No doubt, Amazon is the largest e-commerce platform and third-largest digital advertiser in the world. Amazon has exhibited remarkable growth, showcasing exceptional momentum and rapid expansion in the advertising industry. This positions Amazon as a strong contender to potentially surpass the current leaders in the near future. Their growth is exponential as their ad business generated $12.06 billion during the third quarter of 2023, which is 26.3% if compared with the third quarter of 2022. While business experts have projected a massive surge before the third quarter of 2024, it's important to understand Amazon's advertising strategies and their benefits.
Amazon ads optimization can seem like a lot of details, but it comes with perfect opportunities to grow your business. It does not matter if you are a small or big business; different ad types can meet your specific needs. The challenge for many is how to leverage the numerous potential opportunities of Amazon advertising optimization.
Hence, this content focuses on the best practices for Amazon advertising. It details basic information about Amazon advertising, its different types, the numerous advantages, and advertising tips for Amazon sellers. It's the perfect content you need to achieve your business goals in 2024. Follow closely.
What's Amazon Advertising?
Amazon Advertising allows sellers to reach their target audience, but the sellers only pay when the audience clicks on the ads (pay per click). Thanks to its hundreds of millions of active customer accounts all across the world; Amazon has a deep knowledge of how shoppers interact with brands and products. As such, Amazon Ads can help businesses reach their audience at every stage of the customer's journey.
Amazon advertising is perfect to drive brand awareness, increase customer loyalty, improve sales, and help customers consider your product. The platform has several tools that provide quality advertising solutions for desired business outcomes. You can also programmatically automate purchasing and management of your ads with Amazon DSP.
Different types of Amazon Advertising
As a global e-commerce market, Amazon has different types of advertising. They include;
Sponsored Products
Sponsored Products are ads that are billed via the cost-per-click (CPC) system. Companies can use them to promote their product listings on Amazon and other websites and apps. It uses advertiser-provided keywords to match products with customers. Also, Sponsored Products ads are ranked based on the advertiser bid, expected click-through rate, and the ad's relevance to the customer's context.
Sponsored Display Ads
Display ads are ads that are created on Amazon using creative content to target the interests of specific target groups. They are suitable for all customers, regardless of whether they sell on Amazon or not. Sponsored Display Ads ads are a way for advertisers to reach and engage their desired audience during their shopping journey.
Sponsored Brand
Sponsored brands are an advertising option on Amazon that allows companies to promote their products and services. The ads are prominently placed and offer various design options to highlight the brand and appeal to potential customers. They appear directly below the search bar, but before the organic search results and sponsored product ads. Companies can choose between different ad formats, including product collections, store spotlights and sponsored brands videos. Billing is based on the pay-per-click model and ads can be served based on keywords, ASINs or categories. Overall, Sponsored Brands offer an effective way to increase the visibility of products on Amazon and target customers directly during their shopping process.
Sponsored Brand Video
You can share your brand message with relevant and unique audiences. Sometimes, people want to see the faces behind your brand and be inspired by the need to patronize your brand. Online video ads and streaming TV ads are expansive ways to share insights about the quality of products or services you produce.
Amazon DSP
Amazon's demand-side platform (ADSP) enables companies to place ads programmatically to reach existing and new target groups. This platform is extremely effective as it brings the ads directly to customers who are highly likely to buy. Ads are not only displayed on the Amazon website, but can also appear across Amazon's entire advertising universe, including Twitch, Gala, Fire TV and more.
Amazon DSP allows companies to target customers based on real purchasing behavior instead of relying on speculative data. This allows for more precise targeting of ads to people who have already shown interest in similar products or are likely to be interested in the advertised products. This alignment with real purchase data helps companies to use their marketing budgets more efficiently and achieve a higher return on their advertising investment.
Why should you optimize your Amazon ads campaigns?
There are several reasons people rely on Amazon business for effective ad campaigns. Expansive inventory, affordable prices, and quick shipping are a few of the top reasons people rely on Amazon for their daily businesses; hence, amazon advertising is profitable and far-reaching if you employ the right optimization strategy.
