PRO TIPS

Chances Are, You’re Managing Amazon Ads Wrong: Here Are 5 Ways to Fix It

Amazon is quickly becoming a digital advertising powerhouse. In 2019, Amazon is projected to grow its digital advertising business by 50%, placing it just behind Google and Facebook in terms of ad revenue.

That means now is the time for retailers to take advantage of this growing marketing opportunity. With over 200 million shoppers who are open to product messaging and actively searching for their next purchase, Amazon Advertising can help retailers rapidly expand their marketplace revenue.

To elevate your Amazon Ad campaigns, keep in mind these critical steps. 

1. SET UP YOUR ACCOUNT For success

Before you can advertise on Amazon, you need to apply for a professional sellers account. Once your application is accepted, upload your product feed or match your products to existing Amazon Standard Identification Numbers (ASINs).
PRO TIP
Split your product quantity between Amazon and your e-commerce site. Then, Amazon can sell through inventory without impacting site sales, and you won’t need to update Amazon every time an item is sold on your site.
DIVE DEEPER
There are a few other important questions retailers need to ask themselves before they dive into Amazon Advertising. Here's what you need to know.

2. Choose the right ad format

Amazon offers three different ad formats: sponsored products, sponsored brands, and display ads. Each ad format reaches consumers at unique stages in the buying journey and can help retailers achieve different goals. Sponsored products are the most popular ad format and help retailers meet ROI goals. Sponsored brands, only available to registered brands, build brand awareness. Finally, display ads power retargeting efforts.
PRO TIPS
Start advertising with sponsored products to learn which products and keywords drive the greatest engagement on Amazon. Once you’ve gathered enough data, feature top-performing brands in the sponsored brand ad format.
DIVE DEEPER
Learn how to take advantage of Amazon's unique ad opportunities.

3. Win the buy box

Winning the Buy Box ensures retailers capture the sale over their competitors. Amazon determines who wins the Buy Box based on price, shipping speed, and fulfillment. Retailers with the best metrics win the Buy Box more often, driving greater revenue.

Retailers cannot advertise their products if they don’t win the Buy Box. To see which products are available for the Buy Box, check the Inventory tab in Amazon Seller Central. Select Manage Inventory and view the Buy Box Eligible column. Select Show When Available from the menu to see which SKUs are eligible.  
PRO TIP
Another way to increase your share of the Buy Box is by improving customer service metrics such as customer response time, customer feedback, and providing full tracking information.
DIVE DEEPER
The Buy Box plays a critical role in retailers Amazon marketing strategy. Learn how to increase your share of the Buy Box.

4. MAXIMIZE CAMPAIGN STRUCTURE

Retailers should create two types of campaigns to manage their Amazon ads–automatic and manual campaigns. An automatic campaign dynamically matches products with search queries based on product information. A manual campaign uses positive and negative keyword bids to drive traffic to your most valuable products. Use the manual campaign for branded and high-intent queries and automatic campaigns for new or unbranded traffic. Having both campaign types ensures you bid appropriately based on purchase intent. 
PRO TIP
Use negative keywords in the automatic campaign to filter out branded or high-intent traffic. This will funnel higher value traffic to the manual campaign.
DIVE DEEPER
Learn more about the nuances of manual and automatic campaigns and how to create the most effective campaign structure to meet your goals.

5. mANAGE YOUR COSTs

Make sure you understand your target Advertising Cost of Sale (ACoS) in order to set the best bid for your products. ACoS is your total spend, divided by the number of sales for a given time period. If you spend $10 for $100 in sales, you have an ACoS of 10%. Using ACoS, Conversion Rate, and Average Order Value, retailers can determine the ideal bid. For example, if a retailer’s target ACoS is 10%, their average conversion rate is 3%, and their Average Order Value is $60, the perfect bid for the product be:  

(.10)(.03)($60) = $0.18 
PRO TIP
Reassess bids on a weekly basis to account for delays in Amazon reporting and to ensure you have enough data to justify a bid change. Some retailers may make bid changes less frequently, depending on their volume of traffic.
DIVE DEEPER
Learn more bout bid strategies in our complete guide on Amazon Advertising.
For more insights on Amazon Advertising strategy and tactics, download our complete guide “What You Need to Know Before You Create Your First Amazon Campaign.”