Have You Optimised Your Amazon Ad Spend?

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Not all Amazon advertisers were made equal.

In fact, Amazon advertisers can be split into two distinct categories. The first is made up of those who throw resources at every available advertising tactic offered through the platform – a fantastic method of trial and error – and maintain this approach throughout their campaigns. The second is made up of advertisers who use this approach initially to see what works for them, and what doesn’t, before forming a more structured strategy that optimises spends to drive resources into where they’ll have the biggest impact.

So which category do you fall into?

Why the Divide?

The main driver of this divide is Amazon’s reputation. Amazon’s reputation precedes it. It’s the world’s largest retailer, and it’s continually nipping at the heels of the Google-Facebook advertising duopoly, threatening disruption to the hierarchy. By the end of this year, Amazon’s ad platform is expected to be worth more than $10 billion.

Advertisers know how powerful Amazon is, and this is creating a widespread belief that simply using the platform is enough to drive desired results. It isn’t. Advertisers can’t expect to take a half hearted approach and make spur of the moment decisions and see the exact results they were hoping for. Just like every ad platform, Amazon requires a strategy; it requires advertisers to optimise spends to get the most from their efforts.

So what exactly are some advertisers doing differently to others?

Great Advertisers Take a Mix ‘n’ Match Approach

Following an initial period of trial and error on the platform, many advertisers choose to drive their resources into those activities that have the biggest impact.

And while it’s certainly true that the majority of the budget should be allocated to high performing activities, lower performing functions shouldn’t be excluded completely.

Optimising spends is about more than just making money; it’s also about meeting objectives. After all, are you really getting a good return on investment if you’re boosting profits but failing to meet your wider business goals?

To optimise ad spends, great advertisers are taking a more flexible mix ‘n’ match approach to three areas of Amazon advertising:

1. Ad Type

The truth is that business goals often cannot be met through one ad type alone. There are three distinct ad types that Amazon offers, each with its own value.

While Sponsored Products promote individual listings, Sponsored Brands build brand awareness, and Display Ads help to extend reach by promoting products alongside associated listings. Each ad type boasts its own unique function and benefit, which is why they all need to play at least some role in any good Amazon advertising strategy.

2. Product Focus

It’s a similar situation when it comes to product focus. Advertisers using the Sponsored Products ad type typically focus exclusively on bestsellers and high converting listings, but it’s possible to derive more value from this ad type by shifting the product focus. Bestsellers often have higher organic visibility than other listings, so using Sponsored Products to promote some of the lesser visible products can make a huge impact, especially for attracting and engaging shoppers looking for new ideas and concepts.

3. Keyword Match

Amazon’s ad platform offers three different types of keyword match: broad, phrase, and exact. Broad match looks at associated terms, phrase match looks at terms before and after the keyword, and exact match looks at exact keywords only. Many advertisers think that optimising ad spends means focusing on exact match keywords that are most likely to convert, but broad and phrase matches can boost visibility.

By mixing and matching high performing activities with lower performing activities, it’s possible to optimise ad spends so that the resources you’re driving into your advertising activities aren’t just boosting revenue, but also taking your business to the next level.

Great Advertisers Prioritise Content

Advertisers know the importance of optimising web page content for visibility in the Google SERPs, but this is often overlooked when it comes to Amazon. Why? Because today, 66% of customer journeys begin on Amazon, leading some advertisers to believe that there’s little point in investing in content optimisation to draw audiences in.

Audiences are already there, which makes data the primary tool for guiding on-site prospects to relevant listings. What advertisers fail to see is that prioritising content is a great way to optimise Amazon ad spends, engaging with on – and off – site prospects.

Optimising your Amazon content to include relevant keywords helps you derive more from your ad spends in two ways. Firstly, it works to draw in those audiences who DON’T begin their journey on the Amazon platform.

Many customer journeys still begin on Google, which means that Google SERPs visibility is still massively important for building awareness and generating sales. Secondly, even those customers that do begin their journey on Amazon need something to fill the ‘convert’ part of the funnel.

While data-driven advertising can fill the ‘attract’ and ‘engage’ aspects, content is a vital component in ensuring your paid advertising activities deliver what they intend to.

Keyword research is an important activity here, ensuring you’re optimising your content using terms and phrases that your customers are most likely to search for. Keyword tools can be helpful, but don’t underestimate the power of competitor analysis, too. By taking a close look at what your competitors are doing – how they’re using keywords to attract and engage audiences – you can incorporate terms into your content strategy that you know are helping to drive success for other businesses within your industry.

Great Advertisers Invest in Organic

Invest in organic? But organic advertising is free advertising, right? It is. But one of the best ways to optimise your Amazon ad spends is to invest in paid activities that generate a much wider organic ‘halo effect’ that keeps delivering results long after a campaign has ended… even across multiple platforms.

It’s a way of really squeezing the most value out of your ad spending. For example, reports show that Google searches for products increase notably during Prime Day, with Amazon ad spends doing more than just influencing Amazon sales; they’re influencing broader sales.

Optimising ad spends to allocate more resources to high usage periods – Prime Day, Black Friday, Cyber Monday, and other events, for example – can produce this halo effect. It uses product-specific spends to raise awareness of a brand as a whole, beyond the confines of the Amazon platform, to generate organic benefits.

Great Advertisers Create Strong Bidding Strategies

Many advertisers place too much importance on bid cost, while what they should be doing to optimise spends is putting more emphasis on creating a bidding strategy that generates rapid and efficient growth. There are pros and cons of both high and low bids – high bids boost product ranking and encourage a greater clickthrough rate, but also cause your Advertising Cost of Sales (ACoS) to rise. Low bids keep spending down, but the payoff is minimal. To optimise spends, a blend of both methods must be used.

The good news is that, last year, Amazon introduced a new feature that makes this easier. The relatively new Dynamic Bidding and Bid Adjustment features allow for automated real time bidding that adjusts bids as necessary in response to how likely an ad click is to convert. Both up and down, and down only, adjustment options are available. These integrated tools can be hugely beneficial in optimising Amazon ads spends, helping to automatically prioritise ad positions most likely to spark conversion.

Great Advertisers Know Spend Optimisation is not a One Time Thing

As all Amazon advertisers know, the platform is evolving constantly. New features are being rolled out regularly, which change how advertisers use the platform to attract, engage, and convert customers. And not only is Amazon’s backend platform changing all the time, but so is the front end. New sellers are registering at a more rapid rate than ever before in a post-COVID selling environment, which means that new brands, new products, and new listings are all affecting Amazon search volumes and search terms.

Optimising Amazon ad spends isn’t something that just needs to be done once. Advertisers really need to stay on top of their optimisation efforts, adapting as necessary based on changes to the platform, to the competition, to sales trends, and to audience behaviour. ClearAds reports are the best way to stay up-to-date with the latest changes and trends in the advertising industry, while your own Amazon data can be analysed and evaluated to ensure you’re always maintaining a consistent position.

Understanding Optimisation

Optimising Amazon ad spends to deliver the best return on investment for your business isn’t necessarily just about lowering costs and minimising your outgoings. As the old saying goes, you have to spend money to make money. Optimising Amazon ad spends is more about taking appropriate action to ensure that whatever budget you are driving into the platform is bringing the most overall value to your brand, driving your business in the right direction, and helping you to achieve your ultimate aims and goals.

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