The Best Amazon Advertising Strategy – Updated for 2024
Is Your Amazon Digital Marketing REALLY Working for You? Use These 10 Tips to Lower ACoS, Boost Conversions, and Increase Sales!
As an entrepreneur, you know how competitive Amazon digital marketing has become. It’s harder than ever to stand out.
Without a good digital marketing strategy in place, you can end up making costly mistakes that cost you the money you need to scale your ecommerce business. The good news is that there are ways to optimize your ad spend to save money AND see better returns with your efforts.
Achieving great results with your Amazon advertising requires more than just following the crowd and covering the basics. Effective advertising efforts, such as utilizing Amazon PPC (Pay-Per-Click) advertising, are crucial for promoting your products and seeking tips and tactics for success on the platform.
The 10 following strategies will help to push your products to the top of the page, increase your Amazon SEO, improve your brand awareness, and save you money on your Amazon marketing.
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Find out moreTop Amazon Advertising Campaign Strategies for 2024
- Improve Brand Awareness
- Focus On Product Profitability
- Know Your Advertising Cost of Sales (ACoS)
- Use Negative Keywords and Phrases
- Brian R Johnson’s “Gold Panning” Technique
- Utilize Match Types
- Optimize Your Bids
- Take Advantage of Sponsored Display Ads
- Cancel Ineffective Ad Campaigns
- Don’t Forget About Amazon DSP Advertising
By following these 10 strategies you’ll put your brand in a perfect position to be successful. Along the way you’ll also increase your brand exposure and ad revenue, as well as decrease your Amazon advertising cost. This will ultimately help you to use your marketing budget in the most effective way.
1. Improve Brand Awareness
Amazon has quietly become one of the top advertising websites and is the global leader in retail sales. Why is this such an excellent opportunity for sellers? It’s largely because of Amazon’s Sponsored Brands advertising.
When a customer searches Amazon for a product, Sponsored Brands ads appear in the header’s first column of the search results page. That makes Sponsored ads incredibly impactful.
Because Amazon Sponsored Brand ads take up a TON of room at top of page one on mobile, take advantage of custom creative images, and are able to highlight multiple brand products, their ability to improve brand awareness has exploded.
This prominent placement of this ad type has shown to have a sales conversion rate of 9.5% for products placed on the search results page, regardless of whether it was the intended product or not that customers had searched.
These ads are ideal for top-of-the-funnel brand awareness and product reach, especially when you couple them with keyword phrases and exact match keywords that highlight your product.
2. Focus On Product Profitability
It might seem silly, but an important step in strategizing your Amazon ad campaigns involves understanding your Amazon products’ margins and how they impact your advertising campaign.
Every SKU has unique selling data points you can analyze. Using the data, ranging from cost to promote to manufacturing and selling costs, you can determine whether your profit margins are big enough to pour more ad dollars into that particular product.
Analyze which of your products has a higher profit margin before you think about spending anything more on paid ads. The last thing you want to do is waste money on ads for a product that barely makes it worthwhile.
This analysis will help you pivot your product offerings by phasing out those products that aren’t carrying their weight then dedicate the resources towards more profitable products.
3. Know Your Advertising Cost of Sales Metrics
Everyone wants to make a lot of sales, but at what cost? With Amazon’s marketplace becoming more competitive every day, sometimes the difference between profitability and a black hole of advertising spend is a matter of pennies.
That’s why it’s critical that you understand your Advertising Cost of Sales (ACoS) before you begin implementing your advertising campaigns. A precise ACoS will help you to come up with a realistic, sustainable ad budget.
ACoS is a measurement of your advertising campaign’s overall efficiency and represents the ratio of ad spend to ad revenue in percentage. You can calculate your Advertising Cost of Sales with this formula:
Break-even ACoS is the point where your advertising cost becomes equal to your profit margin (calculated after all fees and costs involved with selling on Amazon are subtracted).
For example, once you’ve added your product costs, shipping costs, Amazon costs etc, your profit margin is what remains. If your profit margin is 30%, that’s also your break-even ACoS.
