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How Advertising on Amazon Works

Amazon is a platform that’s unlike others typically seen in the digital marketing field. Amazon is a space where E-commerce rules and there are no external links. When advertising on Amazon, your advertisements only lead to your shop within the Amazon platform. It is a truly unique space. However, it can also be quite challenging to navigate for those without training, certification, or experience. Comprehensive knowledge about the platform and information about the rapidly changing industry of online retailers is critical to advertising success on Amazon.

If your company offers products on Amazon, it needs to invest in Amazon pay-per-click advertising to unlock its full potential. Businesses that sell through Amazon without any ads are merely scratching the surface of the sales they could be making. Discover how advertising on Amazon works and what it can do for your company’s success.

The Basics of Amazon Ads

Amazon ads are PPC advertisements exclusively on the Amazon platform. The only products advertised are items that are available for purchase on the Amazon platform. Ads on Amazon do not lead back to a company’s website, unlike ads on almost every other popular pay-per-click advertising platform. These ads are specifically designed to drive more sales on the Amazon platform.

If your business sells products on Amazon, it’s crucial to invest in PPC ads. 52 cents of every dollar spent online is spent shopping on Amazon. This amounts to a massive portion of the online market share, and business owners should take notice. Additionally, however, because there is so much volume on Amazon, businesses that don’t advertise can easily be buried among those that do. If you’re selling on the Amazon platform but not advertising on it, you’re only scratching the surface of your potential.

Amazon is a platform that is essential for online product-based businesses. A central platform’s convenience drives customers to their site, and thus, to your products when you properly execute PPC advertising.

The Industries Most in Need of Amazon Ads

Every product-based industry can benefit from Amazon advertising. At least for a portion of their profits, most online businesses sell through the Amazon platform. It is critical to invest in visibility. People usually do not look past the first page of search results, so in order to be seen, you need keyword visibility on key search terms relating to your product and industry. Visibility is the key to increasing sales.

Unlike PPC methods for search engines, Amazon ads directly influence organic rankings on the site. The rankings are based on how fast and how recent the products sell compared to other products in the same category. If you advertise more aggressively than others in your categories, you will start getting a higher sales value and velocity. This process allows you to begin climbing in organic rankings on the site.

Amazon advertising is especially essential for new product launches and new brand launches. Advertising allows these newcomers to gain some visibility and start developing higher organic rankings. It is also crucial for any industry that is just beginning to sell through Amazon.

The Placement of Ads

Amazon is a platform that advertises in multiple locations on different pages. However, there are two primary places where ads reside effectively.

In Search Results

In the search results page, there are multiple locations Amazon places advertisements. The ads may live at the top, in the middle, or at the bottom of the page. Amazon utilizes advertisements all over the webpage for maximum visibility.

On Product Pages

The platform also places advertisements on the product pages themselves. Product page placements mean you can advertise your product on a competitor’s page. It also means you can advertise your products on pages with complementary products to increase sales and personalize the user’s shopping experience.

These placements work because most navigation on the Amazon website comes from product carousels, not searches for key terms or products. Advertising is the quickest and easiest way to climb the rankings for this site.

The Costs of Advertising on Amazon

The costs associated with advertising on Amazon vary greatly. Businesses can set their budget as high or as low as they like. Spending more often leads to faster and more desirable results. Still, there is no downside to advertising even a little bit on the platform. Deciding how much money to allocate to Amazon PPC ads is more about judging advertising spending compared to overall sales. Analyze how much to invest based on your own existing sales metrics.

Unlike some other platforms, Amazon doesn’t give impression share metrics on all of its advertisement types yet. It can be difficult to decipher where you should set your budget initially. Consulting a professional can help decide this.

A minimum ad spend of $1,000 is recommended so you can see and track visible growth at a desirable pace.

Overall, when it comes to advertising on Amazon, the bottom of the barrel and the sky are your only spending limits.

What You Should Know Before Deciding To Advertise on Amazon

If you’re deliberating about advertising on Amazon, there are a few key things to note before starting a PPC campaign on your own.

Strong Understanding of Your Margins

One thing that’s necessary for success in a PPC campaign on Amazon is a solid understanding of your company’s margins. This understanding informs your spending budget for Amazon ads. You need to invest in the ads while still making enough money on the platform to justify the cost.

Outlined Goals

Before establishing a PPC campaign on Amazon, you need to have clearly defined goals. It’s hard to measure success if you go into the decision without a vision for the future. Most companies want to either find a more efficient way to make sales or increase the overall volume of sales. Many startups prefer to build a brand and focus on organic ranking growth.

