The Inner Workings of Advertising on Amazon

The Inner Workings of Advertising on Amazon Can you imagine a month, a day or even a week without being online, browsing the Internet? Probably not.The technology has developed so much over the last couple of decades that we simply cannot spend a day without being influenced by the online media. (Unless we want to slow down a little, and distance ourselves from the hustle and bustle of the online content.)And, what can you do on the Internet? Well. practically anything. Everything is just one click away and you do not even have to get out of your chair. With the increase of the pace of the society today, and the hectic lifestyles people lead, the practice of completing your obligations online.Think about the aspects of your life that have already became digitalized. You do not spend time going to the video club and renting a movie, you are available to pay your bills through the smartphone applications or online banking, you are even getting products delivered to your doorstep.Shopping online saves time and leaves you with som e to spare, and spend it pleasantly with your family and friends.WHAT IS AMAZON?When you think about online shopping, what platforms come to mind? There are a variety and the studies and market researches show that the most affluent online marketplace is the Amazon. Amazon.com established itself as the number one platform for effective online purchasing.The reason for this is because it offers a great range of products by a great many sellers. You can buy household items, clothes (even high fashion), sports equipment, building materials, and many more. What it does not yet offer, are travel arrangements, cars, event tickets.What differentiates Amazon from other retailing websites is that Amazon has their own products they manufacture under their own label, dabbling in publishing and video making as well Amazon Kindle, Kindle Fire, Prime Videos, and Amazon Echo.WHY SHOULD YOU ADVERTISE ON AMAZON?Why is this important? When you are online, looking for things to buy you are exposed to numerous ads in a variety of forms.So far, the two biggest advertising platforms are Google (AdWords) and Facebook Ads Manager, but Amazon is becoming a fast-rising threat to both companies due to its unique position as a marketplace and an ad platform at the same time.Google and Facebook base their revenue on ads only, but Amazon has the upper hand in terms that it is the last step in the online purchasing process which makes up for a go-to position for ad placement, and their revenue is based on that purchase not solely on the ads.However, the market studies show that Amazon has a 139% increase in ad revenue year-to-year.Amazon is becoming the search engine for buyers as the majority of them go directly to Amazon since they are probably going to be redirected to it from any other search engine anyway.Another edge that Amazon has over the other advertising platforms is that keeps track of not only what the customers search for, but of what they are actually buying.All Amazons tran sactions are performed through Amazon itself and are never directed to the sellers website.HOW DO YOU GET STARTED?First of all, you need to have a professional sellers account. You can sell in one of two ways. You can sell to Amazon and sell on Amazon. Selling to Amazon is an invite-only option resulting in Amazon owning your product and managing the sales, cost, and advertising.Selling on Amazon option comprises over a half of total sales, it makes up for more work since you have to deal with pricing, advertising, and shipping yourself.However, it gives you control over those aspects, a potential for adjusting prices, and for marketing that suits your needs, and this is what we are focusing on.HOW DOES AMAZON ADVERTISING WORK?The purpose of using Amazon ads is to increase the visibility of your product in order to boost sales. Amazon is biggest shoppers platform which entails a large number of sellers, so you need to advertise with the aim of separating your brand or your product f rom other similar items.Organic rankings may take time, and if your product is not a unique category it is much easier to get the competitive edge by paying for sponsored ads than to let the sales grow on their own. And even with time, you may be ranked lower on the search result list, as there are other sellers who invested in Amazon advertising.Your sales will not be as high if your product is on page 5 or 6, as when it is ranked somewhere at the top of page one.So, how do you achieve that? In order to help sellers advertise, Amazon created AMS Amazon Marketing Services, AMG Amazon Media Group, and APS Amazon Publisher Services, each of which as its own role in advertising with Amazon. AMAZON MARKETING SERVICES (AMS) AMS is created to specifically market your product directly to buyers who are ready to buy. They are visiting an online store not just randomly searching the Internet. AMS offers three types of advertising options, all of which are based on pay-per-click or PPC bas is. (Another term you can encounter is CPC or cost-per-click). It basically means that you pay for your ad each time a customer clicks on it (the cost you are paying for the click varies regarding the number and type of keywords you use, but it goes from $0.35 up to $5).PPC advertising is suitable for enhancing the visibility of your product for the desired customers, they are great for seasonal advertising campaigns like around holidays (Christmas, Thanksgiving, Valentines Day and so on) and end of season sales (which offer great deals for, for example, winter sports equipment at the end of winter season).Another occasion where PPC is crucial in Amazon advertising is when you are introducing a new product. Since products on Amazon are ranked by keyword history, and new products do not have that history, what happens is that they rank low and the buyers do not even get the chance to see them.Paying for sponsored ads will get them higher on the list, thus enabling the organic ranking to go up with time.WHAT ARE THE THREE AMS AD TYPES?They are found o top or on the bottom of search result list (even in the middle, mixed up with generically ranked products, if you are using your mobile phone), on the right-hand side or on the bottom of detail page for a specific product. They can further be subdivided into two groups- keyword based and those based on target placement.Keyword-based ad types are Headline Search Ads and Sponsored Amazon Products. They look exactly the same as any other search result in that category except for the sponsored sign above the title, which suggest that the ad is being paid for.Headline Search Ads, as their name suggests, are placed on the top of the search result list. This is a premium ad placement and you earn it by being the highest bidder on the keywords you need. They are great for including highly customizable content such as custom ad copy, images, and logos.It often allows for placing up to three products and can include sponsore d brands. They are based on keywords on a broad range, creating less relevance but higher exposure, leading to potential return buyers.Sponsored Amazon Products (self-served ads) are great for impression, shares, and conversion. They appear on top of the search result rankings, as well as on the bottom of the detail page of a specific product. (e.g. on the bottom of the detailed page of certain diapers, there will be a list of related items in the same category, those items are more often than not, sponsored ones).They are based on the more specific keyword which somewhat limits the audience, but it increases relevance so that the customers who click it know that they fund what they wanted to find.The third ad type is the one based on target placement, not entirely on the keywords. The Product Display Ads (premium ads) are placed on the right-hand side of the detail page of either your own or your competitors product, and they are in a form of a banner, which differentiates them fro m the other two ad types.They are great for cross-selling and up-selling your product, as well as for going head-to-head with your competitors. This happens because you can place them on their product detail pages. As a consequence, your ad will attract the customer to switch to your product, especially if you offer a deal, or you have a good competitive price for a similar product.You can also place it on a detail page of your product as an additional offer to what they are already searching for.E.g. Your potential buyer is on a detail page of the diapers you offer, but you do not only sell diapers, but you also sell other products that are connected to diaper use, for example, rash creams or diaper genies.What you would do if you decide to use product display ad is you would create an ad that takes your buyer to another detail page but for a diaper genie?Even though they are both found on the detail page of a product and the products do have a meaningful connection between them, note that it is not the same as the sponsored product. In this example, a sponsored Amazon product ad would be another type of diapers, not a completely different category of product that relates to the one being looked at.HOW DO YOU BUILD A KEYWORD HISTORY?We have already mentioned the notion of keywords regarding the ranking of and the relation they have to the ads. When buyers are searching for a product on Amazon they type in the words in the search box that are relevant to what they are searching.Based on those words they get a list of related products. Some of the words thy type are more and some less relevant, some do not even get taken into account.It is of high importance that the sellers know how to use the keyword search to their advantage, and create an ad with as high accuracy as possible.If you are a novice in the Amazon advertising practice (or advertising in general) you might consider it smart to start small, advertising a single product for a test run of a week or two, and follow the statistics of how your ad is doing, and then refine the parameters of your ad in order to get the desired exposure and sales boost.There are two ways of choosing keywords for your ad auto and manual. Some advertising consultants suggest that an inexperienced seller should use the auto option because the Amazon will generate related keywords for the product based on other similar products that are already on Amazon. They also suggest that the number of keywords should be about 25 to 40.However, Cherie Yvette, the founder of The Urban Cowgirl, a digital agency specialized in helping entrepreneurs place their ads online (In 2016, she refocused her attention only on Amazon ads), advises even the new sellers to use manual option for keyword selection.She says it is advisable to start with 10 (not more) keywords based on your own research since no algorithm or computer program can know your product better than you, follow the progress and, after studying the