[Kenshoo] Amazon in the Weeds: Important Nuances and Best Practices for Amazon Advertising Success
August 4, 2020
Meet The Speakers
Listen to the podcast
Here’s a glimpse of what you’ll learn:
- The key strategic nuances of Amazon and why brands should take a customer-first approach
- Do Amazon customers behave differently from traditional e-commerce shoppers?
- Megan Harbold talks about product positioning and the use of keywords on Amazon
- How to create campaign structures that are specific to your business goals
- When should you start thinking about automation, and how can Kenshoo help?
- Why brands should create and view every Amazon listing as a separate business
- The most useful metrics for checking your performance on Amazon
- Megan shares her best practices for Amazon Advertising success
In this episode…
When selling on Amazon, it’s important to stay aware of the platform’s various key advertising nuances. For instance, if you want to get a clear and accurate picture of the performance of your listings, you’ll have to look beyond what Amazon is reporting.
The best way to do this is with a third-party software, such as Kenshoo. Kenshoo helps brands navigate all of the important nuances within the platform so that they can achieve Amazon Advertising success. For example, Megan Harbold of Kenshoo explains that brands should take a customer-first approach when promoting listings, as Amazon is more centered on consumers than keywords.
In this episode of Buy Box Experts, Eric Stopper talks to Megan Harbold, the VP of Global Strategic Consulting at Kenshoo, about some of the key advertising nuances on the Amazon platform. They discuss how to create a strategy around Amazon’s customer-focused approach, when brands should start thinking about automation, and how Kenshoo can help you take your Amazon Advertising to the next level. Stay tuned.
Resources Mentioned in this episode
Sponsor for this episode…
Buy Box Experts applies decades of e-commerce experience to successfully manage their clients’ marketplace accounts. The Buy Box account managers specialize in combining an understanding of their clients’ business fundamentals and their in-depth expertise in the Amazon Marketplace.
The team works with marketplace technicians using a system of processes, proprietary software, and extensive channel experience to ensure your Amazon presence captures the opportunity in the marketplace–not only producing greater revenue and profits but also reducing or eliminating your business’ workload.
Buy Box Experts prides itself on being one of the few agencies with an SMB (small to medium-sized business) division and an Enterprise division. Buy Box does not commingle clients among divisions as each has unique needs and requirements for proper account management.
Learn more about Buy Box Experts at BuyBoxExperts.com.
Episode Transcript
Intro 0:09
Welcome to the Buy Box Experts podcast we bring to light the unique opportunities brands face in today’s e-commerce world.
Eric Stopper 0:18
And welcome to the Buy Box Experts podcast. This is Eric Stopper. Today’s episode is brought to you by Buy Box Experts. Buy Box Experts takes ambitious brands and makes them unbeatable. We’ve got a team of consultants. I’m one of them, go to buyboxexperts.com click on the free analysis button and you’ll be connected with me or a member of my team. We would love to help you out. There is a lot going on in the world that demands e-commerce attention. And so if you’re worried at all about your business, please reach out to us buyboxexperts.com free listing analysis button. This episode is part of a 10-part series we’re doing with the geniuses at Kenshoo. We thought to bring together our collective knowledge in a way that was fun and educationally indispensable.
Today I’m joined by Megan Harbold, the VP of Global Strategic Consulting. And we’re going to be discussing Amazon in the weeds, important nuances and best practices for Amazon advertising success. Now for anyone’s whose college professors might have just assumed that you know what nuance means. It’s basically a small difference, like the fact that Amazon reports on return on ad spend. But they’re nuanced. And the fact that they use a cost report for this number, it’s a little bit different. It means that you have to think about different things for your business and understand what those numbers actually mean in the grand scheme of things. And so I’ve brought Megan on, she is an expert. Without further ado, welcome to the show.
Megan Harbold 1:37
Thanks, Eric. Looking forward to digging in.
Eric Stopper 1:39
So I think a good place to start would be just identifying kind of the key nuances of Amazon and going from there.