The need to optimize your Amazon ads campaigns is to drive more quality traffic, improve customer retention, increase sales and revenue, and heighten brand awareness. The truth is that many businesses are optimizing their Amazon advertising campaigns to get these results, too. Hence, it would help if you used the right tips to optimize your campaigns and stay ahead of other brands.
Ten tips for optimizing your Amazon advertising campaigns
Here are ten tips you should consider to optimize your Amazon advertising campaigns for improved results in 2024;
1. Have clear goals for brand awareness
Amazon is the ideal platform if you want to increase your sales. Thanks to the different types of Amazon advertising campaigns, you can benefit from their incredible influence. For example, Sponsored Brand ads have a conversion rate of 18%. However, you should set clear goals before optimizing your ad campaign. What do you want to achieve? While increasing brand awareness is obvious, you should also set other goals that align with your business objectives.
Different ad formats are better suited for different purposes. For example, Sponsored Brand ads are good for increasing brand awareness, while Sponsored Product ads are ideal for product launches. It is important that you set specific goals for each product or advertising campaign. For example, do you want to increase the number of impressions for a new product in a month? Or do you want to improve the click-through rate for a particular ad? By setting clear goals, you can better measure and optimize the success of your advertising campaigns.
2. Use the right ad formats for the right products
To optimize your Amazon advertising campaigns, it is crucial to use the right ad formats for the right products. Each product has its own characteristics and target groups that require different advertising approaches.
By using the right advertising formats in a targeted manner, you can optimally place your advertising message and effectively attract the attention of your target group. This enables you to achieve your advertising goals efficiently and maximize the success of your campaigns. It is therefore important to carefully analyze your products and select the appropriate advertising formats accordingly in order to exploit the full potential of your Amazon advertising strategy.
3. Be strategic with keywords
The use of keywords can determine how successful your campaign will be. As such, Amazon has different match types for keywords, as each type is unique in its results. They include;
- Broad Match Keywords
Broad match allows you to have a wide range of search terms and keywords. It is more suitable for increasing brand awareness and driving traffic.
- Phrase Match Keywords
Phrase match has more precision than broad match, as your ad is for shoppers who use specific phrases. It is a suitable option to target a specific audience.
- Negative Match Keywords
Negative keywords allow you to exclude certain search terms from your ads. It is an appropriate option to avoid showing your ads to shoppers searching for unrelated or irrelevant terms. It is important to set logical negative keywords, for example "iPhone" for Android phone cases, to ensure that your ads are only shown for relevant searches.
- Exact Match Keywords
Exact match keywords are more targeted. You can use the exact keywords to connect with a specific audience. No doubt, you can expect highly qualified leads.
4. Strategically structure your keywords into different campaigns
An effective strategy for managing your Amazon ads is to split your keywords into different campaigns based on their importance and objective. Create separate campaigns for different keyword types such as generic search terms, protect keywords (e.g. brand or product names) and main keywords. This allows you to target your budgets more effectively and tailor your ads to the specific needs of your target group.
5. Limit the number of keywords in your campaigns
In the past, it was common to create campaigns with a large number of keywords - often up to 1000 or more. But this strategy can lead to a scattering of ads and make it difficult to control the campaigns.
Instead of using many keywords, it is advisable to focus on a selective choice. By limiting the number of keywords, you can structure your campaigns better and place more targeted ads. This not only improves performance, but also makes it easier to manage and optimize campaigns.
Remember, quality over quantity. By focusing on relevant and high-quality keywords, you can use your advertising budget more efficiently and achieve better results.
6. Set your target ACOS
The global marketplace is highly competitive, just like the Amazon marketplace. The ACOS (Advertising Cost of Sales) indicates what percentage of your sales you spend on advertising. If you want to make a lot of sales, you should set your ACOS metrics. This way you can have a sustainable budget for advertising to ensure overall efficiency. To calculate your ACOS metrics, use the following formula:
To determine your target ACOS, think about how much profit margin you want to achieve as a percentage. Subtract this percentage from 100 to get your target ACOS. A higher target ACOS means that you are willing to invest a larger portion of your revenue in advertising, which can potentially lead to more traffic.
