4 Ways to Save Money on Amazon Advertising

By Buy Box Experts on June 10, 2020

How to Save Money Advertising on Amazon

The economic slump, caused by the COVID-19 pandemic, has many brands rethinking their finances on Amazon. However, rather than slashing budgets, brands should look at increasing efficiencies through their Amazon advertising

When advertising on Amazon, it can be easy to overspend, especially if brands aren’t practicing diligent daily oversight. 

Avoid making this mistake by following this list of tips and tricks to help save (and make!) money on Amazon PPC campaigns. 

1). Don’t Trust Automation

Amazon offers an “auto” feature for your PPC campaigns, but it’s not always efficient nor is it cost-effective. Automation sometimes allocates spending toward ineffective keywords. And, when left unchecked, a seller could be spending a lot of money and not making sales. 

Out of the three bid types on Amazon, two of them are automatic: Bid Down and Dynamic. Dynamic automatically adjusts the bid amount up or down, depending on the keyword’s trends and what Amazon thinks will help increase conversion. However, this doesn’t guarantee conversion. Sometimes, it can significantly swing your budget. Additionally, even if the adjustment is modest, those small changes can add up over time. In the end, a seller can lose efficiencies and end up paying more for less.

The best type of bid to stay on budget is a fixed bid. As the name suggests, it stays at a fixed rate. Fixed bids help sellers save money on Amazon advertising because their cash isn’t going toward inefficient bid amounts for their keywords. They control all costs. Using consistent, daily oversight, a seller can minimize advertising costs and maximize sales by catching subtle changes in bids and putting their money into the keywords that match their budget and performance requirements. 

To set a strong bid, a seller should take a few things into consideration:

  • Amazon’s recommended low and high bid amount.
  • Business Goals: If the goal is to be aggressive and get as much traffic as possible, a brand should bid a higher amount. If the goal is to be efficient, they should bid a lower amount. 
  • Watching the number of impressions and clicks, along with the conversion rate, will help sellers gauge the keywords’ performance: If trending up, a seller can allocate more budget to advertising. If trending down, spend less and focus on being efficient. 

Want to know how to better control your advertising and save money on Amazon advertising? Buy Box Experts can help. We offer a FREE Amazon Advertising Audit. We’ll review your account with you and help you identify the places you can cost costs and maximize ROI.

2). Bid on the Right Keywords

Many sellers bid on broad, top-of-the-funnel keywords. These types of keywords come with a high cost and a low conversion because they typically represent the start of a customer’s buying journey rather than the end. 

Imagine a customer is searching for a water bottle. If he types “water bottle” into the search, he’ll be given a large variety to choose from. Water bottles of different shapes, sizes, colors, and features will appear. Some will come with straws, others won’t. The material they’re all made from may also be different.

So, he’ll have to refine his search. Let’s say he actually wants a “tall light blue water bottle with fruit infuser,” so he types that into the search bar. Here are the top results:

Most of these bottles come in some shade of blue, they’re all tall, and they feature fruit infusers—exactly what he’s looking for. Once he decides on a bottle and purchases it, that will be the end of his buying journey. Not surprisingly, the more focused, bottom-of-the-funnel, or long-tail keywords won the sale instead of the broad, general phrases. 

A seller could spend almost infinitely on top-of-the-funnel keywords and achieve little to no sales. Top-of-funnel or really broad keywords can bust a budget very quickly.  Instead, sellers should max-out their spend on bottom-funnel keywords first and then work their way up the funnel until they hit their budget. 

But how does a seller determine which keywords to bid on? Sellers should analyze both real-time sales data and traffic reports through the use of Brand Analytics and Customer Search Term Reports on Amazon. Both are available on Seller Central for brand-registered sellers. Sellers can also use external keyword research programs like Helium10 to help them find the right keywords.

You can also find the most effective keywords by requesting a FREE Market Share Analysis from Buy Box Experts. We’ll give you the top 1,000 keywords in your category—at no cost to you. Plus, we’ll show you just how much of the market your brand holds and give you tips on what you can do to grab more market share and increase sales.Click Here to Sign up For a Free Market Share Analysis!

3). Bid on Your Brand’s Keywords

Brands mistakenly believe they don’t have to bid on their own branded keywords. It’s easy to think, “if a customer searches for my product, won’t I get the sale?” Yes and no. 

A brand may get a majority of the sales from organic branded searches. However, “majority” is anything over 50%. This means a brand could get 51% of their own branded traffic and lose 49% to their competitors. Those aren’t good numbers. 

Branded traffic is the most inexpensive traffic a brand can buy. To be efficient with funds and save money on Amazon advertising, max out branded traffic first to get the best bang for your buck. 

4). Know which ads to use

There are 3 main types of ads on Amazon: sponsored product, sponsored brand, and sponsored display. 

  • Sponsored Product – Sponsored product ads appear in the SERP (Search Engine Results Page) with a “sponsored” tag on them. These types of ads usually have the highest conversion rates.
  • Sponsored Brand – Sponsored brand ads appear as a banner on the SERP. Unfortunately, many brands can overspend or underspend on this type of ad. Because they look like a traditional ad, shoppers can tend to ignore them. However, sponsored brand ads serve as a good touchpoint or “discovery” in the customer journey. Again, review impressions, clicks, and conversion to make sure these types of ads are working within the budget.
  • Amazon Sponsored Display – These ads allow brands to reach customers via placements on product detail pages and other pages across Amazon’s platform. These ads can also appear on Amazon’s third-party display network using targeting on desktop and mobile devices.

We always recommend maximizing sales velocity in an ad strategy. This typically leads to using Sponsored Products as a foundation for advertising. But, a brand or seller should ultimately let the data make the decision as to what ad type should be used to accomplish their performance goals. 

Cut Costs & Maximize Profit

Currently, many sellers have had to cinch up their purses, but that doesn’t mean they have to lose out on profit. Save money with Amazon advertising by following these simple tips. They’ll help any seller reduce costs and increase sales. 

Want to improve your advertising campaign even more?

Request a FREE Ad Audit from Buy Box Experts. We’ll review your PPC campaigns, show you where you can cut further costs, and explain how you can best maximize your profits.

Buy Box Experts
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