It was another record-breaking year for the e-commerce giant, Amazon.
Perhaps the most telling is that before the start of 2019, the company earned a valuation of $1 trillion.
This makes it only the second U.S. company in history after Apple to hit such a milestone.
There’s also their Q3 2018 results to consider, which revealed $56.6 billion in revenue.
This represents close to 30% YoY growth, and much of this is attributed to the popularity of Prime.
To attest to this, in 2019, it’s predicted that over half (51.3%) of U.S. households will be Prime members.
All this goes to show the importance of Amazon for marketers well into the future.
But, advertising on Amazon isn’t so straightforward.
Just like any other PPC campaign, an Amazon marketing plan comes with challenges and obstacles.
Though some of these will be unique based on your products and industry, there are common Amazon advertising challenges every marketer should know.
We’re discussing what are these universal challenges and how best to overcome them.
This allows you to understand how to advertise on Amazon in a more effective, efficient way while seizing every opportunity to maximize your ROI.
When you know what to expect, you can tackle these obstacles head-on.
Proving Your Amazon Advertising Strategy Performance With the Right KPIs
Reporting has been identified as the number one Amazon advertising challenge by advertisers using the platform.
For many, the biggest pain point lies in the lack of customization of categories and dimensions for reporting.
Though there’s still a ways to go for e-commerce in terms of advanced capabilities, there are some common KPIs worth tracking for anyone advertising on Amazon.
Just like with any other PPC campaign, the CTR of your Amazon ads is an essential metric to analyze performance.
Across industries, the average CTR on Amazon is 0.33%.
Click-through rate is calculated by dividing the total number of clicks on an ad by the total number of impressions.
This Amazon marketing metric tells you how effective your ad is at capturing user attention.
Though this doesn’t indicate actual sales, the general rule of thumb is that the more people click, the higher the likelihood of conversion.
Also, a high CTR indicates people are engaging with your brand and thereby boosting brand awareness.
If you’re experiencing a low CTR with your Amazon marketing plan, consider the following tips:
- Examine your keywords and try targeting ones that are more long-tail/specific.
- Change your price: A product costing $X.95 may attract more clicks and sales than one that costs $X.99. That 4-cent difference will be more than made up for when you see greater conversions.
- Attract more, positive reviews on your Amazon product page.
All Metrics in Amazon Campaign Manager
Amazon’s marketing tool does provide useful metrics already built-in.
Don’t overlook these when determining the most essential KPIs of your Amazon advertising strategy.
There are four major performance indicators reported in the campaign manager:
- ACoS (advertising cost of sales)
Of these, ACoS is of particular interest.
ACoS is the measure of your Amazon advertising costs divided by the total number of sales generated.
It is similar to ROI but is not entirely accurate because does not take into account the share of revenue handed over to Amazon in the course of the transaction.
However, it can be an incredibly helpful metric when marketing on Amazon to determine the effectiveness of an overall campaign or ad set in comparison to spend.
In general, the lower the ACoS, the better.
The essential tip to achieve your best ACoS is to adjust your CPC/campaign bid (depending on if you are doing manual or automatic targeting).
Pay close attention to your profit after ad spend to determine what is performing best.
Amazon Sales Attribution
This tool is one of the most effective at proving performance because it lets you measure the impact of your ads across platforms.
From their first click on your Amazon ad, the attribution tool tracks their online behavior to determine if they return to your page and make a purchase within a given window of time.
Beyond just looking at conversions from your Amazon advertising campaigns, this tool is also helpful for examining how customers behave across platforms.
You can analyze every action leading to their engagement with your brand on Amazon.
Tracking the traffic to your page even when it’s off-platform means you can optimize your Amazon marketing plan more effectively.
Dealing With an Increasingly Saturated Amazon Marketing Environment is a Major Amazon Advertising Challenge
There’s no doubt that Amazon is a profitable platform for marketers.
As a result, advertisers are flocking to the platform.
In fact, 80% of those currently marketing on Amazon plan to increase their ad budget in 2019.
Thus, one of the greatest Amazon advertising challenges is making sure you stand out in the crowd.
Do Your Product Research
Finding a new niche that has clear consumer demand and profitability is an Amazon advertiser’s dream.
