Amazon Advertising Strategies for Fashion Brands and Retailers

Amazon has transitioned from an online bookseller to ”the go-to channel” for anything and everything online. And judging by the features and activities released in the last couple of years, fashion is one of the latest verticals to see a big push by Amazon.

Amazon has also evolved in recent years from a retailer/marketplace to a major player in the advertising space. In September 2018, Amazon became the third-largest digital ad platform in the US. And in 2019, according to e-Marketer, it generated over $14B in ad sales, becoming the fourth major global digital ad seller behind Google, Facebook and Alibaba.

From all of the recent features and activities released by Amazon to grow its fashion category, a few stand out:

• The Drop – Collections designed by influencers that are live for just 30 hours. Each piece is made-on-demand and can be paired with staples (wear-on repeat pieces that build the base of the look) by the Drop.
• Amazon Wardrobe – Prime users have access to this special Amazon feature that enables them to try the items before they buy and benefit from easy returns.
• Pop up stores – Amazon has launched pop-up stores in major cities around the world working with well-known brands such as Pepe Jeans and Calvin Klein.

Amazon’s focus on the fashion segment has encouraged both users to buy more and companies to list a lot more products on the platform. One report from Coresight Research shows that in 2018, from February to September the number of fashion products saw a 27.3% increase. This increase was driven mainly by 3rd party sellers and it shows that the competition is growing, users have more selection and it will become more challenging to stand out.

Before jumping in the strategies, if you are new to Amazon Advertising, check our eBook: Your Ultimate Guide to Amazon Advertising. It will run you through the basics of Amazon Advertising.

1. Product selection strategy

How do you select which products to advertise? You might want to start advertising your full catalog but, when it comes to fashion, it is best to take the decision of what products to advertise on Amazon by analyzing a few key elements:

• Budget: Going for the full catalog with a restrictive budget will just dilute your advertising efforts, and your ads might stop showing in key moments. Prioritize your products based on your budget and the goals you have.
• Margin: ACOS (Average Cost of Sale) varies from the type of ad you use, to the keywords you select to the type of campaign you run. But at the end of the day, advertising will take a percentage out of your margin, and you need to select products that provide a comfortable one.
• Reviews and ratings: When users decide to buy a product, reviews and ratings play a key role. Make sure you advertise products that have at least 3.5 stars. If you still want to advertise products that have a lower star rating, create dedicated campaigns for them in order to allocate budget accordingly.
• Content: The user is not able to touch or feel your products, so make sure the content you are providing helps them buy from you. Advertise products that have at least 3-4 images that showcase the product and optimized product detail pages that entice the user to shop.

2. Campaign Structure Based on Goals and Intent

Campaign structures for fashion can get quite complex if you want to invest budget based on your goals, product type, performance and user intent. When structuring your account, you need to take into consideration: 

• Product performance (top sellers, recently launched, low performers, etc.)
• User intent (discovery searches, visiting a product page, consideration searches, etc.)
• Price and/or margin
• Product category
• Product attributes (size, color, brand, etc.)
• Product type (casual, formal, sport, etc.)

Put them all together and you will realize just how complex your account can get. As an advertiser, however, you need to take into consideration all of these aspects in order to have an account that enables you to invest based on your goals and isn’t wasting money. You might not want to invest in top sellers that have the margin over 30% for discovery searches or gain a piece of the pie of a certain competitor right now, but you might want to later down the road. And if you do, you will have to set it all up instead of just funneling the budget differently for campaigns that are already mature and optimized.

Granularity enables our teams to invest based on the goals that our clients have but also based on the performance that the catalog has and ultimately this leads to spending money on components that work and saving money on components that waste ad spend. At ChannelAdvisor, we rely on our software to effectively and efficiently manage complex and granular campaign structures.

3. Bidding Strategy

There are many ways to create and manage your bidding strategy. But when it comes to fashion, we have discovered a few strategies that enable us to bid in line with performance and make sure there are no opportunities missed due to under-bidding or wasting budget by over-bidding.

Targeting level bidding: Regardless of the targeting type (auto, keywords, ASIN, category), when it comes to bidding, you are able to select one of three options: dynamic bids down, dynamic bids up/down and fixed bids. And if you are going for a granular account structure, bid optimization becomes a time-consuming activity. 

At ChannelAdvisor, we leverage our Automated Bid Manager to create rules that change the bid based on the parameters we want and adjust these rules using our Bidding History reports.

If you’re not able to leverage a tool to help you automate this task, “dynamic bids up and down” seems to be the best version. But you’ll need to invest time to optimize the bids according to performance and market recommendations.

Placement Bidding: Even though the feature was launched last year, it seems to be the least pulled lever in the bidding optimization strategy.

With Placement Bidding, you’re able to add a bid adjustment for Top of Search and Product Pages but not for the Rest of Search. This means that you can easily manage the bid adjustments for the first two but not for the latter. So if your products perform or not on the Rest of Search, the only way to impact it is by reducing or increasing your overall bids at targeting level and then increasing or decreasing the other two accordingly. 

Make it a regular habit to check and optimize placements in order to reflect performance.

Conclusions

Many fashion brands out there are still struggling to get Amazon right. And oftentimes, a brand’s failure comes down to visibility. Achieving visibility for the right intent with the right product can be time-consuming, but it’s not impossible. And you can always rely on a partner to help you with the implementation. Bid in line with performance, advertise the right products, allocate enough budget and optimize the campaigns regularly in order to drive performance.

If you’d like to have one of our digital marketing experts take a look at your ad accounts across Amazon, Facebook and Google and let you know what you’re doing right — and what you could improve upon — request a Complimentary Advertising Analysis today.