reports, fine-tune your search parameters.Yvette emphasizes that advertising is not linear and that placing ads on Amazon platform will not get you an immediate sales boost. Patience, research and redefining is the key to a successful Amazon business.Building the keyword history means that the words you put on your keyword list should lead to your product, those that do not help that process should be taken out, and replaced with new ones. Strong keyword history creates a good organic ranking which, in turn, leads to better exposure.So, how do you pick good keywords? Take into consideration these three parameters, and you should start on the right foot.Start with searching for a product similar to yours, pick at least ten of the highest ranking ones and compare their titles. What keywords can you see in the majority (preferably all of them)? Those are the keywords that you should definitely include in your own list since they already have a history and relevance that can relate to your produ ct.Use an Amazon keyword tool to help you generate some more words related to your product. The words you get can be broad, phrase or exact. Pick those from the middle range or pick some phrases, as they will target your product better. Later, when you have spent some time reviewing the list, and following which words are useful to you, you can start adding more of the exact words to describe your product.The third aspect you should think about is relevance. How do you pick those words? Think about what you consider relevant to your product, not what is generally considered relevant to your product. Think in the direction of color, material, and so on (modifiers such as soft, red or cotton..)Recently, Amazon has added a negative keyword option, and we strongly advise you to use it as it helps you target more efficiently. Lets go back to the diapers example. Imagine that you are selling diapers for adults. What words should be in the negative keyword group?Words like children and bab y and so on, so that your potential customer does not get swamped by baby diapers, making their search less relevant for them.Pay attention not to try to trick the customers by adding words that are not relevant. You should deliver what you say you would, otherwise, your review can be really bad, and that decreases ranking.AMAZON MEDIA GROUP (AMS)AMS makes it possible for advertisers to get to the potential buyers all across the Web, Amazon Kindle and Kindle Fire devices, as well as Amazon websites and apps through the AAP (Amazon Advertising Platform).So, what is the difference between AMS and AAP? AMS targets the people who are already actively shopping on Amazon, as they appear in search results and detail pages. ASP ads appear on the third-party websites with the role of trying to attract audience who is not actively trying to buy at that moment.The process collects information from your online searches, targeting you on different sites when it notices that you are active, wheth er you are currently on a website that is related to your point of interest or not.AAP display ads have high impression volume as they reach millions of people. They are not as precise as search ads with AMS but are far more successful in creating brand awareness.The process collects information from your online searches, targeting you on different sites when it notices that you are active, whether you are currently on a website that is related to your point of interest or not.Both advertising strategies have their upsides and limitations, but if used together they create a comprehensive Amazon marketing strategy and are a powerful tool for increasing sales. They cover each others weaknesses and complementing the strengths.AMAZON PUBLISHER SERVICES (APS)APS works based on UAM (Universal Ads Marketplace) and TAM (Transparent Ads Marketplace) is a cloud-based header bidding option which enables online publishers and ad agencies improve their ad revenue. It provides the bidders with an environment that is not biased, and the highest bidder gets the ad placement.In addition to that, TAM offers auction transparency, Decreased Latency (site content loads faster), an easy, one-time integration (only one set up with APS), unlimited demand (and it is free)It is a relatively new feature Amazon advertising offers (starting from 2016, and at the beginning of 2018 the program reached some European Countries), so we are likely to witness an improvement in range and functionality.[vimeo 228095628 w=640 h=360]CONCLUSIONWith fast-growing e-commerce, it is understandable and expected that the largest online selling platform would aim for a part of the advertising niche as well.The Amazons unique position as both an advertising and a retail platform gives it an edge over other advertising platforms in terms that Amazon does not need to collect data about what is on demand, it already has them since all the transactions are done through it.Your first step should be to conduct you r own Amazon market research in terms of keywords and apply that to your own product. Choose a piece that is your best seller and start by advertising it, and later broaden your campaign to different products.Hopefully, this article helps you to better understand how advertising on Amazon works, and help you position your brand and product taking advantage of that knowledge.Advertising success is a slow process that requires patience, motivation, and persistence in order to be where you want to be in terms of your Amazon sales.