Megan Harbold 1:48
Yeah, and so when I hear nuances with Amazon, especially Amazon advertising, I think my head immediately goes more to the strategic nuances. So I think I’m really under the impression that your strategy for Amazon advertising isn’t going to necessarily be the same as it is for Google or Facebook or even for, you know, the more traditional approaches that many of us have our backgrounds in or are used to. And so often, you know, customers or advertisers, as you would, you know, start their approach and structure of their campaigns with a keyword. And I would say, maybe there’s a nuance there that it’s not necessarily a keyword first in the world of Amazon.
Eric Stopper 2:34
So, give it to the folks who are managing the ads. Some of them probably just heard you in Wait, hold on a second. Don’t focus on the keyword first. What should I be focusing on first?
Megan Harbold 2:49
Yeah, and that’s where it gets a little crazy. Taking a step back thinking firstly and foremost about your strategy. And I would say on Amazon in particular, it’s really about That customer. You know, Amazon themselves as a company is founded in that customer first approach, really making sure that they’re driving things like that assortment and that the trust and convenience, having the right price, you need to have those exact same considerations and be very clear and understanding your brand or your product role in influencing that consumer. When you have that kind of mapped out and you understand how your consumers engage with Amazon, how they expect to engage with your brand on Amazon, then you can really start to get into the nitty gritty of the strategy. And again, having that customer first approach doesn’t necessarily mean it’s all about the keyword but there’s other things like placement or the product that are very important considerations. And Amazon luckily gives us the tools to to start thinking through more strategically.
Eric Stopper 3:50
So I’ve touched on this topic with a few people in this series about right like what is Do we have about our customers on Amazon? It seems like the underlying assumption is that the way that people shop or the shoppers on Amazon are different, in some way than a traditional point of data when it comes to e-commerce, right? They behave differently. They have different belief structures, they’re looking for different things. They use different, like heuristics or models to make their purchases. And so how is a brand supposed to figure this difference out? Or is it or all their customers generally the same and how they behave online?
Megan Harbold 4:35
That’s a really nuanced question. I do I definitely think you know, there’s definitely some obvious heuristic needs, right? And I think one of the biggest Well, I should say two of the biggest themes that we see today are essentially the trust that they have in your brand and or in your product I should specify and the convenience by which they can get that product So if you think about trusting convenience as your two major metrics of success with your consumer, what does Amazon provide us in terms of data and intelligence to understand? Are we doing that well or not advertising and your placement within advertising is obviously a key part in that, but there’s a lot of other things, especially around this kind of concept of retail health, that ultimately can give you clues as to where to really focus and make sure you’re optimizing.
Eric Stopper 5:30
I mean, there’s a million different directions that I can that I can go with it. So I’m gonna take two steps back and address the issue of like, what should everybody focus on first, you said specifically, your strategy and approach, right? So on Google, right? The objective is to determine what kinds of questions people are asking of Google that you can answer and that you can then Either capture that person’s data and retarget them or that you can directly market a product through some sort of SEO, article, video, whatever those are. So for Amazon, right, these customers are starting their search with a purchase decision in mind at some point. And so the keywords sound really, really important in that situation, what people are searching for is very similar to Google. And it sounds like the devil is going to be in the details. You talked about product positioning, and what does that mean on Amazon for all these brands?
Megan Harbold 6:37
Yeah, I think it’s not to say keywords aren’t important. I think what’s more important is what you do with the keyword aka which products are you surfacing for that keyword search, are those the right products a for that consumer be for your brand, in terms of things like profitability and success of, you know, the experience that that consumers going to deliver See to drive maximum scale and growth. And I think that’s where, again, this nuance is really coming to light. It’s not just a keyword consideration. It’s that full funnel that full understanding of what that consumer is going to do. Once they do that keyword search, are they going to interact with your product? Because it was in fact the right one or not?
Eric Stopper 7:21
So is his click through rate, then the metric that everybody needs to look at to determine whether or not their product is well positioned for a keyword? Or is there another better way of looking at it?
