Amazon Advertising
Running advertisements on Amazon is a no brainer. Not only is it a great way to reach shoppers looking for similar products, but it is a great way to create brand awareness. It’s like printing money, assuming you know what to do. This blog will serve as an introduction to the benefits of Amazon Advertising.
Types of campaigns
There are so many types of advertisements you can set up on Amazon. There are advertisements you can set up to highlight specific products, as well as advertisements you can set up to highlight your brand as a whole. Here are the popular types of advertisements you can choose from:
Sponsored Products: the type of advertisement where your individual product listing will appear in search results and on other product detail pages.
Sponsored Brands: the type of advertisement where your brand will appear in search results. There are many ways to customize this. Most commonly, brands will create a banner featuring their logo, name, and top three products.
Sponsored Display: these advertisements are more customizable. Often, brands will use a video combined with a listing or two for these ads. This type of advertisement will appear in search results.
Audio Ads: these advertisements, while not necessarily applicable to all industries, are a great way to reach customers who are listening to music on Amazon music or using Amazon Echo devices.
KPIs
Amazon Advertising offers an extensive amount of insight into how to improve your existing ads. However, because there is so much information, it can be tricky to discover how to improve your ad’s reach and spend. Below are the KPIs to keep in mind, especially when starting out in the Amazon Advertising space:
Spend: Ensuring your ads are spending the right amount can be tricky. Obviously, you want your ad spend to be less than sales from ads. Adjusting your bids, setting an ad budget, and checking your ads often will ensure that spending doesn’t go through the roof. You should prioritize fine-tuning your ads based on how much they are spending as well as ACOs. If they are spending more, and not resulting in sales, things can get out of control if left unchecked.
Sales: Not much needs to be said when it comes to sales. Naturally, you want this number to be as high as it possibly can be, while not at the expense of increasing ad spend, ACOS, and CPCs. Essentially, running a successful advertising campaign revolves around making sure every KPI is where it should be in relation to others.
Acos: When examining whether or not your ads are where they should be in terms of spend vs. sales, you should be paying attention to the Advertising Cost of Sale (ACOS). Ideally, you want this as low as possible, as it means you are getting the highest return (sales) from minimal input (spend). To know whether or not your ACOS is on track, you need to understand your profit margin. Say you sell a product for $100, and the all-in cost to make and sell your product is $40. Your profit margin is 60%, and your ACOS should be 60% or lower in order for your ad to be profitable.
CPC: CPC, or Cost Per Click, is the amount of money you pay each time someone clicks on your ad. Ideally, you want CPC to be low, as it is the total ad spend divided by the number of clicks your ad gets. Luckily, many ads are strictly CPC ads, so you only will pay money if your ad is clicked on. If you are not receiving clicks, consider adding more keywords to your ad campaign.
Bid: This is the amount of money you are willing to pay to have potential consumers engage with your ad. For example, if you sell phone cases, and one of the keywords you are bidding on is “phone cases for iphone”, the bid would be how much money spent on that specific keyword. Checking your bids often will ensure success in Amazon advertising.
The above is merely a glimpse inside the word of Amazon Advertising. There are many elements that vary based on your specific business goals. Luckily, if you are interested in learning more about Amazon Advertising and how it fits into your business strategy, Helm & Stern Branding is here to help. Fill out our contact form to discover how to grow your brand on Amazon through Amazon Advertising.