This is the third blog in our weekly series on retail media advertising and it provides you with best practices for advertising on Amazon. Missed the first two blogs? Read The Rise of Retail Media and Effective Advertising Strategies to Unlock for Retail Media Success.
Advertising on Amazon
After months of accelerated e-commerce growth, this marketplace giant is playing an even bigger role in consumers’ day-to-day lives.
With Amazon Advertising, your products have a greater chance of being seen by thousands of online shoppers at the moment they’re ready to buy. Consider these statistics:
- In 2021, Amazon generated over $350 billion in sales
- Third-party sellers sold roughly $390 billion in 2021, a 32% increase from the previous year
- In 2022, Amazon US sales are forecasted to be 39.5% of the total retail e-commerce sales
Best Practices for Amazon Advertising
If you’re relatively new to advertising on Amazon, the options can be overwhelming at first. However, the main thing to remember is that diversity is key. By using different ad formats, you can help ensure your products will be seen at various stages of the buying journey — whether people are still browsing for ideas or know exactly what they need.
Successful brands and retailers typically use a mix of all major ad formats available to them:
Sponsored Products: These keyword-targeted, cost-per-click (CPC) ads are designed to promote individual listings and drive traffic to product detail pages. They’re shown to shoppers who are actively searching for terms associated with a particular product, and appear alongside or above organic search results. Because they target keywords associated with your product, Sponsored Products typically give you higher-quality clicks on your listings — and can yield a much higher ROI than many other cost-per-click programs.
Sponsored Brands: Available to third-party retailers enrolled in the Amazon Brand Registry program, Sponsored Brands can help you reach consumers who are browsing but might not yet know what they want to buy. By targeting generic keywords such as “running shoes” or “smartphone case,” you can help drive traffic to your Amazon Store for the full brand experience. These ads are often found above the search results and can be a great way to introduce your product line to shoppers when they’re looking to discover new products and brands.
Sponsored Display Ads: These ads let you target shoppers, both on and off Amazon, who have previously viewed your products. They can be used to deliver highly relevant ads to consumers with certain interests, or to shoppers who are actively viewing specific items. And because these ads are automatically generated from the information on your product detail pages, they’re remarkably easy to set up.
So, what combination of different ad types will yield the best results for your products? It depends — on your products, your categories, your revenue goals and, if you sell on Amazon’s international marketplaces, your target geographic markets.
As you fine-tune your campaigns, use these best practices to find the right mix.
Start small and build
If you’re new to advertising on Amazon, start with some of your more popular products and use them to test what’s working. Once you have a comfortable gauge on ad spend and ROI, expand your strategy.
Test different combinations
Experiment with various combinations of Sponsored Products, Sponsored Brands and Sponsored Display ads to discover what works best. And take advantage of optimization features at your fingertips, such as dynamic bidding and targeting by the Amazon Standard Identification Number (ASIN), to help streamline the process.
Protect against predators
Does a competitor’s product show up when you search for your product? If so, that competitor is bidding on your brand terms. To stop your competitors from distracting your consumers, bid upon any necessary brand-related terms.
Give branded words their own campaigns
Often, sellers will include both branded and non-branded keywords in the same ad campaign. But this practice can lead to overspending since there are huge performance differences between these two types of search terms. Be sure to separate them into their own campaigns to stay in control of your bidding.
Are you looking for help on how to maximize your current Amazon performance?
ChannelAdvisor’s Managed Services team can handle the heavy lifting while supporting you on growing your business according to your goals. Acting like an extension of your team, our professionals combine the strengths of cutting-edge e-commerce technology with the unmatched industry expertise across Marketplaces and Digital Marketing. Contact us today to learn more about how we can help manage your Amazon advertising performance.
Ready to learn about best practices for advertising on eBay? Continue the journey with us and stay tuned for the fourth blog in this series coming next week.