Megan Harbold 7:33
This is where, again, I think if we start with the foundation of Firstly, do you know what your mapping is? Do you know which keywords belong to which products? If you haven’t gotten that far, then there’s the first thing that has to be done is essentially creating that data intelligence around retail health. Once those are all in place, likely what that means is you’re going to have to deliver different types of ads structures. Right. So now we’re getting back into this foundational concept of how you’re even creating campaigns, what ad groups go in those campaigns, which keywords target, which. And this is really, really critical. Because of all the challenges and potential, you know, stock apps and how Amazon reports back metrics, you need to make sure that your campaign structures are set up in a way to give you the right level of data and intelligence to make those kinds of optimization decisions. Further. This is where the measurement piece right becomes critical as you’re going through this process of understanding keywords, and mapping and what that ad structure needs to do to deliver the best insight possible. You’re also defining what those KPIs are for success. So if you as a brand, have identified 10 products that are must win, I always have to be at top of search, I always have to be getting the click over XYZ competitor, then your metric for success likely isn’t going to be Rojas right or a POS or whatever the data point Is that Amazon’s able to surface to you. But instead, it could be something more around share voice or maybe you’re tracking the level of investment for that reason. So something like percent of spend as a, as a into your total revenue, for example. And that can be a way again of repositioning, how you strategize success and how to create your campaigns around what that strategy is.
Eric Stopper 9:28
Okay, lots of digging into there. So, campaign structure. This is so funny, right? Because Amazon is typically just one of the channels that we sell through. And we all take it so seriously, because this is our world that we live in and we’re super into the details. Some people are just like, I’ve got my automatic and I’ve got my manual and whatever some people will do like, like there’s usually Super Bowl campaigns that I’ll see that people set up anyways. campaign structure My understanding is that and please correct me if I’m wrong because I, I am also the student here and I, I manage my own accounts, but we have a team of account managers who are really in the weeds on all of this. But my understanding is that we have discovery campaigns where there’s, it’s kind of a blast, right one of them is automatic, you let your automatic campaign just kind of like put you in different places on all over Amazon and waste your money at about a 30% loss to find more keywords. And then I typically will have a manual discovery campaign as well, where I do broaden phrase matches. And I’m, and I’m going through and I make a list of all the different ways that I think somebody could search for my product and I put them in there and I set my budget at like 20% of my total spend, and I just let it ride. And then on those discovery campaigns inside of them, some of them are Just like keyword data from Cerebro, right, and I put a date on it, and some of them are. Oh, geez, what’s another one that I have? Oh, I’ll do hobbies. Right. So I saw earplugs that attach to glasses. So if you do woodworking, I have a woodworking ad group. And if you do construction, I have a construction ad group. And then on the flip side of all those things, I have a manual performance campaign, where I’ve run my advertising reports on my discovery campaigns, and I see the ones that are giving me the maximum amount of impressions and the maximum amount of revenue, and I put those into the campaign. And I just smash the bid button as hard as I can and try to populate my stuff to the very top. It sounds like the level of granularity is still missing from my particular strategy. So is there a better way? Is there a perfect campaign structure? What do you think?
Megan Harbold 11:54
Yeah, I think you know, there’s a ton of opportunity to Think about your campaign structure specific to your goals and your business and your product line. Right. So I think what we’re seeing if we talk in very high level generic terms around what strategies, those who could say are very mature in the space are doing is they’re starting to get much more granular in terms of singular A’s into singular keyword type structures, to really, again, maximize the control of what data and intelligence you’re getting from that performance to better optimize. This also is a really great way and more refined. You can be in those structures, the better automation tools, like a Kenshoo, for example, are going to work, right? Because it’s very, very clear and linear, the path in which you’re headed. To get there, though, you brought up really great points, right? What about automatic campaigns? What about keyword discovery? What about these more higher funnel, behavioral types, behavior behaviors that you want to target? I would still say there needs to be some work to understand what sort of what products you hypothesize fit best in those scenarios, and D duplicate them out of your performance campaigns, if you’ve got the top 10 items in your assortment that you’ve identified as the best performers in terms of, you know, highest rating and reviews, always in stock, never have any eligibility issues, no three p seller, competition, anything like that, you know that if you surface this product, it’s going to get a click and or a conversion, then that shouldn’t be the product that’s surfacing very generic.
