The special thing about these ads is that they are displayed on the product pages of your competitors.
To choose well, you must define your goals
Why do you want to advertise on Amazon? What are you aiming for? Quickly increase the number of sales? Acquire customers at a lower cost? All at once? There are three possible goals, presented in this triangle. It is advisable to focus on two of the three sides of the triangle.
Scenario 1: Rapidly increase sales volume
If you want to increase sales volume on Amazon quickly, you’re going to have to sacrifice the goal of efficiency. If you increase your bids by 150%, you will not be sure that you will get a proportional return. Law of diminishing returns requires.
Second scenario: Increase efficiency quickly
By “increase efficiency”, we must understand: optimize the cost of your advertising campaigns. For example, if you generate $ 100 in sales with $ 10 ad budget instead of $ 20, you improve your efficiency. You increase your margins.
Focus only on this strategy to reduce your sales volume because your ads will appear less often.
Third scenario: Increase volumes and efficiency
If you want to optimize both volume and efficiency, you will need to be patient. You need some time. This requires a long-term strategy and some experience. It takes time to identify the right keywords to bet on, the right level of bidding, the one that keeps you profitable while maximizing ad visibility. But even if you identify the right keywords and the optimal bid level, the environment is constantly evolving:
- New players are arriving on Amazon.
- Your competitors are optimizing their campaigns at the same time as you.
- Customer needs are changing too.
You can never rest on what you have learned. Campaign optimization is an ongoing process.
Best practices for building your advertising campaigns on Amazon
CPC advertising campaigns on Amazon are built this way:
You can have multiple products in an ad group. These products will be displayed on the keywords defined for this group. When it comes to building Amazon ad campaigns, the main rule is: the more granular, the better. This is why we would tend to recommend that you create an ad group per product ( on Amazon, this corresponds to a “SKU” = a product reference). If you have a small catalog (say, less than 50 products including different versions of the same product), you can create a campaign for each product – and even for each version of your product if those versions are different enough.
Confused about combining multiple products in one ad group or separating these products into different ad groups? To find the best solution, ask yourself these two questions:
Do the products require the same keywords?
When the products are very similar, it is not always relevant to create an ad group per product. On the other hand, if these products require a different set of keywords, then separating them into several ad groups makes sense.
Let us take examples, to fully understand. If you sell tennis racquets and size is a structuring factor, so that people looking for your product indicate the size in the search bar, then it is useful to create several ad groups:
- Tennis Racket Size 1
- Size 2 tennis racket
- Size 3 tennis racket
We took this example at random, for lack of inspiration. Not sure that in this case size really matters. But you got it!
If, on the other hand, you sell shoes (or clothing), people looking for your product are unlikely to list size in their searches. In this case, there is no need to create an ad group per variant.
Do you want to control the bids separately for each variant?
If the answer is yes, then you need to create an ad group per product. The choice of the maximum bid is in fact, made at the ad group level. All products in the same ad group are subject to the same bidding rules.
Two proven Amazon advertising strategies
Now here are two Amazon advertising strategies that always work.
# 1 Strategy number 1: Continuous auction optimization
Bidding optimization is a never-ending process when you are faced with competition – that is in almost all cases! Bids need to be constantly adjusted so that your products continue to be displayed in front of those of your competitors, increase your sales and maintain the same “efficiency” (in the sense defined above).
Your goals should guide your bid optimization work. You should also always have your cost per conversion goals in mind when considering whether to raise, lower, or leave a bid as it is.
Example scenario # 1:
Your goal is to increase your sales volume on Amazon and improve your efficiency. You are targeting 10% ACOS. In Amazon terminology, ACOS is the share of the proceeds of the sale (CA) taken by Amazon. For example, if to sell a product for $ 100 you spend $ 10 advertising on Amazon, the ACOS equals 10%.
ACOS = Total Ad Spend / Total Sales x 100.
You have a keyword that presents the following metrics over the last 14 days:
- Keyword: Two-seater inflatable mattress
- Bid: 1.5 €
- Average CPC: € 1.15
- ACOS: 15%
This keyword has generated a lot of sales over the past two weeks. Only, the ACOS is 5% above your target. In this situation, two actions are possible:
- Your bid is currently above the average CPC, which means your ad “wins” most of the time. You could try to lower your bid to $ 1.10. By doing this, your will earn less often and be less visible, but your CPC will be lower on average. The result: you will have a lower ACOS, so you will lose less (by selling less) than you will gain (by reducing your expenses).
- You don’t touch your auction. If this is an essential keyword for you, it is too bad if it does not meet your ACOS objective, if it is less profitable for you: you continue to generate sales on an essential keyword. This allows you to improve your organic search on this keyword.
Example scenario # 2:
Your goal, in this second scenario, is the same: increase your sales and gain efficiency. You set yourself a target ACOS of 10%, as before.
But the keyword and associated metrics have changed:
- Keyword: Office accessories
- Bids: 1.5 €
- Average CPC: € 1.15
- ACOS: 35%.
ACOS is clearly above your target this time around. Besides, this is a keyword that is not really relevant to you. There is no reason to want to sacrifice your margins at all costs (you can say it) to increase your sales. In this case, it is reasonable to set a bid lower than the average CPC.
# 1 Strategy number 2: Keyword harvesting (or Keyword Harvesting)
In an Amazon advertising strategy, Keyword Harvesting is a very interesting approach. Put simply, pay Amazon to identify your target keywords – that is, the phrases your target customers use to find the products you sell. As we saw earlier, you can create “automatic” campaigns: Amazon uses its algorithm to display your products on the requests that it deems the most relevant – based on the content of your pages products. For this strategy to work, your product pages must be rich in content.
Once you have analyzed the strongest keywords that bring you the most conversions, you can reuse them in your “manual” campaigns on Amazon. But also in your Google Search advertising campaigns.
To collect keywords, upload the search terms report to your Amazon Advertising account. This report shows which keywords resulted in clicks. For example, if a user types “super hyped sneakers” into Amazon’s search engine and clicks on one of your ads, that keyword is loaded into the report.
To access this report, go to your Amazon Advertising account . Click on “Advertising Reports> Search Term Report and download the report.
3 final tips to become an Amazon advertising pro
Finally, here are three final tips for the road:
- Take the time to define your priority goals and calculate your ACOS targets. If you have no idea of your target ACOSs, you won’t be able to intelligently optimize your bids. You will grope.
- Promote your flagship products first – the most original, those on which you offer lower prices than the competition, etc. There are certain products that it is not wise to promote on Amazon. There is no point in spending your budget on products that convert poorly.
- Don’t get your feet up on the carpet. Optimizing bids is important, as we’ve seen, but you don’t have to become obsessive and try to change bids every day. It’s time-consuming, and it doesn’t help. Just because you spent more than your budget on Day 1 doesn’t mean you need to pause your keyword on Day 2. Take a step back; instead, analyze long-term trends. Don’t be overly responsive.
We hope we have convinced you of the value of advertising on Amazon and given you some helpful tips! It’s your turn!