Your Guide to Amazon Advertising Strategy

December 17, 2020
By The Badger

If you’re going to be successful in Amazon PPC, you need an advertising strategy custom-tailored to your business goals.

If we can get philosophical for a second, your perception shapes your reality. The way you view and think about your campaigns is one of the biggest contributing factors to how those campaigns perform.

Some Amazon PPC “gurus” present Amazon advertising tactics and goals as one-size-fits-all, and they tell you that the single most important thing to focus on is getting a single-digit ACOS. All businesses are different, so all businesses have different Amazon advertising needs, and a goal that works for one company might not work for another.

We get it; anything that promises a guaranteed silver bullet is enticing, but remember: if it sounds too good to be true, it probably is. Every campaign is different, and there are so many different variables in Amazon advertising that there’s no one solution that works for every campaign.

If you focus only on getting an ultra-low ACOS, you might get it, but the rest of your metrics could suffer as a result.

To determine what strategy is best for you, you need a full picture of where you are and what your goals are. Where your product is in its life cycle, who your competitors are, your industry, etc. all play a role in how you should approach advertising on Amazon. Ask yourself where you are in your growth. Your answer will inform how you should direct your Amazon advertising strategy.

First Stage – Pre-Launch

The first stage is typically a solopreneurship, side hustle, or small business. You’re in this stage if you’re just getting off the ground and trying to get those first few orders. Your main goal is to gain traction and get a consistent number of sales per day so you can continue to afford inventory and other operating expenses.

Because of this, ACOS shouldn’t be your biggest concern at this point. In fact, your ACOS should probably be higher than what you might consider to be a good ACOS. Making sure you’re getting those orders takes center stage here.

In terms of how this relates to your Amazon advertising strategy, focus on your organic ranking. You won’t get any traction or attention from customers if your product isn’t on the first or second page of results.

When setting up your PPC strategy, focus on a few main keywords. Typically, your budget won’t be more than $5,000 per month, so you need to make every dollar of that budget count. Wait to experiment with different targeting options until you have enough budget to do so.

Simplicity is the name of the game for novice Amazon sellers. Start with an exact match campaign for your most important 5 to 10 keywords. These are the keywords where you’ve focused when optimizing your listings for SEO. If these keywords turn out to have crazy high suggested bids, start with lower-tier keywords with fewer impressions for the sake of raising your rankings without using too much of your budget.

Stay away from auto campaigns at the very beginning. If you end up appearing for a lot of keywords all of a sudden, that will raise more than a few eyebrows over at Amazon HQ.

First Stage – Post-Launch

Once you’ve launched, you’re placing well organically for a handful of keywords, and the first few reviews are starting to arrive, it might be the time to hone in a little more on your profitability.

Amazon Sponsored Display Ads are an absolute must-have if one of your major goals is boosting your impressions. Using Sponsored Brands and Sponsored Display in tandem with Sponsored Products has compounding effects on your impressions for new products, allowing you to reach more people in less time. This is key to helping you springboard from being an industry newcomer to an established player.

Another excellent reason to use Sponsored Display Ads is to increase your upper-funnel appeal. Not only can you retarget people that have viewed your products, you can also target people who have viewed products similar to yours or used search terms relevant to your product. If you run Sponsored Display and your competitors don’t, you’re capturing more people’s attention and drawing them down the funnel.

Because these ads don’t display on Amazon’s Search Engine Results Page (SERP), product display ads tend to have slightly lower conversion rates. For that same reason, these ads tend to be less competitive than Sponsored Brand and Sponsored Product ads, so your CPCs and overall spend will likely be less than your account average.

Lastly, because you can place your ad under your competitor’s listing, you can put your best products against their best products. However, be careful. Make sure to match your ads where you have a real chance of getting clicks and beating out the products on Amazon.

Once you’ve really started to pick up some momentum and boost your ad spend significantly, you start to approach the scaling stage.

