It has become fashionable to dismiss strategy as something out of the old days – when businesses could plan with confidence. You may think that the modern, highly competitive eCommerce environment that is extremely fast-paced and emphasizes agility, versatility, and flexibility has rendered strategy outdated. The truth is that, far from being unimportant, an Amazon PPC strategy — at least for those that hit the bull’s eye — is the starting point of a successful Amazon seller story.
Why is it crucial to have an Amazon PPC strategy?
Amazon PPC (Pay-Per-Click) advertising has become a popular Amazon marketing solution. It allows sellers and vendors to buy visibility for their products at the top of Amazon’s search results page. Amazon sellers are investing in advertising to target customers when they’re ready to buy.
According to a report, 75% of Amazon sellers already use at least one type of pay-per-click (PPC) ad on the platform while, 34% intend to increase their advertising spend in 2021, and with good reason: it’s effective. However, as more sellers use Amazon PPC, it can become increasingly challenging to achieve your goals on Amazon without a defined strategy in place.
The bottom line – in 2021 and beyond, your Amazon business will need an effective PPC strategy to compete in the marketplace.
Identifying the stage of your Amazon seller journey
Amazon PPC strategy is not a game of one size fits all. The best Amazon PPC strategy is dependent on the stages of your journey as an Amazon seller which are defined as follows:
- Product Launch Stage
- Demand Generate Stage
- Cost Optimization Stage
Let’s delve deeper into what each of these stages means for your Amazon PPC strategy and the Amazon ad types which can help maximize the value of your Amazon PPC campaigns.
Amazon PPC Product Launch Strategy
What is a Product Launch Strategy?
The product launch phase consists of the early stages of your Amazon seller journey, which include pre-launch and launch. To have a successful product launch, you should implement an effective strategy that will utilize marketing techniques to increase sales.
As a new product enters the market, you typically need to operate at a break-even point (BEP) or even accept losses. The primary goal here is to improve ranking during this phase. Be prepared to spend a little money early on (which might translate into a higher ACoS) as it will take some time for your rankings and sales numbers from Amazon PPC campaigns to make up those costs and achieve profitability.
Trellis’ Top Tip: Amazon SEO is a pre-requisite for Amazon PPC. Prepare your product listing so that it’s SEO-optimized and ready to go live when you need it. Try Arch, our free Amazon listing analyzer to receive actionable insights for improving your Amazon product listing score from 0 to 100.
Which Amazon PPC ad type is right for a product launch strategy?
Sponsored Products, Sponsored Brands, or a combination of both Amazon ad types is most suitable for an Amazon PPC product launch strategy, and here’s why:
Most Amazon sellers start with this ad type and continue to use it as their business grows. They’re the most popular amongst third-party sellers and one of the most profitable! The best part about this ad type is that it’s beginner-friendly. You don’t need any advertising experience to set up an account and start posting your first ads! With Sponsored Products, you can target keywords you think your audience is searching for, relevant categories, and even competitors’ listings.
Moreover, opting for Sponsored Brands ads can help amplify the results of your Amazon PPC product launch strategy. This ad type allows you to show customers more of what your company has to offer and build brand recognition to support future brand awareness campaigns.
Amazon PPC Demand Generation Strategy
What is a Demand Generation Strategy?
A demand generation strategy considers the entire 360-degree customer journey to nurture relationships and build better brand experiences.
As you transition towards demand generation for your Amazon business, it is important to pay attention to branding. Branding takes a more prominent role during this phase of your journey as an Amazon seller. If you are ambitious about your e-commerce business, then building brand awareness should be a priority for any successful entrepreneur.
At this stage, build a strong and effective marketing team that can project your product in the best light possible. You should focus on creating high-value and loyalty-driven strategies for this stage because happy patrons are likely to recommend your products to their friends too!
Which Amazon PPC ad type is right for a demand generation strategy?
A combination of Sponsored Products and Sponsored Brands ad types is the best approach to support an Amazon PPC demand generation strategy.
From the perspective of demand generation, the potential of Sponsored Brands can easily be missed if they are considered second fiddle to Sponsored Products. It’s more useful to think of both formats as partners, which will help companies reach new audiences and move their products faster than ever before.
Research by Amazon revealed that using Sponsored Products and Sponsored Brands together increases overall conversion by 50% and ROAS by 24%. Sponsored Brands have the goal of bringing out awareness and consideration. They are designed to prepare purchases that happen at a later stage, even if those conversions aren’t attributed directly to Sponsored Brands.
Amazon PPC Cost Optimization Strategy
What is a Cost Optimization Strategy?
Although a low ACoS is what Amazon sellers should aim for, as discussed earlier, it depends on their strategy. A higher ACoS can mean higher long-term profits if it fits with the seller’s strategy. However, once you have gradually and methodically made your way from the product launch and demand generation phases to the advertising cost optimization stage, a PPC cost optimization strategy allows you to implement tactics that can substantially lower your ACoS without compromising the performance of your Amazon PPC campaigns.
Which Amazon PPC ad type is right for a cost optimization strategy?
A combination of Sponsored Products and Sponsored Brands ad types is the best approach to support an Amazon PPC cost optimization strategy.
With the steadily rising competition on Amazon, it can be difficult to stand out in a sea of Sponsored Products. Fortunately, eye-catching video ads can change that! Research validates the cost-efficacy of Sponsored Brands video ads. For the median advertiser, the conversion rate of Sponsored Brands video ads is 29% more than static images with a 442% higher click-through rate (CTR).
Additionally, with Sponsored Display Ads, you can reach relevant audiences both on and off Amazon as these ads are visible on various Amazon pages and third-party apps and websites. Sponsored Display Ads represent a full-funnel advertising approach as they allow sellers to cross-sell their products as well as target their competitors’ products.
Uncover the Strategy for Limitless Amazon Success
The best way to improve your overall performance on Amazon is by leveling up your Amazon PPC strategy. Acing Amazon SEO, understanding the stage of your Amazon seller journey, and getting a solid grip on the different types of Amazon ads lays a strong foundation as you maneuver in the world of Amazon advertising.
At Trellis, we believe that an effective Amazon PPC strategy is the starting point of your super seller journey on Amazon. To help you achieve your goals faster, we have developed a first-of-its-kind Amazon PPC strategic planning tool to maximize the value for money of your Amazon PPC campaigns. Check out the free tool here and kick-start your Amazon super seller journey now!
