Welcome to the Amazon Advertising Basics Cheatsheet! As a new seller, navigating the vast realm of online retail can be daunting. This resource is your compass, simplifying the essentials of Amazon Advertising. Understand why advertising is pivotal, discover ad types, and learn to strategically structure campaigns.
Unlock Amazon Success: The Flywheel Blueprint
The world of Amazon is often likened to a Flywheel. The concept is simple: more sales velocity means better organic visibility and higher rankings, ultimately leading to increased total sales. But here's the catch—it can be a challenge to get this wheel turning.
When you kickstart your Amazon journey, organic sales might be slow because Amazon needs signals that people want your product. This means your product won't snag a prominent spot on the results page.
So, what's the solution? You need to create momentum on the proverbial Flywheel.
Advertising: The Game-Changer
Advertising is your key to manufacturing momentum. You have to let Amazon know that people want to buy your product. Sponsored Ads, in particular, are your go-to tool. They're fast, scalable, and the most effective way to drive traffic to your product page.
Launch Sponsored Product and Sponsored Brand campaigns to generate impressions, clicks, and conversions. As your conversions increase, so do your reviews and Best Seller Rank. The real magic happens when:
Your product climbs the organic search rankings.
Your Advertising Cost of Sales (ACoS) becomes more sustainable over time.
The Snowball Effect
Advertising sets off a snowball effect, not just boosting attributed sales but also organic sales. Your advertising spend transforms from a cost burden into a sustainable growth contributor to your Amazon strategy.
Understanding the Flywheel's impact can be tricky, but fear not! Perpetua offers powerful analytics tools:
Total Sales Analytics: Visualize how organic and attributed sales work together to boost your total sales.
Cost-Per-Click (CPC) Trends: Watch as the cost of advertising decreases over time when Amazon realizes people want your products based on specific keywords.
Ready to see your products spin in the Flywheel? Be bold with your advertising strategy in the short term, and you'll reap the long-term benefits. Let the journey to Amazon success begin!
Getting Started with Amazon Advertising
Introduction to Amazon Advertising:
What is Amazon Advertising?
Amazon Advertising is a crucial tool for your brand because it allows you to actively promote your products on the world's largest online marketplace. With millions of products available, standing out is essential to get your products noticed by potential customers.
Create an Account:
Without an Amazon seller account, you can't leverage Amazon Advertising. Creating an account gives you access to Seller Central or Vendor Central, where you manage your products and advertising campaigns. Click here to create your account!
Amazon Ads & Campaign Structure:
1️⃣ How Amazon Ads Work:
Understanding how ads work is fundamental. Your ads show up when customers search for products related to your keywords or view similar products. You pay only when they click, ensuring that you invest in actual engagement with your products. Learn more and get ready by taking Amazon's free advertising certification!
2️⃣ Types of Amazon Ads:
Sponsored Products: These ads appear within search results and on product detail pages, putting your products in front of customers actively searching for similar items. It's an effective way to increase visibility and drive immediate sales.
Sponsored Brands: Ideal for brand promotion, these ads give you a chance to showcase multiple products along with your brand logo. This helps in creating brand awareness and encouraging customers to explore your product range.
Sponsored Display: These targeted display ads work on and off Amazon, allowing you to reach potential customers even when they are not actively shopping. It's a great way to build brand recognition beyond the confines of Amazon.
Amazon DSP: For more advanced advertisers, Amazon DSP offers programmatic advertising that extends beyond Amazon. It enables you to reach a broader audience and implement sophisticated targeting strategies.
3️⃣ Campaigns vs Ad Groups:
Campaigns: Campaigns help you set overarching goals and allocate budgets. Whether you want to promote a specific product line or target a particular audience, campaigns provide the structure for effective advertising.
Purpose: A campaign is the highest level of organization in Amazon Advertising. It serves as a container for your ads, allowing you to set an overall objective, budget, and targeting strategy.
Scope: Each campaign can have a specific goal, such as promoting a product line, targeting a particular audience, or focusing on a seasonal promotion.
