The digital world has opened numerous marketing avenues for businesses, and successful online advertising is essential to any marketing strategy. While you need to match where you promote your products with where your customers are to get tangible results, there are some big names that almost every business should target. Facebook and Google are indisputably the top two – and Amazon has recently become the third top option for advertisements.
Google made nearly $23 billion in ad revenue last quarter, easily surpassing Amazon’s approximately $2 billion in the same quarter. However, that $2 billion is an increase of 129% from the previous year. Projections indicate that Amazon will likely go from earning 4.1% of the U.S. total digital ad spending in 2018 to 7% by 2020.
And sure enough, many companies are dedicating a portion of their advertising budgets to Amazon. Some are even moving away from search-based advertising opportunities like Google and transferring 50% or more of their budgets to Amazon. Most of these shifts are from consumer packaged good companies, though there is some variance.
What Makes Amazon Advertising So Appealing?
This change in advertising budgets isn’t without reason. Amazon provides various advertising types that can help you better reach your audience. Still, the real power in Amazon advertising is the audience that sees those ads.
Google advertising works because Google users are in a searching state of mind. This means that they want to learn more about a product, usually to figure out if it’s something they want to buy. And if they do decide to make a purchase, a well-placed ad will give them a direct way to do just that.
Similarly, Amazon ads target people at an even more effective time: when they’re already buying a product. Amazon users already have purchase intent, and exposing them to ads has even fewer steps in the path to completing a purchase. While Google’s own Shopping Actions mobile checkout processes are enabling the same thing through Google retail partners, Amazon ads are a critical factor for merchants and brands that already sell on the website. These advertisements also happen to correlate to sales.
Just like other forms of online advertising, it’s possible to bid on relevant keywords to display ads with. This process increases the chances of a potential customer finding your product or brand as opposed to a non-sponsored search. Amazon also provides the opportunity to adjust your keywords and budget for your ad campaigns. When combined with the different ad types, merchants can create customized campaigns to optimize ad performance.
What Types of Ads Does Amazon Have?
One of the most common Amazon ad types is sponsored product ads. Working similarly to pay per click ad campaigns, these ads look almost identical to other product listings, aside from the gray “sponsored” label. While one of the costliest Amazon advertising options, they do allow you to put your product up first when a customer searches for your keywords.
Sponsored Brands (previously known as Headline Search ads) also appear when customers search for your keywords. The major difference is that, instead of a product listing, sponsored brand ads appear as a banner at the top of product search results. You can advertise multiple products at once, and you can set the link of the ad to a product, brand page, or even a customized Amazon URL These ads also work on a cost per click basis, and they work best for promoting brand awareness.
Of course, it’s possible to advertise your product in places other than search results. Product Display ads allow you to place your product on the similar item lists that appear on product pages. You can choose to use product targeting, which lets you select which pages your product will appear on, or interest targeting, which allows your ad to appear on a broader category of pages. While the click rate of these ads tends to be much lower, they can help you target shoppers who are comparing different products.
Amazon has also made announcements that it’s planning to on introduce more video advertising formats, which will allow marketers to take advantage of a powerful marketing tool. There will also be easier processes for advertisers to buy ads – both on and off Amazon properties. With the impact that Amazon ads have had so far, it’s likely that we’ll see even more advertising developments in the future.
Best Practices for Amazon Advertising
With the ever-growing influence of Amazon ads, businesses should consider investing in this service. Just like any other advertising, though, there are best practices you can follow that will help you make more effective campaigns:
- Make use of automatic targeting. While Amazon ads allow you to create manual campaigns, there are also automatic targeting options. Consider using an automatic campaign to discover your most effective terms for sales, then use that information to create a more targeted manual campaign.
- Take advantage of Amazon reporting tools. No ad campaign can be successful without tracking your campaign metrics, and Amazon Marketing Services will help you track KPIs like click-through rates, conversions, and more.
- Choose your keywords wisely. Popular keywords may put your ad in front of a larger audience, but they are also highly competitive for that reason. Focus on bidding for keywords that match your budget. The number of impressions may be lower, but you can still target your audience.
You should also feel free to experiment and see how all the types of ads perform for you. Even if businesses use the same ad strategies, they can still see vastly different results. Just like with any other ad campaign, you’ll want to adjust your Amazon advertisements to a strategy that works for your brand.
Amazon is quickly becoming one of the largest names in online advertising, and you don’t want to miss out on the sales opportunities Amazon ads can provide. By following best practices, you can find an approach that works best for your business – and maybe join the companies that are shifting their Google advertisement budgets into Amazon. Check out Vizion’s Amazon Marketing Services.
Learn more about how our Amazon Advertising Services can increase your sales.