Amazon’s ad revenue exceeded $10B in 2018, making Amazon the third largest advertising platform behind Facebook and Google. This didn’t happen by accident.
At Blue Wheel Media, we manage the advertising efforts for 50+ brands and we’ve built our own 8-figure business on Amazon using Amazon Advertising.
Knowledge is power. The right information can change your life.
What You Need to Know
1. Pay-to-Play
On Amazon, if you aren’t advertising, you aren’t winning.
How do we know this?
Amazon’s algorithm has changed. In the past, brands and sellers were able to generate reviews (often times against terms and conditions) and simply optimize listings with the right keywords for organic SEO. Today, that doesn’t work anymore.
2. Sales Velocity
Arguably the most important Amazon ranking factor today is “Sales Velocity” or sales per day over time.
Amazon’s algorithm looks at how many units your product sells per day and ranks your product accordingly. If you want to rank above another “camping tent” you’ll need to exceed that camping tent in sales for a period of time. How do you get more sales? You advertise.
3. Auto-bidding
If you aren’t using an auto-bidding technology to manage and optimize your advertising, you're behind.
The smartest advertisers in the room are using tools such as Prestozon, Ignite, Teikametrics, Sellics, etc. to auto optimize their spend. These tools can do things via the Amazon API that the average advertiser could never do by hand.
One example is ACoS optimization. All you have to do is set your ACoS goal, and the software will bid up or down accordingly to get your spend more in line with your goals.
4. Sponsored Products
In most cases, 80% of your spend should be focused on Sponsored Products.
Because when done right, Sponsored Products are typically the highest returning ad type.
5. Amazon DSP
If you’ve exhausted all strategies on Amazon’s search advertising tools, take a stab at Amazon DSP, but start with–and ONLY with–retargeting.
Formerly known as Amazon Adverting Platform, (or AAP) Amazon DSP is a demand-side platform that allows you to reach your audience on Amazon sites/apps as well as through publishing partners and select third-party platforms.
Simply put, it's Amazon’s display ad platform.
You can either open an insertion order with Amazon DSP directly (formerly Amazon Media Group) or you can work with an agency. Currently brands cannot have self-service access to Amazon. If you are looking to make a profit, display advertising can be tricky. Retargeting is an easy first step into DSP, and can often have high return on ad spend of 8-12X.
6. Amazon Attribution
Learn and understand how Amazon’s attribution works.
This refers to how Amazon’s various types of advertising platforms attribute a sale to an ad. It’s a very complex ecosystem, but this article from Search Engine Land can help.
Final Thoughts
Advertising on Amazon is only going to become a bigger and bigger part of Amazon strategies.
Over the next 12-18 months, cost-per-click on Amazon is going to be the most inexpensive in Amazon’s history. But even today, the cost-per-clicks in some product categories are starting to creep up. Now is the time to get into Amazon Advertising and figure out your strategies. There's a potentially very profitable window you can take advantage of now that will never again exist in e-commerce history...
Go get it!