Scaling with Amazon Advertising

The second stage is an intermediate spot where your sights are set on scaling. Your budget is typically anywhere between $5,000 and $25,000 per month. You’re finally in the position where you can start to give the established competitors in your category a run for their money. If this describes where you are in your growth, now’s the time to start experimenting with different ad types and campaign types.

Start working on your Sponsored Brands ads and at least consider dipping your toes into Sponsored Display. You should also start working with auto campaigns with broad and phrase match.

What’s really exciting about this stage is that your increased ad spend gives you much more data and much more room to move around in your market. You can also play with different targeting types, try split testing… the list goes on and on.

The name of the game here is diversification. If you put your ad spend into multiple different types of campaigns and ads, that lessens the chance of your competitors finding a vulnerability in your marketing strategy. It also makes it much easier to adapt to unforeseen changes in the Amazon PPC landscape.

With all these new tools at your fingertips, it’s important to keep a student mindset. The metrics you see for different ad types and campaign types might be different than what you normally see in your manual Sponsored Products campaigns. Stay flexible and be prepared to adjust your perspective when viewing and employing these new strategies.

If you spend enough time scaling upward and establishing yourself as a key player in your industry, you can work your way up to being a powerful, large-scale brand.

Brand Building with Amazon Advertising

You’ve officially reached the big leagues– you are now an established brand in the world of Amazon PPC. You regularly spend $100,000 or more per month in advertising.

Here, your goals are a little less clear than they were before. You knew what you wanted to accomplish when you were launching and when you were scaling, but now there are so many different directions where you can take your strategy.

For many Amazon advertising managers, the response to this choice paralysis is a return to simplicity. They want to wipe their slate clean and focus only on simple, metrics-based goals, like getting a specific ROAS or ACOS. While keeping an ideal ad cost of total sales ratio is a good idea, having strict, metric-based goals oversimplifies your strategy.

What a lot of larger brands don’t realize, especially if they don’t have much prior experience with Amazon Advertising, is how incremental you can get with the platform. Amazon’s variety of different ad types, targeting options, and more gives you the ability to be incredibly deliberate with where and how you scale. Use that to your advantage wherever you can.

Be sure to create personalized goals for your different segmentation groups that reflect your goals for each segment. Like we said before, one-size-fits-all strategies don’t work, and that’s equally true for different campaigns or segments within the same account.

While you may experience a lot of pressure to keep growing at all costs, don’t be afraid to take your foot off the accelerator for a second. There is still plenty of room for you to launch exploratory campaigns. The marketplace might have changed since the last time you ran experimental campaigns, so it’s a good idea to keep experimenting in order to keep pace.

This is also a good time to take a look at portfolios and take note of how your metrics compare to those of your competitors.

Some businesses at this stage are already well-established in the retail space but are just getting started on Amazon. If that’s the case, be sure to keep an open mind and be willing to look at your Amazon Advertising in a new way.

Key Takeaways

What strategy to employ for your Amazon Advertising has a lot to do with where your business is in its growth.

If you’re a solopreneur or just starting out in the world of Amazon PPC, start small and hone in on a few winning keywords. Profitability is king because it helps you ensure that you can keep operating. Aim to hit the first page or two of organic results for your top keywords.

Once you’ve cleared that launch phase and are focusing on scaling, your main focuses are differentiation and experimentation. You have more ad budget at your disposal, and now is the time to use it in a variety of different ways.

If you’re a well-established brand with plenty of ad spend, you’re never too big to return to your roots. Continue to explore and experiment. Keep tabs on what your competitors are doing. If you’re already well-established outside of Amazon, keep in mind how Amazon is different than marketing avenues you’ve used in the past, and use those differences to your advantage.

Keep in mind that at no point does your strategy have to be set in stone. You should always be open to changing your strategy or tactics to be a better fit for you. No matter where you are in your business’s journey, never forget to keep experimenting and keep learning. The more you know, the more you’ll grow!