Enough Stock To Keep up With Demand

When you advertise on Amazon, it’s vital that you know your sales volume will increase. You need to have enough inventory to meet the increase in demand. Many companies fall into the trap of not anticipating the growth, and they end up unprepared, which can hurt business through unfulfilled orders and negative reviews.

How To Get Started

Getting started advertising on Amazon is quite simple on paper. You log in to your vender or seller central account, then you click on the advertising link within the account. Amazon has an option for creating campaigns right on that page, so it’s simple to access. You can create campaigns and complete the earning module or gain certification through the Amazon advertising platform before you get started. We highly recommend obtaining the Amazon advertising certification before you begin to ensure the best possible results when handling the PPC campaign on your own.

An alternative option is to hire a company with experience with Amazon ads. The best company will already have Amazon advertising certification and will have a staff of well-trained individuals to work on your campaign. Hiring an Amazon ads management company saves you time and money in the long run. Hiring a professional Amazon advertising company to handle your ads on the platform will enable you to back to running your business without wasting time and energy on Amazon.

How Advertising on Amazon Works

How To Optimize Amazon Ads

Optimizing is crucial to creating successful Amazon ads. Amazon provides reports to help you track performance, similar to the way other PPC platforms operate. Analyzing and regularly reviewing keyword performance ensures you’re showing the right product for the right search terms. Establishing the right product for the right search terms is often referred to as product variance selections.

A professional can read these reports and decipher what they mean for your campaign. They can then adjust the strategy to achieve more successful advertisements and higher organic rankings via Amazon ads.

How Is Success Measured With Amazon PPC Campaigns?

Success in Amazon PPC campaigns is measured differently depending on the goals of the company. The only way to tell true success is if the goals set at the beginning of the campaign are met consistently. For many, success means increased sales on the platform, but for others, it is measured in increased impressions. Overall, most companies strive for increases in volume or increases in their ROAS goals.

Amazon is a unique platform in that advertising helps inform organic rankings. Some businesses center their main goals on increasing organic rankings. If this is the case, a company’s success is indicated by continued growth within the platform’s organic ranking systems.

What To Expect From an Amazon PPC Campaign

If a business owner decides to start PPC Amazon advertisements through a digital marketing agency, here are a few things they can expect.

  • An account audit of the business’ Amazon account to give the agency a better idea of where they can add value
  • A discussion regarding the audit, highlighting key insights, and a pitch for improvements
  • A comprehensive contract
  • A timely call to intake the account
  • A plan to build new campaigns and ensure they’re ready to run within 10 business days of the initial intake call

What To Do if PPC Is Not Working as Expected or Desired

While very rare, sometimes advertising with Amazon is not useful for certain companies. If your business’ PPC campaign on the Amazon platform isn’t performing as you expected or desired, consider these common reasons why Amazon ads may not yield results.

Product Reviews Are Missing or Negative

Customers on Amazon can leave reviews for your products. If there are no reviews, other consumers may be slightly wary about your company’s legitimacy. Likewise, if product reviews are negative, this can seriously deter people from shopping with you. Improve your product reviews by reaching out to previous customers to fix issues and improving product quality and overall service before investing in PPC again.

The Price Point Is Off

Another thing that could affect your PPC campaign’s success is your product price points. Suppose these are not in line with the expected prices and the prices of your competition. In that case, some customers could be discouraged from purchasing your items.

The Delivery Options Need Adjustment

Most Amazon Prime members look exclusively for items that offer Prime shipping. If your shipping isn’t backed by Amazon Prime’s one to two-day options, it’s essential that you instead offer an equally fast shipping option for little to no additional cost to the customer. On the Amazon platform, customers expect free, fast shipping on all products, including large items. Reevaluate your shipping options before reinvesting in PPC.

There are countless ways to manage Amazon PPC campaigns. The most important thing to have in your toolbox when navigating the world of Amazon ads is a reliable and certified Amazon PPC consultant who has your back. At Logical Position, we take a hyper granular approach to Amazon PPC. We create accounts with the intent of creating as many levers as possible to take control back from the platform. We focus on single keyword ad groups and split campaigns by various targeting types. We structure our campaigns using portfolios, so we can utilize all ad types. Our only goal is to help our clients meet and exceed their own goals. Our team is certified, so you don’t have to be. We save you time, offer knowledge and experience, and are a certified Amazon Premier Partner agency, which means we get early access to information for our clients.

To start unleashing your company’s potential, contact Logical Position today.

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