MASTER AMAZON’S PLATFORM

The Orca Pacific Blog

Amazon Advertising Explained

Article by: Orca Pacific

Due to Amazon’s continued success, sellers and vendors must actively optimize their advertising strategy to keep up with the competition and demand. At Orca Pacific, we work with our clients to mitigate challenges they face and optimize their advertising strategies to outrank competitors, increase sales, and reduce ACoS. 

In 2018, Amazon Advertising was launched as a unified solution for sellers to combat the high level of competition on the marketplace. This works similarly to PPC Ads on Google where sellers pay when shoppers click on ads, regardless of whether or not the shopper buys the product. Amazon PPC allows sellers and vendors to create ad campaigns to acquire more visibility, bid for top ad positions, and increase overall revenue. 

Why Advertise on Amazon? 

To drive incremental sales, maintain market share, and spin Amazon’s flywheel, Amazon sellers and vendors must invest in advertising. More product searches begin on Amazon than any other search engine, including twice as much as Google. This goes hand in hand with Amazon being the #1 destination for online shopping, with more than 150 million Prime Members in the United States. 

Over $31.2 billion was spent on Amazon Advertising in 2021 and is continuing to grow in 2022. To help Amazon sellers and vendors stay competitive, the Orca Pacific team strategically implements different variations of Sponsored Product Ads, Sponsored Brand Ads, Sponsored Display Ads, and Amazon DSP. The goal should be to be on the first page of search results as more than 70% of Amazon shoppers do not click past the first page and 35% of Amazon shoppers click on the first product featured on the search results page.

Four Ad Types on Amazon

Sponsored Brand Ads
Another form of PPC advertising, Sponsored Brand Ads are keyword-targeted banner ads that appear at the very top of the search results page. Also known as headline search ads, these ads feature three different products, the brand logo, and up to 50 characters in the text/copy, redirecting shoppers to the featured Product Display Page or to the Brand Store. 

Sponsored Brands Video was launched in early 2020 which allows brands to create video ads that appear in the search results. 

Examples: 

Sponsored Display Ads
These fast-acting ads appears on Product Display Pages based on the targeting options selected and are used for both offensive and defensive targeting, along with cross-selling opportunities. This is great for converting “window shoppers” to buyers. One key advantage is that sellers can retarget shoppers who have yet to make a purchase after viewing the Product Detail Page. Retargeting shoppers keeps the product at the top of their mind and increases the likelihood of making a sale. 

Example: 

Sponsored Product Ads
These keyword-targeted ads appear in-line with other organic search results and across a variety of other sponsored widgets and placements on Product Detail Pages, promoting a single product. One key benefit of these ads is that while many customers may see the ad, the brand is only charged for those that click on it. These type of ads blend in with the rest of the search results, providing customers with the idea that the product is popular and useful rather than being a paid advertisement. The goal is to drive conversion with a focus on keywords and product level relevance growth. 

Two types of Sponsored Product campaigns to be aware of are automatic and manual targeting. Automatic allows sellers to name their budget then Amazon will do the work behind scenes, great for those just starting out with PPC ads and useful for identifying relevant keywords. Manual requires sellers to choose their own keywords and is best for those experienced with PPC. 

Example:

Amazon DSP
This Demand Side Platform allows advertisers to proactively reach highly-qualified, targeted audiences with display and video ads on and off Amazon. Sellers and vendors can programmatically buy ads to reach audiences on and off of Amazon. It can be used to drive traffic off the Amazon platform and onto the brand’s website.

While this allows advertisers to have a granular targeting option, it comes with a big catch: a $35,000 campaign budget in order to use them. Working with an Amazon Preferred Partner, like Orca Pacific, sellers and vendors can bypass this campaign budget requirement. 

Strategies to Optimize Your Ads on Amazon

Campaign optimization refers to steps taken to improve advertising campaign performance by aligning the structure of campaigns with the product portfolio, the usage of automatic and manual campaigns, and making strategic decisions on keyword choices. The more the product appears organically on the search results page, the more impressions the product gets. Using a combination of relevant keywords, detailed product descriptions, and high-quality product images, sellers and vendors can rank higher in search results. 

A clear and high-quality photo is another important feature for ad optimization because it increases the brand value and allows the product to speak by its pictures. Shooting professionally with a high-resolution camera while making the photo realistic will make the product listing more attractive. 

Keywords 

There are four types of Amazon keywords to choose from: broad keywords, phrase keywords, exact keywords, and negative keywords. Adding negative keywords can reduce wasted ad spend and improve ROAS without damaging the outcomes. Using the right keywords will optimize the product listing and reduce wasted ad spend. Long-tail keywords are longer keyword phrases that are targeted and specific, though it can be difficult to identify these keywords. 

Knowing how and why to organize your ad groups can help tremendously – your ad groups should include one main keyword followed with general keywords in the same product category. To reach a broader audience, optimize the product listing titles with the same keywords as the ad campaigns. Last but not least, test new keywords often and set higher bids to quickly generate data to analyze.

Customer Feedback and Reviews

To increase brand loyalty and trust, consider adding value to a product by generating customer insights. On average, shoppers will read at least ten product reviews before making a purchase. Back in October 2016, Amazon prohibited incentivized reviews, though these reviews can still be facilitated strictly through the Amazon Vine program. 

Final Thoughts

It might take some time to see campaign results but avoid making optimization decisions until the results have been analyzed. Some KPIs to track are impressions, ROAS, ACoS, total sales revenue, and more. Consider setting a budget cap to avoid overspending. Once results have been analyzed, utilizing the A/B testing approach to change one variable at a time will confirm whether the changes are successful or not. 

Formulating and optimizing an ad campaign takes time, patience, constant testing, and strategy. Whether you’re new to advertising on Amazon or a seasoned seller/vendor, the team at Orca Pacific can help. Our proprietary software provides insights on advertising performance, competitor analysis, sales trends, and more!

Schedule a free consultation with one of our Amazon Ads Specialists below.

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