After you have done the math and determined your target profit margin, subtract that from the break-even ACoS. At that point what remains is your target ACoS. If you’ve determined that you have a 30% profit margin to work with and you’d like to end up with a 12% target profit margin, that leaves 18% as the target ACoS.
Not only is an understanding of your ACoS a great way to judge the health of your Amazon listing, it also functions as a sort of ad-campaign gas pedal. Depending on your specific goals, you might want to have your foot pressed firmly on the accellerator.
That can lead to a higher ACoS and also hints at the fact that a low ACoS isn’t always better.
For example, an ad campaign with higher ACoS may be better at driving traffic higher up in the marketing funnel.
Let’s say that you were launching a new Amazon product. In that case, your goal would be quickly getting the maximum number of eyes on your product. In this case, your ACoS would be higher than during a time of relative ecommerce calm.
The key is knowing where the line is.
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Find out more4. Use Negative Keywords and Phrases
The ad campaigns that Amazon uses don’t automatically relate to the specifically intended search terms.
Broad search results can lead to a dizzying array of confusing product matches. That’s why setting up your negative phrases and keywords is crucial so that your product does not show up in irrelevant search results.
For example, if you’re selling over-the-ear headphones, you wouldn’t want to target and rank earbuds as a keyword. You may get some clicks and maybe even make a sale or two, but in the end, you’ll spend a lot of advertising dollars just to get in front of customers looking for something very different to what you are offering.
The way to utilize negative keywords effectively is to create a strategy that focuses on targeting those keywords that convert and excluding those that don’t. You want to be sure to review negations when you add products to your catalog to prevent blocks, as well as using negatives to prevent competing against your own campaigns.
You should target specific keywords and phrases with high conversion rates regardless of traffic volume and eliminate broad terms that are high-traffic and low-conversion.
Your Ultimate Goal Is to SELL Your Product, Not Gather Clicks!
Remember, your objective is SELLING your product, not getting the most clicks on a keyword.
Utilize this strategy to increase your ad dollar return.
When utilizing negative keywords, use these targeted terms to adjust the amount you spend on your bids. Then, refocus your efforts on the high-volume, converting words with higher bids and lower your bid amount on broad, low-converting terms.
By doing so, your product will appear more relevant to those exact match results while also allowing you to have a smaller presence for any broad terms that may crossover with your keywords.
Lastly, take the time to fine tune your PPC ads utilizing the data of keywords that are converting for you. Use the search results that customers find your product with, and build your negative keyword list to exclude those terms that drain your budget without converting any sales.
5. Get Out Your “Gold Panning” Gear
Amazon ads allow advertisers to use both manual and automatic targeting. That presents challenges AND opportunities. With most ad campaigns, the more control you have as the advertiser, the better. Shifting from auto campaigns to manual campaigns can significantly improve control over ACoS and overall ad spend. However, there are instances when taking advantage of auto targeting makes sense.
That’s because automatic campaigns do two things very well; conducting broad search term research for a new product, and – with the help of low bid autos campaigns – capturing more rare ad placements at a low ACoS.
Then there’s “Gold Panning.”
Coined by Canopy Management’s PPC advertising wizard, Brian R Johnson, the “Gold Panning” strategy (for automatic campaigns) refers to a scenario where a low-bid auto ad campaign with a $20 daily budget is set up to catch low-ACoS outlier ad placements — that trigger when competitors stop advertising at various times during the day.
(These automatic campaigns are backstopped by keyword-targeting and product-target campaigns that are ultimately the primary ad sales drivers. Utilizing manual targeting allows advertisers to hand-select high-performing keywords, optimizing sponsored product ads based on valuable keyword data.)
6. Utilize Match Types
Similar to Google Ads, Amazon uses the broad, exact, phrase, and negative match types to allow advertisers to refine their targeted keywords. The objective is to use crossover terms and match types to hone-in on your target prospect and their search terms used.
To improve your click-through-rate and conversion rate, it’s important not to forget to include the appropriate modifiers that suit your individual campaigns.