Eric Stopper 13:36
Right, right. So get out of your auto
Megan Harbold 13:39
Exactly. So I think there’s there’s these two concepts of exploratory right being very agile being very, almost kind of willy nilly to make sure that you’re not missing any of those whitespace opportunities, but 90% of your spend 90% of your Well, I’d say probably closer to like nine 8% of your performance Right is going to actually be coming from this 90% of your ad structures that are very manual focus as much as possible an exact match and as much as possible to that singular asen to keyword strategy.
Eric Stopper 14:13
But will you talk about agility? Yes. And I’m thinking through this, right, like, I’ve got all my skews. I don’t know, 250 skews. And I have to set up a campaign that has ad groups for virtually every product. It seems like I’m adding lots and lots of times for me to click. At what point right, this is kind of a multi dimensional question. At what point do you have to automate some of this? You know, like, at what point should someone say Okay, I’m ready for Kenshoo you know what I mean?
Megan Harbold 14:54
Yeah, I mean, to be honest doing this even if You aren’t taking this advice, right? If you aren’t looking at things being very product specific, and specific to your goals like this, right? Even if you think about the generic strategies of, you know, General versus branded versus conquesting, right, that’s three strategic campaigns per keyword, either per keyword or per keyword grouping. Right. So if you want to say your keyword grouping is that behavior you mentioned, right woodworking, I probably have three different levels of strategy. So every single time I’m creating a campaign, at minimum, I’m creating three campaigns. So to be honest, you’re you’re pretty maxed out on meeting, you know, automation pretty
Eric Stopper 15:42
quickly. And if it is every time you create a campaign, you create three campaigns for that grouping, or is it three ad groups inside of that campaign?
Megan Harbold 15:51
It could be one or the other, right? It really again comes back to your whole list of goals are you looking to really maximize To share voice for woodworking, aka, I’m going to have a campaign that focuses on every single possible strategy point in the funnel with very specific reasons attached, or am I literally just kind of looking for generic keyword mining, right. And again, you can be very open, less structured, because you know that every other day, every week, at a minimum, you’re gonna go in and dig into the data and refine that into those more strategic campaigns. So it’s, it is a little bit of a, an all over answer. But to be fair at all kind of goes back to that foundation of what is your strategy, what are your goals? And do you have enough intelligence to define what that mapping strategy should be? Because often, people don’t, right. And even again, when we think about foundational structures, you know, we’ve audited several accounts in the past where, you know, people look at sponsor brands as a strategy. And they’re not even digging up. You know, they’re not even creating structures around sponsored brands for branded sponsored brands for now. It’s just, they’re just using
Eric Stopper 17:16
brands as a Hey, like, this is good. We’re gonna Exactly, yeah,
Megan Harbold 17:21
exactly. So again, I think there’s all levels of intelligence in this space, there’s all levels of access to data, there’s all levels of capability, right? If you’re using a Kenshoo, it’s very easy to do this type of work. If you’re not using Kenshoo, maybe not so much. So there’s definitely challenges across the board depending on who you are and where you sit in the organization. But, you know, as I mentioned, I think the the benchmarks that we’re seeing and, and those who are performing extremely well across the board in terms of our Kenshoo clientele are definitely taking the approach of as specific as possible in their structures, and creating those structures to really maximize the intelligence. They’re getting back into performance, and then automating off of that, to really kind of again, make sure there’s no lost opportunity on board. So
Eric Stopper 18:09
if this at all confuses you, and makes you wonder if you’re doing everything wrong, go talk with Kenshoo. Right? Like they’re auditing accounts that are looking at clients all the time, come talk with us, we’ll help you out. I can dig into this with and for you, we just have to run a couple of reports. And it sounds like I kind of follow this hit by a bus model where if I were to just disappear tomorrow, Could somebody get into the account and run it and see like, oh, it makes a lot of sense that he’s doing it this way. Yeah. And it sounds like if I have my campaigns separated by the type of targeting or the type of messaging that I’m doing, and then my ad groups are separated by some sort of, you mentioned a behavioral category. Like I had woodworking, for instance, that would be really helpful to just have someone say, Oh, cool. This is my woodworking product. These are my woodworking ads. And this is the efficiency that’s coming from them. And then these are my goals. Where do you think goals should live for an organization? Because you can’t really put a goal into Seller Central, can you? Can you put them into Kenshoo?
