The Sleeping Giant: How Amazon Advertising Works

July 8, 2017 in Uncategorized

Imagine the targeting abilities of Facebook combined with the ease of Google’s advertising management platform. This is essentially what Amazon is offering brands for their marketing strategies. It’s already the world’s largest retailer, raking in over $35 billion in net sales by April, 2017.

In 2016, Amazon earned $1.4 billion in ad revenue. Though it’s got a long way to go to reach Facebook’s ad spend of $27 billion, and an even greater disparity with Google’s $79 billion in earnings, this e-commerce hegemon has the ability to grow exponentially, and do so quickly. In fact, experts are predicting Amazon’s advertisement revenue to increase to $3.5 billion by the end of this year, and to grow over 60% in 2018.  

How Amazon Advertising Works

Amazon Marketing Service’s (AMS) Sponsored Products offer advertisers the ability to launch a PPC campaign that’s similarly appealing to Google and Facebook in terms of cost-effectiveness and audience engagement. Also similar to Google AdWords, it’s based on a bid system. Once a brand wins a bid on a product, it will appear in the top search results when someone uses the appropriate keywords. The biggest decision left to the marketer is whether to select manual targeting (choice of the user) or automatic targeting (Amazon optimizes and selects a target audience for you).

Amazon product screenshot

When launching an AMS campaign, you have the option to select your ad goals: Boost product sales, increase book sales, drive traffic to an outside website, or increase app downloads. By starting out with similar advertising goals as Facebook, Amazon is clueing into an audience already familiar with launching a campaign on a major paid social platform. Unlike competitors such as Snapchat and Instagram that require effort to understand the functionality of the platform itself, and thereby present a learning curve to marketers, Amazon is tapping into a pre-existing understanding. The layout of the tiered, ad campaign structure, too, is similar to Facebook and Google AdWords.

The Secret is in the Targeting

The major way Amazon is likely to become a true competitor to Facebook and Google is with its audience targeting abilities. A quick statistical rundown of Amazon:

e-commerce growth graph

With the amount of users and their high engagement and return rates, Amazon represents fertile ground for advertisers. As an e-commerce giant, Amazon offers key insights into consumer behavior like no other competitor can. For brands that are in a products industry (versus services), the ability to have the audience of the world’s largest online retailer at their disposal is a huge advantage. Amazon can track the products people search for, put in their cart, complete the purchase on, etc. These insights become invaluable to any online retailer.

Amazon is King of Keywords

More people use Amazon for product searches than Google, with 55% starting their search on Amazon versus the 28% who choose a search engine instead. Also, as is the nature of e-commerce, many people are searching for specific keywords or terms, which makes targeting and reaching them easier. Instead of wasting money on vague keywords in hopes of appearing in Google search results, Amazon encourages more focused campaigns.

Burt's Bees on Amazon

Additionally, conversion rates are likely to be higher on Amazon due to these keywords. Often, users will type in a more specific item they are looking for (e.g. sandals, instead of just shoes). The user has already narrowed down the search results and what appears is exactly the array of products they desire.

That person’s purchase intent is also greater than someone searching on Google, based on the nature of them browsing an online retailer that encourages instant purchase and specific keywords. For Burt’s Bees, their AMS ad campaign resulted in a purchase intent four times greater than their campaign average. On Google, your business may show up in the search results for a keyword, but the user is not as motivated a buyer as they are on Amazon.

It’s true that Amazon has quite a bit of ground to cover in the realm of ad revenue in order to adequately compete with Google and Facebook. However, its potential to do so is truly impressive. Having already secured the spot as world’s largest online retailer, it has accrued a loyal and motivated audience. Additionally, Amazon’s advantages as an e-commerce site include factors crucial to advertising success: high purchase intent, focused keywords, and easily segmented and targeted audiences. So sound the warning bells in Google HQ: Amazon has taken over online shopping and is now turning its attention to digital advertising.

Why We Win: A Breakdown of Taktical’s Process

June 6, 2016 in Uncategorized

Hiring a digital marketing agency or consultant is a tough job. A lot of people make a lot of promises.