Flexibility: Campaigns offer flexibility in terms of budget allocation, allowing you to control spending at a broader level.
Ad Groups: Ad groups allow you to group similar products or keywords, making it easier to manage and optimize your campaigns. This segmentation helps in refining your targeting strategy.
Purpose: Ad groups exist within campaigns and are designed to group similar products or keywords together. They allow for more granular control and optimization of your ads.
Scope: Ad groups help you organize and structure your advertising strategy by grouping related items. For example, within a campaign for electronics, you might have ad groups for cameras, laptops, and accessories.
Granularity: Ad groups enable you to set specific bids, test different ad creatives, and refine targeting for a more focused approach within the broader campaign.
Keywords & Match Types
Keywords/ASINs: Choosing relevant keywords or ASINs is crucial for your ads to appear in relevant searches. It's the foundation of how customers discover your products. Keywords come in 3 different match types:
Your ad appears for variations, synonyms, and relevant searches, even if they're not exact matches.
Example: If your broad match keyword is "running shoes," your ad might appear for searches like "athletic footwear" or "jogging sneakers."
Your ad appears for searches containing the exact phrase or close variations with additional words before or after.
Example: If your phrase match keyword is "water bottle," your ad might appear for searches like "best water bottle for hiking" or "large water bottle."
Your ad appears only for searches that exactly match your keyword or close variants.
Example: If your exact match keyword is "coffee maker," your ad will show for searches like "coffee maker" but not for "best coffee maker."
Monitoring & Optimization, Targeting & Bidding:
1️⃣ Monitoring and Optimization:
Track Performance: Regularly monitoring key metrics helps you understand the effectiveness of your campaigns. It allows you to identify what's working well and what needs improvement.
Optimize Ads: Optimization involves tweaking keywords, bids, and targeting based on performance data. It's an ongoing process to enhance the efficiency of your advertising efforts.
2️⃣ Targeting and Bidding:
Targeting: Understanding your audience is key. Targeting allows you to show your ads to specific demographics, interests, or behaviors, ensuring your products reach the right customers.
Bidding: Bidding determines how much you're willing to pay for each click. Strategic bidding ensures a balance between visibility and cost-effectiveness.
2nd Price Auction: Amazon uses a second-price auction bidding model where advertisers bid on keywords, and the winner pays the second-highest bid amount plus a small increment. This promotes transparency, fairness, and cost-efficiency, as advertisers are incentivized to bid their true value for a click. Winning advertisers pay a price close to the bid of the second-highest participant, optimizing the use of their advertising budget.
Key Metrics to Understand:
Click-Through Rate (CTR): Percentage of people who click on your ad after seeing it. CTR indicates how engaging your ads are. A higher CTR generally means your ads are resonating with customers.
Conversion Rate: Percentage of clicks that result in a purchase. Conversion rate measures the effectiveness of your ads in turning clicks into actual sales. It's a crucial metric for assessing the impact on your bottom line.
Cost Per Click (CPC): Advertisers pay a fee each time a potential customer clicks on their ad, with the amount determined by the bid set for the targeted keyword in Amazon Advertising.
Advertising Cost of Sales (ACoS): Ratio of ad spend to sales generated by ads. ACoS helps you understand the profitability of your advertising campaigns.
Return on Advertising Spend (ROAS): ROAS measures the revenue earned for every dollar spent on advertising. A positive ROAS indicates a profitable advertising campaign.
Budgeting and Costs:
Budgeting: Setting a budget ensures that you control your spending on advertising. It's a vital aspect of managing your overall business expenses.
Costs: With a PPC model, you only pay when someone clicks on your ad. This ensures that you're spending your budget on actual engagement with potential customers.
Learn more about setting a budget here!
By grasping these fundamentals, you've taken a significant step toward maximizing your presence on the world's largest online marketplace. Start this journey and explore our other resources, join our Slack community, or get help from experts through chat support! Your dedication to learning these basics can unlock the full power of Amazon Advertising. And remember, Perpetua is here to help you through it all!
Article last updated January 2024. If you find this information to be out of date, please contact firstname.lastname@example.org