing and maximize profitability?
- How can I use Amazon advertising in conjunction with other marketing channels for a cohesive overall strategy?
There are many different types of Amazon Advertising campaigns and it is important to remember that there is no one-size-fits-all solution. Your advertising strategy should align with your overall business goals and target audience. We recommend asking the following questions when choosing the type of campaign:
What is my advertising objective? (i.e., brand awareness, revenue, etc.)
Who is my target audience?
What is my total budget?
Which advertising format would best suit my products?
The most common types of Amazon advertising campaigns are:
Sponsored Products: Sponsored Products ads are keyword-targeted ads that appear within Amazon search results and on product detail pages. These ads are a great way to increase visibility for your products and drive sales.
Sponsored Brand Video: Sponsored Brand video ads are also keyword-targeted ads, but allow brands to showcase products through video ads. These ads appear within the search results pages and can help increase brand awareness and consideration.
Sponsored Display: Sponsored Display ads are display ads that appear on and off Amazon. These ads use audience and product targeting to reach shoppers who are browsing related products or interests. These ads can help drive new customer acquisition and product discovery.
Amazon DSP campaigns: Amazon DSP, or demand-side platform, is an advertising platform that allows advertisers to programmatically buy display and video ads across Amazon-owned sites and apps, as well as third-party sites and apps. Amazon DSP offers a range of campaign types to choose from, including retargeting, prospecting, and brand awareness campaigns.
Your advertising budget will depend on a variety of factors, including your business goals, competition, and product category. As a general rule, mature brands should aim to spend at least 5-10% of your total revenue on advertising. However, it’s important to regularly review your advertising performance and adjust your budget accordingly.
Here are some key strategies for budgeting for Amazon advertising:
Set clear goals: Before you start advertising, define your goals and determine how much you’re willing to spend to achieve them. This will help you stay focused and avoid overspending.
Monitor your campaigns regularly: Keep a close eye on your advertising campaigns to ensure that you’re seeing results across your KPI’s. If a campaign isn’t performing well, consider adjusting your budget or targeting to improve performance.
Test and optimize your campaigns: Experiment with different targeting, bidding, and ad creative strategies to see what works best for your business.
Determining your advertising budget can be a challenging task. You don’t want to overspend, but you also don’t want to miss out on potential sales by not investing enough. Consider these factors when you are planning your media spend:
What is your overall marketing budget?
How much do you currently spend on Amazon advertising?
What are your key performance indicators?
How competitive is your industry and product niche?
What are your advertising goals?
How much are you investing into advertising as a percentage of your total Amazon sales?
How much of your sales are ad attributed versus organic?
Competing with other advertisers on Amazon can be tough, but there are effective strategies you can use to stand out from the crowd. Here are some tips that our experts recommend if you want to stand out from your competition:
Use high-quality product images and descriptions: Your product images and descriptions can make a big difference in how well your products perform on Amazon. Be sure to use high-quality images and detailed, accurate descriptions that highlight the features and benefits of your products.
Target the right keywords: To compete effectively on Amazon, you need to target the right keywords. Use Amazon’s keyword research tools to identify relevant keywords and incorporate them into your ad campaigns.
Monitor your competitors: Keep an eye on your competitors’ pricing, product offerings, and advertising strategies. This can help you identify areas where you can differentiate your brand and stand out from the competition.
Test and optimize your campaigns: As with budgeting, testing and optimizing your campaigns is critical to competing effectively on Amazon. Experiment with different targeting, bidding, and ad creative strategies to see what works best for your business.
Ensure your brand is consistent across all platforms: We will dive into this topic later on, but it is important to mention that having consistency with your brand across every marketing platform will enable customers to have the confidence to shop with your brand over competitors.
Monitor your share of voice: One of the most important things we recommend is keeping a close eye on your share of voice within your category. This means monitoring your presence in both paid and organic placements to make sure you are gaining ground against your competitors.
Utilize dayparting: You can utilize dayparting to ensure your campaign budgets last longer throughout the day when your competitors may be out of budget. Additionally, you can increase your bids during the highest converting hours for your target customer.
Competing with other advertisers is a multi-faceted approach that should include tactics outside of just advertising. The only way to beat competition is to meet your customers at every stage of the customer journey on Amazon. That includes optimizing product listings, building brand awareness, pricing your products competitively and leveraging your loyal customer base for reviews.
Amazon Advertising offers several audience targeting options to help sellers meet their goals through specific customer segments, including:
Demographic targeting for sellers to target customers based on factors such as age, gender, and household income.
Interest targeting so sellers can reach customers who have shown interest in specific categories, brands, or products on Amazon.
Retargeting for sellers to target customers based on their shopping behavior on Amazon, such as products they’ve viewed or purchased in the past.
Life event targeting which offers targeting options based on life events, such as weddings, graduations, or new baby arrivals.
Behavioral targeting to target customers who have previously engaged with their products on Amazon, such as recently browsed products within a sub-category.
Leveraging customer segments in your advertising campaigns, will enable you to create more targeted, effective campaigns that drive engagement and conversions. By understanding your customers with granular audience-data and tailoring your messaging to their needs and interests, you will encourage repeat purchases and referral business which will increase your customer lifetime value on the platform.
1. Use Amazon’s audience targeting options to segment customers based on demographics, behaviors, and purchase history.
2. Create targeted ad campaigns that speak to each audience segment’s unique needs and preferences.
3. Test different ad copy and creative for each audience segment to maximize engagement and conversions.
4. Utilize Amazon’s reporting and analytics tools to track and measure the impact of each ad campaign on customer lifetime value.