Broad Match
Broad match types are the terms most used and least defined. It’s the widest net possible and is the lowest converting of your terms but can help drive traffic to your product sales pages and increase brand awareness.
Phrase Match
You can add broad match terms with keywords in front or after them to add descriptors. For example, if you are selling headphones, you can add terms such as “over-the-ear headphones,” “red headphones,” and more options.
For more specific targeting, phrase match types are the better option. With phrase match, you target terms that customers are using, like “best red over ear headphones” in their search. You can use plural forms, misspelled words, whatever your research is turning up concerning customer search terms. Phrase match is more defined than broad search but is not as specific as an exact match.
Exact Match
Exact match is highly defined, and targeted key phrases match exactly your keywords used with their search query.
You can use plural words and misspelled words, but the search result will not include your products if the query isn’t 100% identical to the searched terms.
Again, let’s use the headphones as a product example.
If you’re selling headphones and using the exact match as a strategy, you can use a key phrase like “best red over-the-ear headphones for $100.” Any search that includes all those terms will appear on the results page but will disregard anything different from your key phrase.
Negative Match
Negative match terms can make an enormous difference as you optimize your marketing strategy. The way you do it is simple; set up your negative match to disregard those terms and key phrases that are irrelevant to your needs and don’t convert for your sales.
This strategy will help you keep your ad budget under control and eliminate wasteful spending by disregarding unnecessary terms.
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Find out more7. Optimize Your Bids
Every few weeks you should be taking a close look at your keywords and analyzing their effectiveness. However, be careful not to take a knee-jerk approach to adjust your keyword strategy too quickly based on only the most recent data. Instead, consider your overall campaign bidding strategy to adjust bids based on keyword performance.
Keywords and phrases may change a little over time. Their popularity and usage could arise from their prominence in popular culture, or everyday market fluctuations.
For example, if you think a phrase or two is an outlier and performing well, you can add it to your campaign. Don’t go overboard and change every key phrase based on a small sample of data.
Instead, use Automatic Targeting to discover the recent terms your customers are using and test the new phrase. If it continues to perform, you can optimize your product content to match, and iterate your ads to adjust to the new search terms, then discard your underperforming terms.
Be sure to optimize for your product’s seasonality as well. Advertising success on Amazon is a moving target. That’s particularly apparent when selling products with an uneven yearly trajectory.
Again, this step is crucial and needs to be conducted with caution. Using Automatic Targeting will take a lot of the experimentation and risk associated with trial and error.
8. Take Advantage of Amazon Sponsored Display Ads
Amazon Sponsored Display Ads (formerly known as Amazon Product Display Ads) are Amazon’s self-serve display advertising solution. This Amazon advertising strategy allows brands (with Amazon Brand Registry) to target and retarget shoppers both on and off of Amazon with auto-generated, product-focused ads.
The biggest difference between Sponsored Display Ads and both Sponsored Product and Sponsored Brand ads is WHAT the ad is actually targeting. Instead of targeting keywords, Sponsored Display Ads targets customers based on their shopping habits. Sponsored Products, on the other hand, allow you to set bids, review advertising reports, and customize targeting strategies, including automatic-targeting and manual targeting options.
Amazon Sponsored Display Ads use intuitive, retail-centric controls that are tailored to your brand and product’s own requirements. An Amazon display ad can help attract audiences while they’re browsing specific detail pages, on Amazon’s own home page, and across third-party apps and websites.
Amazon says that sellers who used Sponsored Display Ads had an average of twice the impressions and half again as many clicks on their listings.
While all other bid optimizations use CPC (cost-per-click) billing, Amazon Sponsored Display Ads are priced on a vCPM (cost per thousand viewable impressions) basis. With your customers’ journey frequently consisting of 5 or 10 touchpoints, why not buy them by the thousand with vCPM?
9. Cancel Ineffective Campaigns
Now that you’ve looked at the data of your best-performing ad campaigns, it’s time to shut down those that underperform. Monitoring which keywords seem to be performing well and those that just aren’t pulling their weight is a crucial step in your optimizing strategy. Evaluating the performance of your PPC ad campaign is essential to ensure that your advertising budget is being used effectively.
