Advertising is already a big business, in fact huge. Over the past three years, net sales of Amazon advertising, in particular, had grown to over $14 billion per year in combination with sales of other services in 2019.
And there is a good reason for this. Amazon advertising outperforms advertising by Facebook or Google. Third-party (3P) sellers and direct-to-consumer (DTC) brands can use marketplaces like Amazon to gain incredible reach in 2020.
However, with this opportunity comes more responsibility. “Set it and forget it” just won’t no longer do it. It is expected to see a deluge of advertising dollars pouring into sponsored product ads. Since competition is stiff and may only get stiffer, it’s important to ensure that your brand is properly managing its Amazon advertising spend.
That is why we gathered up a few reasons and tips for you to do so:
1. Amazon Advertising Management Takes Time
Usually, brands claim that their “old way” of handling their company’s advertising budget just isn’t working any longer. Maybe in the past, they spent a few minutes each day checking out automatic campaigns, turning off the ones not performing well, and adjusting daily budgets. Unfortunately, that just isn’t the case for many anymore. Advertising management can totally be a full-time job, and most brands simply don’t have their teams properly resourced to handle the task. In addition to making campaign optimizations with the help of a software, you need to develop a great performing advertising strategy.
For example, some brands are doing advertising in order to block competition, some are, for branding and impression, share, and other brands advertise for conversion.
This way you can see how their progress and strategies have evolved over time.
2. Implement Machine-Learning-Based Bid Management Software
Nowadays, many Amazon consultants and Amazon Marketplace agencies are using machine-learning-powered or AI-powered bid-management software for programmatic ad spend, hence relying on software and systems to optimize campaign results.
Technology can sometimes perform better than team members of brands and advertising strategists. While people are quite limited in their ability to test all varieties of keywords, cost-per-click limits, ad placements, dayparting, et cetera, the software can help you optimize your approach across all of these constraints and more. This is one way to maximize your return on ad spend for your brand over time.
3. Use different Ad Types
For many years, the only option that 3P sellers had to advertise on the marketplace was through sponsored products. Now, while sponsored products are the most familiar advertising option for many, there are a number of new ad placement options that brands can consider. Some of those new ad spots are product display ads, headline ads, and video ads. Your brand should consider focusing on these other ad placements, as many advertisers I work with still shy away from them.
This is true especially for video ads — because they are so new, competition may be comparatively low. As you are considering your ad spend in 2020, make sure that your group has a plan for all ad types. The ideal step to take would be to set up ads in each of these ad types to start gathering performance data.
Start with low CPC bids. For product display ads, target competitor Amazon Standard Identification Numbers (ASINs) where your product is clearly less expensive, provides more benefits, includes a greater amount or quantity or has more total reviews. This should help boost your performance.
Major takeaways
2020 is an exceptional and outstanding year for advertising growth. With the recent COVID-19 crisis, the domino effects have been incredible. Many companies are discussing supply chain issues, which may cause stock shortages and delays. Moreover, a lot of Amazon Sellers are claiming that consumer behavior is shifting towards purchasing even more online over time in general.
To make up for lost ground, brands are expected to really boost their advertising budgets online in order to hit revenue targets.
That is it for today’s post! As usual, if you liked it or have any questions on it, feel free to leave a comment down below for any questions and stay tuned for more!
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