Megan Harbold 19:25
Yeah, so there’s a, that’s a great segue. I think, you know, if you’re hit by a bus tomorrow, right? There’s a lot of mechanisms that, you know, can you in particular provide you to help keep things structured and organized without touching, right? You’ve got things like our dimensions and categories, aka very customizable labels. So if this is a campaign that’s supporting one of my top 10 agents, for example, I can label it as such, and I have very quick and easy ways of filtering and understanding exactly what’s happening with my top products, or this strategy or this strategy. You can also honestly be off of those labels, and this is where again, if you’re hit by a bus tomorrow, and I have my account set up properly, no one should really have to touch it at all, because I’m creating automated actions based on goals that I have set. And it will automatically optimize up down bids, turn things on, turn things off, etc, based on what those goals are. So, absolutely labeling what that goal is and setting up your automation around those goals, helps kind of prevent any kind of issue like that in the future. And again, it’s completely scaled, it’s making these changes, you know, on the hour, every hour, or you could do it once a year. It’s really up to you and it’s up to whatever level of structure you have, right. If your structure is done well and you’ve got your labels in place, you’re good to go. That makes a lot of sense.
Eric Stopper 20:47
I’m going to steal from another person that we had on the podcast a couple of months ago. He told me that he views every listing as a business, it’s a separate business altogether. It’s a different tradeshow booth. It’s a different drive thru window. Do you view kind of the same thoughts is this is this what this is moving towards is saying, you have you have 1000 skews. But these 10 are the ones that can actually push the rest of them. Is that the idea here?
Megan Harbold 21:22
Absolutely. I think what number that is right? Is it 10? Is it 50? Like that comes out of your analysis and your intelligence about how your retail is working. And you need to make sure it’s not even just about those aces at Amazon, right? It’s how those aces support your organization and understanding that broader perspective. And once you do, absolutely, you’re not going to focus on all thousand aces more than likely because your consumers aren’t focusing on all aces, it’s not going to be possible for you to win the top 10 spots for a single category turn just because you have 1000 agents. It’s not how consumers are searching and how it works. So I think absolutely, it’s about prioritization. And that stems from having the right level of retail data to give you that insight and then the structure in place to prove out that you pick the right reasons, right. And I do think, you know, we talked a bit about measurement. And it’s important to note that measurement isn’t just advertising metrics, right? Understanding your costs or your eyes and understanding your click through rate. Those are all very important things for the day to day optimizations. But again, in terms of this concept of retail, health and data intelligence, it’s about how your advertising is impacting your broader brand, your broader store, aka that asen. Is that isn’t entirely coming like the only sales you’re getting entirely coming from advertising, or is it also boosting your organic ranking? If it is boosting your organic ranking? Where’s that point of no return? When can you stop maybe advertising as much and still maintain that flywheel factor that organic ranking. That’s what we were talking about in terms of really, truly having right intelligence in terms of your retail health and how it is applying back to your advertising. I feel
Eric Stopper 23:11
I feel very retail unintelligent, based on what you just said, right? I have no idea what the point of diminishing marginal returns is for even my branded advertising campaigns. Know what I mean? So is there? I don’t know, is there a handful of metrics that somebody could pull right now to kind of get the first checkbox started to know which one should I focus on? How should I adjust my strategy? Am I doing a good job? Where would you guide everybody to in their seller Vendor Central accounts to find kind of the first breadcrumb on this trail to success?