You also want to consider which products aren’t performing at all or have low sales. When something requires a significant amount of advertising to get a single sale, you need to consider if the product is worth selling.
When the return and profit margin is slim, perhaps you should discontinue the product or consider it as potential upsell rather than a dedicated product with a marketing budget that drains funds away from other better-performing products.
10. Don’t Forget About Amazon DSP
Selling on Amazon has been exploding in popularity and there are some very good reasons for it. The low initial investment catches the eye of many entrepreneurs looking to add to their income flow. Then, there’s the hard-to-pass-up opportunity for instant access to Amazon’s enormous customer base.
According to Statista, In the last six months of 2023, direct visits to amazon.com were over 21 billion.
It’s clear that Amazon has become THE way to buy and sell products online. What’s less clear is HOW YOUR OWN BUSINESS can compete and stand out in such a crowded marketplace.
Recently there have been many restrictions coming from Apple, Google, and other platforms focused on the sharing of data to third parties. However, when you gain access to that data from a voluntary opt-in through a property you control, you aren’t sharing anything with a third party.
Amazon DSP might be the best way to use that first-party data to reach your prospective buyers. Amazon demand-side platform (DSP) allows you to programmatically buy ads to reach new and existing audiences on and off Amazon. This includes various types of Amazon ads, such as headline search ads, which have evolved into Sponsored Brands ads. These ads are particularly useful for promoting new product lines and require a registered brand to utilize them.
Here’s the best way to try to explain Amazon DSP.
You know those times when you see an ad pop up on your social media feed or website page like magic, promoting a product you JUST interacted with on another platform?
Yep, that’s Amazon DSP advertising.
By the end of 2021, it’s estimated that 88% of all digital display marketing in the US will have been spent through programmatic advertising. In this report by Statista, programmatic advertising reached 418 billion U.S. dollars in 2021. This figure is expected to reach 725 billion by 2026.
There are two ways to take advantage of Amazon DSP. The Managed by Amazon service option typically requires a minimum spend of $50,000 USD (minimum may vary per country).Or, if you’re looking for more flexibility, you can reach out to a third-party agency. This option offers an attractive blend of control, combined with ready access to DSP expertise.
Analyze Your Ad Spend Data And Iterate Your Marketing
As you optimize your marketing using these top-performing strategies, you still have to actively adapt your campaigns over time. The worst, most costly mistake is often setting a budget, establishing keywords, and forgetting about making incremental adjustments to your campaign.
This is primarily due to search terms that fall out of favor, and not adapting your Amazon marketing to how your customers may be searching for products. You need to analyze the data and see what’s performing well and what isn’t.
You’ll want to download the search term report to identify poor-performing keywords. This report helps you select keywords with specific click and ACoS criteria, and then add them to the negative-targeting keywords list to improve ad performance. Discard those that cost you money but don’t convert.
You will need to test drive and iterate ads to reveal what is better-performing keywords and terms. Then, as you identify the specific terms that are performing better, you can optimize your content and ads to include those more frequently, including long-tail keyword phrases that act similarly to the exact match type ads.
Advertising on Amazon is a great way to improve your brand awareness and simultaneously increase your sales, but there isn’t a magic potion to make it happen. Canopy Management can help you to build an effective strategy that aligns with your unique business needs. We’ll help you get more from your Amazon advertising so you can do more for your business.
How Canopy Management Can Help
Canopy Management is a full-service marketing agency for Amazon and Walmart sellers. Our team consists of former Amazonians, multi-million dollar sellers, and award-winning experts.
When you consider the many ways that Canopy Management can help you grow your business, you’ll see why selling on Amazon is much easier “under the Canopy.”
- Strategic Growth Planning
- Listing Copywriting Optimization
- Listing Photography
- Product Videography
- Advertising Management
- Customer Service
- Demand Side Platform (Amazon DSP)
- Amazon Posts
- Full Service Management
- Amazon Review Aggregation