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Guest Post from Michael Erickson Facchin at Ad Badger.
Even in 2018, there are still some eCommerce sellers who are just now realizing the importance of Amazon advertising or Amazon PPC. There are some pretty good reasons why selling and marketing your product on Amazon can do wonders.
Sellers don’t have to create a brand site to sell products–the customers are already on Amazon. You just have to find a way to get them to your product page. Amazon has 58 billion visitors a month.
Amazon helps you A LOT. Whether it be keyword research, shipping or creating brand trust, Amazon will help you sell your product (mostly because they want to make a profit, too).
Amazon advertising is easier than Google Ads, and the competition is lower. There are less Amazon sellers than brands advertising on Google.
Amazon advertising sometimes has a 10x higher conversion rate than Google Ads. For our users, the average conversion rate is 67 percent, compared to Google’s 1-2 percent.Amazon advertising is a powerhouse. It is unfathomable to know that many brands haven’t realized this yet. However, you’re smart because you’re reading this post and want to get ahead of the competition.
To harness the power of Amazon PPC, you first should know these five tips. Amazon advertising has a lot of parts to it, but I’m going to focus on the very basics of Amazon advertising to get you off on the right foot to start your PPC journey. If you wish to read further, check out this huge post on Amazon PPC.
1. Being a Successful Seller on Amazon Starts at the Product Page
We tell our users this all the time; Amazon advertising won’t be the end all be all for selling your product. It certainly helps increase sales, brand trust and visibility, but the first step you should take is to optimize your product page.
Here’s a good example of a product page. This product has plenty of images, reviews, accurate and bulleted descriptions, a clear product name and size options.
Think of the product page like the landing page. Why would you spend a bunch of time and money driving traffic to your landing page if your landing page wasn’t set up properly for maximum results?
Two keys to creating trust between you and your customer are to provide plenty of images and give detailed information about your product. By giving accurate descriptions of your products, a customer is less likely to give you a bad review for being misleading. Also, set a competitive price point and create a well-thought-out product name that differentiates you from your competitors and motivates customers to click on your product. You should also add bulleted descriptions since Amazon likes those.
Once you generate a good product detail page, you’re ready to start marketing your product.
2. Know How Amazon Ranks Ads
If you’re already an online marketer coming over from Google Ads, you know there are two types of factors that contribute to Amazon ad ranking. Like Google Ads, it’s all about Quality Score.
Here’s a quick infographic to get you up to speed on Amazon ad ranking:
The Amazon Ad Rank formula consists of: Cost-Per-Click (CPC) Bid x Ad Grade = Ad Rank
Metrics that determine ad rank are broken down into two categories:
Like I said before, Amazon PPC is an auction, so ad rank takes into account your bid before ranking you. If your product doesn’t have a good ad grade, you will have to bid higher to rank.
3. Know the Difference Between Organic and Paid Traffic
Organic and paid traffic are similar but different entities on Amazon. The ad ranking infographic above does apply to organic product ranking as well. Paid and organic work together to rank as they are both factors that drive traffic to your product, CTR, conversion rate and sales.
It’s a good question to ask yourself how much money should I put towards ads and how much effort should I put towards organic? The answer is complicated and is based on your brand’s goals, but the best advice I can give is that prioritizing one isn’t abandoning the other. This means that if you try to rank higher organically and don’t put money towards paid traffic, then that’ll just make optimizing for Amazon ads easier when you do decide to start your paid traffic. Prioritizing paid traffic will help your organic ranking by creating more sales, CTR and conversion rate.
I sat down with digital marketing expert Daniel Tejada from Quiverr to explain further:
When you start, most sales will be paid, and then as you grow, more sales will be organic. For an aged, successful product, I normally see 10-40 percent of its revenue coming from paid. For example, if a product sells $1,000 in revenue a day, I could expect 10 to 400 of those revenue dollars coming from paid.
4. Set a Target ACoS
As an advertiser, Advertising Cost Over Sales (ACoS) is what should drive you. While not a complete indicator of ad campaign success, it gives a good idea of how much you’re spending on ads vs. how many sales you’re getting.
ACoS is the percentage of ad spend over your sales. Each campaign in Amazon’s Seller Central has an ACoS, and it’s important to set a target ACoS to decide your spending.
Higher ACoS (above 35 percent) means higher visibility and lower profitability. I compare it to buying a big ad spot in a magazine or television show. While more expensive, it can expand brand awareness and sales.
Lower ACoS (25 percent or lower) means a higher profitability and lower visibility. Sellers instinctually want a lower ACoS to reach maximum profit, but you have to spend money on ads in order to get an ROI from them.
To give a good benchmark, the average ACoS for our users is 30.4 percent.
Before setting a Target ACoS, it’s important to know what your breakeven ACoS is. Everyone’s TACoS should be different. If you have a profit margin of 40 percent and another seller has 10 percent profit margin, you should have a different TACoS.
5. Know Your Amazon PPC Terms
If you’re brand new to Amazon advertising, it’s important to know some terms that you will encounter inside Seller Central.
Pay-Per-Click: Amazon uses PPC ads, which means users bid on search terms to appear. The ad spot for that search term goes to the highest bidder. You pay Amazon how much you bid on a search term every time a customer clicks on your ad.
Conversion Rate: The percentage of clicks to sales you get for your ad.
Impressions: How many times customers have seen your ad.
Clicks: How many times customers have clicked on your ad.
CPC: The amount you are paying for each click on a search term.
Ad Cost: The amount you’re spending on an ad.
Ad Rank: What order your ad appears on the search results page. Amazon uses the A9 search algorithm to rank ads.
Keyword: A general term or a subject you’re trying to rank for. If you’re selling rock climbing shoes, your keyword will be “rock climbing shoes,” but that doesn’t take into account all the search queries customers will perform.
Search Term: Terms that are actually typed into the search bar. For example, if you’re trying to rank for “rock climbing shoes,” the search term for rock climbing shoes can be anything from “red climbing shoes” to “size 11 Black Diamond shoe.” Search terms are unpredictable and can encompass anything related to the product.
Manual Campaign: A type of campaign in which you have more control over each search term bid. Amazon does not provide manual campaigns with search term suggestions, so you have to manually enter and bid on search terms.
Automatic Campaign:A type of ad campaign that provides keyword suggestions and allows easier control over search term bidding.
Headline Search Ads: Ads that appear before the organic search results and require some ad copy.
Product Display Ads: Ads that appear on product detail pages.
Go Out There and Get Started
I know it can be scary putting your money out there to advertise, but you got this!
For more information about Amazon PPC, here are my favorite Amazon marketing forums:
If you don’t see me on one of these forums, you can also contact me on the Ad Badger site. Just hit that chat button at the bottom right of the page.
Thanks for reading! Always be optimizing!
Guest Post from Michael Erickson Facchin at Ad Badger. In early 2010, I discovered a fast-paced, exciting world of online marketing. I love the challenges that come along with both and the reward for helping businesses grow. Now my objective is to help businesses grow by providing honest online marketing that provides value to their customers. With my company Ad Badger, we offer an automation tool to improve seller’s workflow on Amazon.
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Ronald Dod is the Chief Marketing Officer and Co-founder of Visiture, an end-to-end eCommerce marketing agency focused on helping online merchants acquire more customers through the use of search engines, social media platforms, marketplaces, and their online storefronts. His passion is helping leading brands use data to make more effective decisions in order to drive new traffic and conversions.
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