In September 2018, CNBC reported that Amazon’s apparel retail shares had grown 100 percent over the past year—and that its market value had briefly surpassing $1 trillion. Those are impressive numbers, even for Amazon. How did the company achieve this growth? It’s likely due to its increasingly popular advertising platform.
While Amazon’s ad revenue isn’t yet at the level of Facebook or Google, ad sales are the e-retailer’s most rapidly growing revenue source. In the second quarter of 2018, it exceeded $2 billion in ad sales; by September, eMarketer estimated that Amazon’s ad revenue would reach $4.61 billion. For the full year 2018, Amazon reported $10.1 billion in revenue in its “Other” category, which includes ad sales, up 95% over the prior year.
It’s no secret that Amazon’s vast wealth of consumer data played an integral role in achieving such results. Amazon knows how and when people shop—as well as how to predict future behavior.
Of companies using Amazon’s advertising capabilities, 80 percent intend to increase their budgets in 2019. Some of that spend is being pulled from other advertising avenues, such as social media and search, but for retailers active on Amazon, that shift in prioritization is worth it.
How Amazon Ads Work
Users interact with Amazon differently than they do with Google or Facebook. Typically, people visit Amazon with the intention of making a purchase. If a customer opens her browser or the Amazon app and types in “black dress,” chances are she won’t leave until she finds a dress that meets her needs.
Among Amazon’s ad types is the sponsored product ad, a typical keyword-based advertisement. You can use an ad manager to track the length of your campaign, how many ad groups are part of it, and how much you’re spending each day. Sponsored brand ads are restricted to registered brand owners. These generally have more space on the results page and can be customized with one to three items, a headline, and a brand logo.
Amazon’s product display ads show up for customers who visit related pages or have relevant interests. They typically appear by the shopping cart icon or below product descriptions. But knowing what your Amazon ad options are and knowing how to use them are two different things. Here are a few tips:
1. Optimize product pages.Not every ad will work the way you think it will, so test everything before funneling money into a flawed campaign. Make sure your product pages are optimized. They should include a clear description, product title, and image. Ensure that your keyword match types are also optimized. Additionally, consider a product advertisement video, which is one of the most useful ways to engage consumers.
2. Be specific and accurate.Your ad copy can’t be generic. Use specific language that tells customers everything they might need to know: size, color, measurements, and other relevant product details. Avoid subjective descriptors like “best,” and keep an eye out for basic spelling and punctuation errors.
3. Be a competitive bidder.Similar to Google Ads, you want your keywords to show up on the first page of search results. Bid your maximum cost per click to make sure your keywords are showing up for users, then keep track of the results. You can always lower your bid.
4. Combine ad types.As mentioned above, there are different types of ads through Amazon. Why not try them all? You may generate better ROI from sponsored product ads, or perhaps sponsored brand ads fit your needs better. Test out different variations until you identify the mix that’s most successful for your company.
5. When in doubt, automate.Amazon’s platform lets you automate most advertising aspects it offers, including keyword bidding. Don’t take a set-it-and-forget-it approach, of course, but with regular monitoring and analysis, an automated campaign can yield successful results.
Amazon advertising has seen rapid, steady growth in the past few years. Any company that sells its products on Amazon should think about the benefits it could reap from using the platform. With the right attention to keywords, ad types, and campaign tactics, advertisers can see big results. Implement these five steps and get started on your Amazon advertising journey.
Lemonlight Video Production produces branded video content.