The best way to determine which products to start selling is with the various Amazon product research tools available to marketers.
Once you determine which products to sell, you can start developing effective Amazon ads.
Keywords Are. . .Key
Keywords for advertising on Amazon are as important for visibility as in any SEO strategy.
When people search on Amazon, you want your product to appear at the top of the list.
Sure, Sponsored ads will ensure you get prime placement, but this will only happen if you’re targeting relevant search terms first.
You can optimize your product listings, track competitor’s keyword rankings, and more.
Additionally, you can create more effective Amazon ads that integrate keywords your customers are searching for.
Accumulate Positive Reviews
The quality of your reviews and your seller rating both have a huge impact on both conversion rates and your organic Amazon marketing success.
Consider the fact that 74% of consumers trust a business more if they have positive reviews.
Building a good reputation through positive customer feedback is essential.
It’s also one of the greatest Amazon advertising challenges.
We recommend a tool like FeedbackGenius for this.
After your product is delivered, FeedbackGenius automatically sends them an email politely requesting their review.
Plus, the tool automates the process to make the entire process even easier.
Selecting the Right Type of Amazon Ads to Run
There are a few different types of ad placements that marketers can choose from when advertising on Amazon.
You should weigh the pros and cons of each, while also considering an Amazon marketing plan that incorporates multiple types.
As with any PPC campaign, your best results will come through continuous testing, optimization, and results-tracking.
The three major Amazon ad placements are:
- Sponsored Products
- Sponsored Brands (aka Headline Search Ads)
- Product Display
Sponsored Products Offer Big Rewards to the Experienced Amazon Marketer
Sponsored Product Amazon ads are keyword-focused advertisements that appear among search results.
When clicked, this type of ad drives customers directly to a specific product page.
Sponsored Product ads usually appear at the top or bottom of search page results.
With this Amazon advertising strategy, you can set either automatic or manual bidding.
Since you pay on a cost-per-click basis, this is where experience with Amazon advertising can be a big advantage.
With the right know-how, you can manually control your bidding options to maximize the profitability of a Sponsored Product ad.
Keyword targeting is the name of the game here.
So, the more comfortable you are with keyword optimization (or with the right Amazon marketing agency by your side), the better the outcome can be.
Headline Search Ads are a Great Place to Start Your Amazon Marketing Plan
Headline ads, also called Sponsored Brand ads, appear above search results as headline banner ads on the page.
They feature your brand logo, a tagline, and up to three product images.
Unlike Sponsored Product Amazon ads, Headline Search ads can take customers to the destination of your choosing.
This can be a designated landing page, a specific product listing, your Amazon Store, etc.
Similar to Sponsored Products, though, they are keyword-focused.
This means your Headline ads will only appear in search result pages of relevant terms/products.
The reason why Headline Search ads are better for beginners who are just starting to advertise on Amazon is the ease of customization and optimization.
Plus, you’re guaranteed to stand out among search results with prime placement at the top and center of the page.
Advertising on Amazon With Display Ads is Ideal for Niche Targeting
The last major ad type, Display ads, are unlike the previous two in that they are not keyword-focused.
Instead, they use interest or product targeting as the basis for appearing to customers.
Also, Amazon Display ads can appear both on and off Amazon, making them a useful complement to a cross-platform advertising strategy.
Considering this type of ad is interest or product targeted, it helps to have a specific audience in mind to display these to.
This format also offers an excellent opportunity to target competitors.
You can run an aggressive Amazon marketing plan and have your ad appear on a competitor’s product page.
These again offer a range of customization options in terms of the ad image and text.
Embrace the Challenges of Amazon Advertising This Year
There’s nothing like the feeling of overcoming a difficult challenge.
Amazon marketing is no different in terms of the satisfaction you can gain by tackling these obstacles head-on.
It’s not just the emotional win, but also the tangible boost to your bottom line that makes Amazon advertising success even sweeter.
Now that you know the most common Amazon advertising challenges, you’ll be better prepared to deal with them.
As a result, you’ll have both the experience and the foresight to handle additional obstacles as they happen (because they will happen).
It’s time to embrace the challenges of advertising on Amazon.