In only a few years, Amazon's advertising platform has skyrocketed into the PPC (pay-per-click) world. In fact, the only platforms ahead of Amazon are PPC giants Google and Facebook.
Is advertising on Amazon a good option for your business? How easy or difficult is it to create an ad campaign? What are some pros and cons? Is Amazon advertising the right fit for your business? We will answer these questions and more.
Who Should Consider Advertising On Amazon?
Any business that is currently selling on Amazon, or is considering selling on Amazon, should think about Amazon ads. As is the case with all platforms (and channels), the more mature they become, the more difficult it is to stand out from the crowd. We have seen this with Google Search (and Google Ads), and the same is true with Amazon.
Today, Amazon is saturated with every imaginable product; therefore, it is difficult for a new seller (or a product) to stand out from the crowd. In fact, many established sellers depend on Amazon ads to stay competitive.
What are some notable pros and cons with Amazon ads?
Amazon Advertising - Pros
- You can start small (e.g. $10-$50 daily budget)
- Your product reach will increase dramatically (more shoppers will see your product)
- Your organic Amazon rankings will probably improve
- Cost (some product categories are inexpensive)
Amazon Advertising - Cons
- Your first ad will probably underperform (especially if you are new to PPC advertising)
- Most profitable PPC campaigns need regular optimization, and Amazon is no different
- For most businesses, ads are a temporary endeavor, so the "value add" is usually temporary
- Cost (some product categories can be costly)
Before we go into the most important question "Is Amazon Advertising the right fit for your business?", let us cover some basics, so you understand this advertising opportunity a little better.
What Do Amazon Ads Look Like?
Amazon's PPC ads are subtle, so they easily blend in with organic (non-paid) products/results, and at a glance, most Amazon shoppers will not notice "Sponsored" labels.
Example: (using "iPhone X case" search query)
What Do You Need To Get Started With Amazon Advertising?
Assuming you are selling directly to customers, then you will need an Amazon Seller account. Please note, to create an Amazon seller account you will need the following information:
- Business name
- Business address
- Tax ID
- Contact information
- Credit card
- Phone number Amazon can contact you on
How Configurable Are Ad/Campaign Settings?
Amazon has several advertising options (types); however, we will focus on PPC (pay-per-click) ads because they are the most widely used.
If you have any experience with Google or Facebook ads, these PPC settings will be familiar to you.
- Campaign name
- Duration (start and end dates)
- Daily budget (max daily spend amount)
- Targeting (automatic or manual)
- Default bid (the maximum you are willing to pay for each click)
As you can see, the basic settings are relatively easy to understand and setup. However, most profitable PPC ads require optimization, so be ready to spend time optimizing your product keywords, images, target audience, and so on.
What Kind Of Metrics Can You Track?
The beauty of PPC advertising and digital marketing in general, is the ability to track data and evaluate performance quickly. With Amazon's advertising reports, you will be able to track all critical metrics like:
- Spend (dollar amount you spent on ads)
- Sales (total product sales generated from ads)
- ACoS (advertising cost of sales)
- Impressions (how many times your ad is displayed to amazon shoppers)
- Clicks (how many times did amazon shoppers clicks on your ad)
- CTR (Click-Thru-Rate, what percentage of amazon shoppers clicked on your ad)
- Average CPC (average cost-per-click - how much you are paying for each ad click)
- Conversion Rate (percentage of shoppers you convert into customers)
Is Amazon Advertising Right For Your Business?
As we mentioned earlier in the post, if you are already selling or contemplating selling on Amazon, then you should try Amazon's advertising platform.
Every new advertising channel (e.g. Amazon advertising) is an opportunity for growth. Also, taking advantage of new platforms or channels, while the cost is low, is often the quickest route to bypassing large competitors.
The more popular the platform (or advertising program), the more costly the ads are.
For example, the average cost-per-click on Amazon is certainly not as low as it was (early days), but it is still lower when compared to traditional channels like Google and Facebook - this may change over time, but at the moment, Amazon ads present an opportunity that should be explored.
Furthermore, PPC advertising is often the primary driver of leads for new incumbents entering a crowded category. In other words, if you are trying to sell in a category filled with established brands, then standing out (without using ads) is difficult. This is especially true if you need to generate sales quickly.
Advertising is often the quickest way to stand out and boost sales.
Of course, advertising has some downsides; from the cost of ads, to it's temporary (short-term) nature. However, well planned and executed advertising campaigns can be the difference between a stagnant or a healthy-growing business.
In many ways, Amazon Advertising is no different from other forms of online advertising. If you spend the time to learn the platform and optimize (improve) every subsequent version of the ad, then the opportunities are endless.
There aren't many digital marketing channels that are better at generating sales than a well-oiled PPC campaign.