The Orca Pacific Blog

Coronavirus and Amazon Advertising: Top 7 Tips for Adjusting Your Strategy

John L. Ghiorso

Article by: John L. Ghiorso

Coronavirus and Amazon Advertising

Amazon’s advertising platform operates on predictability. But massive shifts in supply and demand brought about by the coronavirus pandemic have caused unprecedented volatility in the advertising landscape. CPC rates are spiking for emergency supplies and consumables, both of which are being squeezed by various supply challenges, while many “non-essential” brands are bowing out of advertising all-together due to shipment suspensions and delays.

There is no blanket strategy for addressing this volatility. However, that doesn’t mean that brands are helpless. Advertisers should be taking a close look at how they can adjust their strategies to promote congruence with their supply situation, maximize their profits, and capture new opportunities on the platform.

7 Tips For Adjusting Your Amazon Advertising Strategy:

  1. Be realistic about your supply situation. It doesn’t make sense to pay to run out of stock quicker, especially considering the compounded drawback of losing relevance. Evaluate run-rates for each of your products to better understand what your supply can withstand. If you sell products in a “non-essential” category, consider diverting budget to promote products that are supported by programs like Amazon Dropship or Fulfilled-by-Merchant. If you can match demand with increased spend, do so. However, avoid simply increasing ad spend and taking your hands off of the wheel. You would be wrong to think: “everything is the same but up 20%.” This is a time of extreme volatility marked by massive shifts in buying behavior that can require an advertiser to make adjustments on the fly. Keep a close eye on supply, demand, and the activity of your competitors.
  2. If you are in a favorable supply position, consider how much you are willing to spend to increase your share of voice. Though most CPC rates are high right now, they will lower as competitors drop out due to supply challenges. That means new opportunities will open up for brands to cause disruption. Diligently watch search box reports to understand when your window of opportunity arrives. Those willing to increase spend now may find themselves in a more favorable position once things normalize on the platform.
  3. Consider what types of products social distancing might create new demand for. As of last weekend, 1 in 5 Americans have been ordered to stay home. While many are still in the panic stage and are stocking up on disinfectants and consumables, others are looking for ways to work from home, play from home, and overall make themselves feel more comfortable while isolated. So if any products in your catalog have an at-home use case, think about diverting some of your advertising budget to those products. As the panic buying stage wears off, advertisers who anticipated demand for their products can jump out early in their category.
  4. On a similar note, advertisers should adjust their content in anticipation of a bump in at-home demand. If you usually sell binders and folders to businesses in case-packs, consider selling 1 or 2 packs and adjusting your content to highlight the home-office use case. Advertisers can also identify keywords and tactics with ad creatives to lean into use cases that are relevant through messaging. Many product categories can find a way to make these contextual adjustments, the key is to be creative, willing to test, and mindful of the accuracy of your adjustments.
  5. Use Amazon Display Advertising to build an audience while traffic is high. Social distancing and panic buying has increased traffic on Amazon significantly over the last few weeks. Advertisers can capitalize on this massive audience by utilizing Amazon DSP retargeting. By collecting customers on a brand and ASIN level, including those who searched for your brand, viewed products, or made a purchase, advertisers can build and scale valuable audiences that can be utilized when shopper behavior normalizes. With access to double the audience, brands can maximize new product launches and marketing initiatives down the road.
  6. Scrutinize your technology tools, and be willing to make manual adjustments. External and internal tech, from Amazon’s A9 algorithm to a seller’s internal advertising tool, are based around a predictive set of variables. Machine learning is designed to be effective under normal conditions; there’s no telling how volatility will make an impact. If you were driving through a blizzard in a self-driving car, you’d be smart to put both hands on the wheel.
  7. Align your advertising strategy with off-Amazon marketing. If you are running flash sales on your website to drive demand for your products off of Amazon, consider keeping Amazon advertising campaigns on to capitalize on the increased brand awareness and traffic that may end up back on Amazon.
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