7. Pay attention to your ad performance
Keep a close eye on your campaign to monitor the performance. Check the ad with the best performance and take action for those not performing well. You can monitor your ad performance using the targeted keywords. Remove keywords with insufficient clicks or conversions to budget properly.
8. Use dynamic bidding strategies
An effective bidding strategy is crucial for the success of your Amazon ads. Amazon offers various bidding strategies to help you optimize your advertising costs and improve the visibility of your ads.
There are different bidding strategies for Sponsored Product Ads (SPA) on Amazon. The first and most basic strategy is fixed bids, where you set the maximum amount you want to pay for a click on your ad.
In addition, Amazon offers dynamic bidding strategies based on customer and competitor behavior. "Dynamic bids - lower only" automatically lowers your bids when the likelihood of a purchase is considered low. This allows you to reduce your spend when a customer is less likely to buy your product.
The "Dynamic bids - increase and decrease" strategy, on the other hand, allows Amazon to increase or decrease your bids depending on the likelihood of a purchase. If the probability of a purchase is high, your bids can be increased to achieve a better positioning of your ad. If the likelihood of a purchase is low, your bids will be lowered accordingly to save costs.
It is important to note that each of these strategies has advantages and disadvantages. Fixed bids offer you greater control over your spend, while dynamic bidding strategies can help you place your ads more effectively and optimize costs. Choosing the right strategy depends on your individual goals, budget and marketing strategy.
In addition to bidding strategies, you can also customize placement bids for specific ad positions on Amazon. This allows you to adjust your bids according to placement and control the visibility of your ads in a targeted manner. For example, you can increase bids for the first search results page or for product detail pages to drive more traffic and conversions.
To maximize the effectiveness of your bidding strategies and placement bids, it is important to test regularly and adjust your strategy as needed. Analyze the performance of your ads and adjust your bids accordingly to achieve the best possible results.
By using the right bidding strategies and placement bids on Amazon and continuously optimizing them, you can improve the performance of your ads and increase your sales.
9. Use videos for complex products
The more complex a product is, the more important it is to give potential customers a clear idea of it. By using videos in your Amazon ads, you can present complex products clearly and convey their functions and benefits. Use the various video formats such as Sponsored Brands Videos (SBV) or Sponsored Display Videos (SDV) to attract the attention of your target group and successfully market your products.
10. Get targeted help for your ad optimization
The entire process of optimizing ads can be overwhelming. From ad creation to monitoring and optimization, it can be a challenging task. It can also be frustrating when ads don't perform well and you're unsure of measures to optimize them. Therefore, you should seek professional support to always know what you can do differently. In this context, BidX is your perfect partner! BidX continuously analyzes the performance of your ads using self-learning algorithms and optimizes them by adjusting bids and keywords. In this way, you increase the profitability of your campaigns and save valuable time and resources.
Time to get started!
You don't want to be left behind. Now is the best time to start maximizing the many benefits of Amazon Ads and achieve your business goals. If you are looking for professional support, BidX as an Amazon Ads Advanced Partner is the best choice.
BidX offers you numerous advantages. Through a hybrid approach that combines AI-driven algorithms with custom rules, your campaigns can be managed precisely according to your wishes, while you retain full control. With BidX, you can not only manage your Amazon PPC ads, but also use the entire advertising network, thanks to the integration with Amazon DSP. This allows you to advertise not only on Amazon, but also on other platforms such as Twitch, Freevee and Prime Video.
BidX develops customized features to meet your individual needs. In addition, BidX ensures high transparency by allowing you to understand and review applied rules and decisions through rule logs. BidX's Amazon Marketing Cloud Dashboard gives you accurate insights into customer behavior and helps you better understand how your marketing efforts are impacting different channels.
With a high level of knowledge transfer and excellent customer support, BidX offers hands-on experience as an Amazon merchant and a deep understanding of the challenges brands face on Amazon. BidX is always available via various channels such as chat, email and phone to answer your queries and assist you with your concerns.
Get in touch with us now and let's move one step closer to your business goals together.