Megan Harbold 23:48
Great question. I would say the easiest and kind of most easily attained metric if you’re talking about one to start you On this path is simply share voice or share search. Unfortunately, that’s not something that’s super readily available in vendor central or Seller Central, right, or even the advertising platform, it’s going to be surfaced through, you know, a partner like Kenshoo, or on a little bit of a more manual basis. But that is going to be the easiest way to truly understand the share of the page, right? If I’m looking at this search, let’s use where we’re getting right. I’m showing pretty frequently position three in the organic spot, it’s not paid. Not only will I understand that, but I can understand the competition around me right, and the competitor on Amazon, right? It’s not necessarily a brand competitor, it’s by placement. So if I want the spot number one in paid indoor organic for woodworking, I now know who I have to displace. That’s my competitor. So that one metric that one kind of dashboard view really gives you a sense of how to start thinking differently about where to invest heavier pullback in Because you’re already there, that kind of thing. It can get worlds deeper. And it’s still very much an emerging practice, right? So there’s a lot of models coming out. There’s a lot of ways of thinking about this. How to really, you know, fit this into your specific brand and your goals is always gonna be nuanced. But, you know, sure voice is a great, great starting point.
Eric Stopper 25:26
Now, for the folks that have 10,000 skews, right, maybe they’re all loaded. What do you say to them?
Megan Harbold 25:39
I’d say, you can do a pretty down and dirty retail health audit, even for 10,000 skews and start there. And that is where, again, it might take a little bit more time, you might have to partner with someone to do a project such as you know, Buy Box Experts or ourselves and really kind of pool all your data together to get this to this point. But ultimately, if you look at your availability, you look at your profitability, you look at your advertising eligibility, and a couple other performance metrics and you pull them into a scoring system, you can quickly take 10,000 skews to your top 10%. Right now you’re working with, you know, a much smaller portion, you can start to look for trends in terms of the types of category or the types of, again, consumer behavior, how they are looking for, and we’re interacting. And so you start to bring in those, click through rate and conversion rate type metrics, and you start to refine it a little bit further a little bit further, till you get to that point of, I’ve got my top 20 that I’m always going to win, I’ve got my next 20, I’m going to try and boost and get better but maybe there’s something like availability that is going to add a little bit more risk into this grouping. And so now I can go and engage my supply chain folks to make sure that in order for me to push them up in order to mitigate my risk in my top performers, I have the backing of these other functions. within my organization to help me get there. So this is a I mean, an assortment prioritization test, if you will, is a huge important starting point to really refine what items you should even care about.
Eric Stopper 27:13
If you need help with this listener, come and talk with me. I got you. We’ve done a few analyses like this over the last couple months, just helping people understand like, and we, you know, we call it cluster analysis, call whatever you want. It’s just it’s just filtering all your data and coming up with the lowest hanging fruit. Let’s Let’s become farmers and roll up our sleeves a little bit and get down to the bottom of it. Megan, is there any other advice that you have for brands who, who may be looking at best practices for Amazon advertising success?
Megan Harbold 27:51
I think you know, just to sum it up, what we typically see what we continually hope to bring to our customers is getting smart, aka digital and data intelligence, making sure you have the right data and know how to understand it and use it. I would say number two is that proper investment and that doesn’t just mean more budget or more ad spend. But it means better use of that budget in that ad spend. So things that we just talked about in terms of going after the right products, and maybe D prioritizing other products are really great ways to be more efficient and effective. And then I’d say third is to be agile. Make sure that you’re taking a test and learning approach. If you’ve got a lot of, you know, automatic campaigns start to learn how to make things a bit more control, but also know when to kind of keep things flexible, understand within your organization, how others can help you and make a bigger impact. And so that’s it.
Eric Stopper 28:47
Absolutely wonderful. Megan, thank you so much for coming on the show.
Megan Harbold 28:50
Absolutely. Thank you.
Eric Stopper 28:52
To finish today’s podcast I want to share some final thoughts for large brands who are seeking to wholesale product to a trusted Amazon reseller. We at Buy Box Experts are big fans of the team over at Pattern. They’ve helped hundreds of large brands to capitalize on the Amazon channel while also helping implement channel governance best practices that allow the brands to have consistency across all their sales channels. For more information, go to pattern.com and reach out to their team there and they’ll be able to help you. We hope to see you soon on the Buy Box Experts podcast.
Outro 29:23
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