A Basic Guide to Amazon Advertising

Amazon ads are by no means something that is finalized and then left alone. A seller has to decide where to start, adjust strategies, refine keywords, rinse, and repeat. Then, just when it seems a campaign is set just right, something changes with Amazon, shoppers, or competitors. Below is a loose outline of the process.

Discovery

When starting out fresh, no piece of information is useless. Useful resources include internal historical sales data and competitor ads.  

An advertising campaign should start with extensive keyword research with any terms that are relevant to the product or product line, depending on the type of ad 

These terms become Broad Match keywords, which are explained in the next section.

A seller should aim for high quantities of keywords so that all possibilities are tested. The goal for the following period of time is to identify what’s working and what’s not.

Expansion

After an adequate first trial, the keywords are ready for development. Keywords used for advertisements can be categorized by effectiveness.

Broad Match keywords were the keywords from the initial research. They’re intuitive, rough estimates of what might work. In practice, products with keywords categorized as Broad Match will result for anything remotely related to the keyword. While it seems like this would increase visibility, the product would actually rank weakly. Broad Match is used primarily for discovery.

Phrase Match keywords are those that have been tried and show potential. Maybe they are clicked more than others but haven’t converted yet. Amazon will display the product for searches that are variations of the phrase.

Finally, Exact Match keywords are almost definitely effective. These keywords have converted and shown promising opportunity. The product will only result if the search uses the exact keywords. In this case, the product is a strong match so it will rank high and have a high likelihood of conversion.

The process of categorizing keywords based on performance works like a match type assembly line as a seller systematically filters through masses of keywords.

Refinement

For the duration of the advertising campaign, a seller should focus on getting the most bang for their buck.

The very first step is to get rid of keywords that haven’t been working throughout the testing periods. It’s important that keywords are adequately tested first, but then discarded if they fail so they aren’t burning cash.

Along the lines of saving money on failing channels, negative keywords should be inputted. These keywords specifically tell Amazon not to display a product for certain searches. At first, a seller might assume that any exposure is good exposure, but if a search isn’t converting, it’s a waste of money to display the ad.

Lastly, the bids and budgets for each keyword need to be adjusted to maximize profit. Small tweaks can make big differences, so sellers should proceed with well-thought-out strategy.

Approach

Advertising campaigns are typically approached in two ways. The first strategy is to get the Advertising Cost of Sales (ACoS) as low as possible. A low ACoS means that the ads are maximizing their Return on Investment (ROI) in terms of sales for bid.

The second strategy is growth focused. The ACoS of campaigns using this approach tend to be higher. In fact, sellers aim to get the ACoS as close to their marginal costs as possible. Since Amazon views ad-generated sales the same as organically-searched sales, ad-generated sales contribute to a listing’s search result page ranking. While strategy two breaks even in terms of dollars, it pays off long-term through free increased visibility.

Whichever approach a seller chooses, it’s important to understand that e-commerce advertising is a process. Being so time intensive with the constant testing, sellers who dedicate the resources to maximizing their advertising efforts are the ones that feel the real power of ads.