Amazon is the undisputed champion of e-commerce. Boasting 300 million users, including 100 million fanatically loyal Prime members, the platform is the go-to destination for online shopping. In fact, almost 50% of all e-commerce sales in the US belongs to Amazon and 67% of all product searches take place on Amazon. What’s next, you may be asking yourself. Well, let’s discuss Amazon Advertising.
Claudia Hoeffner, Vice-President at Feedvisor Global Market, adds some additional perspective. “Consumers go to Amazon for almost every activity possible in their shopping experience,” she says. “And, for activities like browsing for deals and discounts, comparing prices, and checking availability, Amazon is head and shoulders above other marketplaces and retailers.”
Its users are hooked, which explains why 64% of American households have Prime accounts--a group that converts 74% of the time, incidentally! If you are an e-commerce seller, Amazon is becoming more of a necessity. And, once you do that, advertising is the logical next step.
Two things to note before we dive in. First, in order to get the best ROI on Amazon, you need to optimize more than just your ads. The whole customer experience needs to be taken into account. And second, these systems aren’t as complicated as they seem. They use the same CPC model that you’d find on Google AdWords. The biggest difference being the return you can achieve on Amazon.
Sponsored Product Ads
Connecting with potential customers begins by bidding on keywords that shoppers are using in their digital searches. This method is what allows your products to rank high in the online search results. Here, a great deal of emphasis has been placed on identifying specific keywords, but you can also avail broad categories too. These ads will show up as products in the search results (with the “sponsored” tag in the bottom right corner).
This is the most cost-effective and impactful form of advertising available to sellers and will likely continually outperform similar ads on Google or Facebook because of the inherent buying intent that exists on Amazon.
Headline Search Ads
Headline search ads on Amazon are best used at the top of the buying funnel, building brand awareness. These ads appear at the top of a search page with your brand’s logo and three featured products.
You bid on these in the same way, using search keywords, but here it’s best to focus on broader terms to capture the early consideration phase of the funnel. Therefore, sellers will use this to develop brand recognition in a category rather than sales for a specific product. This is the second most common ad type.
Product Display Ads
This type of promotion appears on the product listing page itself. Here, your ads are closely related to products offered by competitors. In fact, these ads are displayed right next to the “add-to-cart” button, which means that it’s an opportunity for you to snag business by showing customers your items (a vacuum, watch, or sweater) before they complete an order with a rival.
This form of advertising is only available to 1P sellers on Amazon and provides the lowest rate of return, but the ability to target a specific competitor with ads does make it an attractive option for marketers.
Amazon owns the online shopping experience, which explains why customers can now find half-a-billion products listed through its site. That success presents both a challenge and an opportunity for retailers. It’s not easy to stand out. But the savvy business that uses these three advertising tools can leverage Amazon’s platform to gain an advantage.