Making matters more difficult is that most of what we do isn’t that dissimilar from each other, either. Most agencies offer the same assortment of services. SEO, SEM, Social Ads, Influencer Marketing, and so on.

What sets some agencies apart and above the rest is mostly process, the steps they take in order to accomplish their goals. Aside from the proprietary tools we use to speed up efforts and reduce the time certain things take, we rely on our process to help us.

This is where we stand apart. This is how we run circles around other agencies. This is why we win…

Taktical is Different

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Our process is what makes us special, and we’re about to show you how we do it.

Taktical is set up as a small team of narrow field experts. Each person on the team has a specific skill set and they are called into a project only if that skill is needed. We have organic growth specialists, paid media, social, conversion optimization, and content.

Not every client is a fit for us, and we know this. We turn away about half of the companies who ask to hire us.

When a client is a fit, we first ask them to grant us access to their analytics (assuming those properties are set up). As individuals, we go over the numbers. Then we have a kickoff meeting.

Step 1: The Kickoff

The kickoff meeting isn’t unique to our agency, almost all agencies do some form it. What makes our kickoff meetings special is their intensity. Kickoff meetings can (and often do) last longer than two hours. We argue a lot. We argue with each other and we argue with our client.

We ask incredibly penetrating questions, sometimes clients get edgy or even defensive. Its not rare to hear someone say “I’m sorry, but why do you need to know that?”

Here’s some questions we ask that clients sometimes get defensive over:

What’s the profit margin on the things you sell?
How much money does the company make now?
What’s a new customer worth to you, their lifetime value?
If I were a potential customer, why would I buy from you and not your competitor?
Have you raised money? How much? When’s your next raise? What’s your start-up valued at?

We ask these questions for a reason, because we need to understand your business from the inside. Its not rare for our clients to not know the value of a new customer or even how much money they’re making from various sales channels. We need to figure this out.

Step 2: The Whiteboard

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In every meeting room in our office, we have a whiteboard and we use them. The whiteboard session is usually held within a day or two of the kickoff meeting. We review our notes and begin to assemble a plan of action for the project.

We usually divide the conversation into sections relating to each marketing channel. Paid, organic, search, email are the basic categories. Each channel gets reviewed, starting from the most basic question, “Can we make use of this channel?”.  Not all clients have the budget and not all products are a fit for each channel.

Then we figure our angles. Taktical has an array of secret tools and methods that let us scale efforts quickly. We plan on which method we can apply where, sometimes we realize that we can use a particular tool in a different way that we usually do.

We list all of our ideas, and based on experience we judge how effective each might be. Each plan is given a timeline and an urgency level, so we can prioritize when we move on to step 3.

 

Step 3: The Trello Board & SCRUM

At this stage, the white board is translated into a Trello board. If you’re unfamiliar with Trello, it’s a web-based project management tool from the people who made StackOverflow, and its awesome.

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Each client gets their own Trello board with “Swimlanes” or columns that refer to the stage that each tasks stands at. It’s essentially the SCRUM Method of project management popularized by software engineers.

Using SCRUM for marketing is completely unique to Taktical.

We’ve learned that the problem with marketing is simply the volume of things that need to get done, and the multitude of moving parts. We treat a marketing campaign like a giant software project, which requires project management methods to accomplish.

Elements of marketing are planned, quickly deployed and then relentlessly tested.

Step 4: Grow the Green, Cut The Red

Here’s where other agencies usually drop off a cliff. They don’t pivot.

We track every marketing channel tightly. We test hundreds of variants of our ads. We test landing page and designs. We test the color of your purchase buttons and the headlines on your sales pages.

Every test is evaluated and if a particular effort or channel isn’t working, we’ll change it up. If it still doesn’t work, we’ll end it completely. We’re not afraid to tell clients that our ideas didn’t work and come up with new ones. If something does work, we ramp it up.

The testing is the final key to the puzzle, its what makes all the rest of the system work. We feed the learnings back to the top of the process and start again.

Let Us Help You

If you’re interested in learning more about our methods and seeing if we’re the right fit for your company, shoot an email over to hello@taktical.co, and lets chat!