In order to accurately measure the impact of your Amazon Advertising, it is important to start by creating a solid roadmap for your brand to follow. This can be done by setting clear goals and key performance indicators for your advertising campaigns, such as cost-per-acquisition (CPA) or advertising spend / total sales (TACoS). Utilize reporting and analytics tools to track and measure performance against these goals over time, identifying areas for optimization and maximizing overall sales and profitability.
To take it a step further, it is helpful to understand the customer journey on Amazon and how your brand’s advertising can reach your audience at every stage. By understanding where your customers are at in the journey and what their needs are at each stage, you can create highly-targeted advertising campaigns that drive engagement and conversions. With each stage in mind, you can use different types of advertising to cater to these audience needs:
For example, you can:
Awareness – use Sponsored Brand Ads to introduce your product or brand to new customers.
Consideration – use Sponsored Product Ads to showcase specific products and features.
Purchase – use Display Ads to target customers who have already shown an interest in your products.
Loyalty – incentives repeat purchases and reward your loyal customers, by using exclusive offers and discounts.
1. Set clear goals and key performance indicators (KPIs) for each advertising campaign, such as ROAS or CPA.
2. Use Amazon’s reporting and analytics tools to track and measure performance against these goals.
3. Identify areas for optimization, such as targeting or bidding adjustments, to improve performance and maximize profitability.
Seasonal and promotional events are significant drivers of sales across Amazon. You can utilize advertising strategically during these high-demand periods to increase your visibility and sales on the platform.
These events often result in increased competition and traffic, making advertising essential for your brand to stand out from the crowd. By leveraging Amazon advertising, you can increase visibility, capture the attention of shoppers, and grow your audience lists.
Limited-time offers are also a common strategy during these events, and Amazon advertising can help promote these offers and create a sense of urgency. It is important to be strategic about developing a promotional plan as there are various Amazon promotions to choose from. Check out our post on Amazon seller tips for holidays to find out more on competitive promotional strategies.
1. Plan ahead for seasonal or promotional events by creating dedicated ad campaigns that align with the event’s theme and messaging.
2. Utilize Amazon’s promotional tools, such as lightning deals or sponsored placements on event-specific pages, to maximize visibility and drive sales.
3. Monitor performance closely during these events and make adjustments in real-time to maximize ROI.
Amazon advertising can be a powerful tool for optimizing product pricing and maximizing profitability. One effective strategy is to use Sponsored Products ads to test different price points and monitor the resulting click-through rates and conversion rates. This can help identify the optimal price point that maximizes both sales and profitability. Additionally, using Sponsored Brands ads to promote products with higher profit margins can help increase overall profitability.
To identify complementary or higher-priced products that are most likely to resonate with customers, you can use the “Frequently Bought Together” and “Customers Who Bought This Also Bought” features. These features can help identify products that are commonly purchased together or have high cross-selling potential. You can then use this information to target customers with Sponsored Display ads that promote these complementary or higher-priced products.
Sponsored Display ads can also be used to target customers who have viewed or purchased related products. This can be done by using product targeting or audience targeting. With product targeting, you can target customers who have viewed or purchased specific products that are complementary or higher-priced. With audience targeting, you can target customers who have demonstrated an interest in related products or categories. By targeting these customers with Sponsored Display ads, you can increase the visibility of their products and drive more sales.
1. Utilize Amazon’s cross-selling and upselling features, such as Sponsored Products or Sponsored Brands, to promote complementary or higher-priced products.
2. Identify complementary or higher-priced products that are most likely to resonate with customers based on purchase history or browsing behavior.
3. Use Amazon’s Sponsored Display ads to target customers who have viewed or purchased related products.
4. Test different ad copy and creative to find the most effective messaging for cross-selling and upselling.
Utilizing Amazon advertising alongside other channels such as social media, email marketing, influencer marketing, etc. is crucial in creating a comprehensive marketing strategy to reach your revenue goals.
Using consistent messaging and branding across channels helps create a unified brand identity and improve brand recognition. Using Amazon advertising to drive traffic to your website or social media channels is a great way to support other channels. Leveraging data from Amazon advertising, as well as other marketing channels, helps gain insights into your customers’ behavior and preferences. This allows for better targeting of advertising and tailoring of messaging to specific customer segments.
Retargeting campaigns in Amazon advertising can help reinforce messaging to customers who have interacted with the brand on other channels, such as social media or email marketing. Testing and optimizing campaigns across all channels helps determine what works best for the brand and allows for refining of messaging, targeting, and overall strategy based on the data gathered.
Additionally, with Amazon Attribution, you can create Amazon Attribution tags to track the Amazon metrics (clicks, detail page views, add to carts, purchases, etc.) for any marketing done outside of Amazon that is being driven back to your store. This can then be analyzed to determine which source is the most successful for driving conversions or traffic on Amazon.
1. Align your Amazon advertising strategy with your overall marketing goals and track performance across different channels.
2. Utilize cross-channel promotions and messaging to create a cohesive overall strategy that maximizes overall business performance.
3. Use Amazon’s reporting and analytics tools (such as Amazon Attribution) to monitor performance across different channels and identify opportunities for optimization.
4. Test different ad copy and creative across different channels to find the most effective messaging for each audience segment.
Did we answer all of your questions? If not, we’d love to hear from you!
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