Amazon Marketing Services (AMS) was designed to help vendors drive product discoverability and sales in the marketplace. It’s a great way to grow your sales on Amazon and capture high-intent search traffic. Vendors on Vendor Central can also manage sponsored products, headline search, and product display ads; while sellers on Seller Central can run sponsored product and headline search only.
But with any advertising program, running an advanced strategy is imperative. Competitors emerge daily on Amazon, making improving your brand’s visibility and product reach more challenging. That’s why it’s important to understand the nuances of AMS, have search marketing expertise, and possess the necessary tools and resources so you can properly analyze your profitability.
We know that managing AMS is a lot to take on, so here are seven ways you can improve your campaigns to drive better performance and overall profitability on Amazon:
1. Know Your Goal
Stacking hands on specific KPIs and ensuring all members of your Amazon team and/or agency understand those business goals is the foundation for success. Knowing your goal means understanding your profitability on Amazon, factoring in seller fees, shipping, advertising costs and actual product cost. It also means making decisions on what ROI level your business is comfortable with, and managing your ad program to that goal. Without this, you can end up losing money due to an inefficient program, or even leaving money on the table and not maximizing potential.
2. Optimize Your Product Content
Your product listing content can impact your conversion rate (CVR) greatly, and having an efficient ad spend means focusing on the shopping experience after the ad click. Factors that will influence your conversions include titles, descriptions, images, bullets, A+ content (vendors), enhanced brand content (sellers), and reviews. Improving CVR not only increases your revenue, it allows you to scale advertising spend by reinvesting saved budget to expand your campaigns. At Adlucent, we’ve seen an average of 25% increase in sales from an advertising program by optimizing product content in conjunction with the paid strategy.
3. Use Headline Search Ads
Headline search ads appear at the top of Amazon search results and typically showcase your brand along with a few featured products. They can send traffic to a brand store, or to a custom URL for the featured products. Headline search ads present an opportunity to target competing brands, defend your own brand terms, and showcase your products for broader, generic keywords. They also allow you to test components of the ad, including headline, image, ASINs featured, and landing page, to hone in on the best performance. Almost every advertiser that we work with had competitors conquesting their brand terms when they first started working with Adlucent, and by launching strong headline search ads we’ve been able to protect our clients’ brand terms as well as increase traffic and sales. We typically recommend spending about 30% of your budget on headline search ads (with the remaining budget being split 50/20 between sponsored products and product display ads).
4. Build An Offensive & Defensive Strategy
Having a clear offensive and defensive strategy in place, and knowing your goals for each, will help you drive discoverability and accelerate your Amazon program significantly. We typically recommend dedicating about 40% of your budget to defense, targeting keywords directly related to your brand, and about 40% to offense, going after keywords you would like to own, including competing brands. The remaining 20% is typically reserved for harvesting and testing. One of our clients was able to improve revenue by nearly 20% by implementing headline search ads to defend their brand terms.
5. Leverage Automatic Campaigns
Automatic campaigns allow Amazon to serve your sponsored product campaigns to all relevant customer searches based on product information. While some advertisers are hesitant to allow automatic campaigns because of the lack of tight keyword control, they are actually beneficial in providing valuable data. For example, you can mine queries that pop up in your automatic campaigns to find valuable terms your potential customers are searching for that you may not have considered previously. We recommend starting with automatic and then using that data to build manual campaigns with more precise targeting.
6. Implement A Short Tail and Long Tail Strategy
Having both short tail (ex: Alen Air Purifier) and long tail (ex: Alen BreathSmart Fit50 White Air Purifier) terms in your program allows you to send shoppers to the correct destination, as well as continue to funnel your keyword traffic. We recommend sending short tail traffic to your brand store, where shoppers can browse all of your products and learn about your brand. Long tail terms should be sent to either a specific category in a brand store, or a product page. One of our best practices at Adlucent is to invest the time building a robust long tail strategy. This takes time and resources so many advertisers neglect to do this, but the revenue potential is huge because there is less competition on longer tail terms, and we typically see higher conversion rates. One of our clients, a power sports equipment company, came to us with an AMS program that had plateaued, and were having difficulty scaling on Amazon. One of the things we implemented was a long tail strategy, capitalizing on heavy product SKU based searches, and we earned a 22% increase in sales as a result.
7. Analyze Your Data
We often hear from brands that they are challenged with measuring the success of their AMS campaigns because analyzing the data is cumbersome, time consuming, and not always done with accuracy. Campaign reporting is separated by ad type, and is also separate from the rest of the business reports, so gauging the overall impact that your ads are having on your entire marketplace is even more difficult. For this reason, you should evaluate not only the direct ROI on your ads (based on ACOS or ROAS), but also look at total return on ad spend—which is your ad investment compared to your overall product sales on Amazon. You might find it easier to use an agency or a third party reporting tool to pull in your data and help you analyze this in a useful and efficient way. Adlucent’s proprietary Amazon reporting tool pulls in your product margins at the SKU level, sales performance across both 1P and 3P, as well as from your advertising campaigns, to provide a true profitability analysis for you on an ongoing basis. This will help you examine your performance and margins across all of Amazon, and allow you to make better business decisions and measure success.
There are many factors to consider when investing in advertising in any channel, and Amazon is no different. We hope these tactics give you a good start on evaluating your current program and improving performance. If you want to chat about how Adlucent can help grow your program, contact us for a free Amazon consultation and AMS review.