4 Step Approach to Building an Amazon Advertising Strategy

4 Step Approach to Building an Amazon Advertising Strategy

The question on every brand’s mind that sells on Amazon: are there unlimited effective paid media strategies, or are there just a few that tend to work best? The truth is there’s no one-size-fits-all answer to this question. It depends on the brand’s maturity on the Amazon platform, their unique goals and objectives, and the competitive landscape for their product categories.  

A brand’s main consideration should be identifying what they hope to accomplish with their advertising, such as growing sales, driving profitability, and protecting or gaining share. Another top consideration should be determining whether in-house management or finding an agency partner that can provide managed services for you is the right next step towards scaling your brand’s operations and overall profitability.

Either way, there is a common path to follow when crafting your Amazon Advertising strategy. Building a strategy from scratch might sound daunting, but these four steps break it down.

1. Identify Your Campaign Goals

It is crucial to be able to measure the success of your advertising efforts, and that starts with goal setting. Your goals will be dependent on the size of your business, the products and services offered, your budget, and the types of ads available to you based on your seller status.

Goal setting can seem complex, but to start out it can be helpful to simplify the process by asking – Why do you want to advertise on Amazon? From there, you can back into the correct advertising goals for your account. For example: if you answer, ‘Why do you want to advertise on Amazon’ with ‘so more people know about my brand,’ then your goal is to increase brand awareness and you should use tactics that will expand your advertising reach and metrics that measure if you are increasing your household penetration.

When thinking about paid search on Amazon, it is important to identify the role you expect your products and brand to play within your category. For a category captain, it is a fantastic opportunity to focus on new product launches or eCommerce specific products, because you can rely on brand loyalists to dip into products outside of their “staples” from your brand. For emerging brands just beginning to experiment in the eCommerce advertising space, or who typically play a small role in a category, paid search on Amazon is an opportunity for your brand to dominate. It is often more cost effective for a smaller brand to advertise on Amazon than it would be to sponsor an end cap in stores. Utilizing Amazon advertising is a terrific way to raise brand awareness and convert consumers to your brand. We encourage emerging brands to focus on buyer data (New-To-Brand, household penetration, total sales growth, demographics, etc.) than just on having high performing ROAS (Return on Advertising Spend) or low CPC (Cost Per Click).

2. Target the Right Audience

Creating a target audience is extremely important for knowing where to focus your marketing efforts and finding a way to help inform customers about your brand’s products is essential to building an effective Amazon Advertising strategy. Amazon Sponsored Products is a great place to start and will help you connect with more customers, drive consideration of your products with relevant audiences, and increase sales when shoppers are ready to buy. One effective targeting solution within Sponsored Products is Product Attribute Targeting (PAT). While keyword targeting relies on search terms used by customers, PAT allows you to serve ads based on similar, complementary, or competitive products and can be a good way to get campaigns launched quickly.  

Utilizing Amazon audiences through Sponsored Display is a fantastic self-service advertising solution that could help your brand reach relevant audiences across the customer journey with ad placements that appear on and off Amazon.

Not every shopper who visits a product detail page will end up purchasing that product. With remarketing, you have the ability to target shoppers who have viewed a detail page within the last 30 days. Another key feature is that Sponsored Display ads allow you to target audiences both on and off-Amazon.com.  

This targeting option applies to the following:

  • Shopper who viewed the products that you’re advertising
  • Shoppers who viewed products that are similar to what you’re advertising
  • Shoppers who viewed products in a specific category that you choose

Another effective feature with Sponsored Display is lifestyle audience targeting, which are specific audiences whose shopping and streaming behaviors suggest certain lifestyle preferences. These audiences are built on data from shopping behaviors on Amazon, page visits on iMDB, and streaming behavior on Prime Video and Twitch.

Lifestyle audiences can be used to target things like:

  • Ways of life or hobbies. For example, avid gardeners or landscape photographers.
  • Values. For example, ‘green’ or conscious consumption.
  • Current life situation. For example, parents with children in the household or new or expectant parents.
  • Shopping behavior. You can target high spenders, early adopters, or Amazon shoppers that provide reviews.

Check out one of our previous articles on everything you need to know about Sponsored Display ads here.

3. Set Your Bids and Budget

Allocating a fixed daily budget can give you more control over your business’s finances and can help you forecast your advertising budget based on the profitability of your campaigns. Setting a cap on your daily sponsored ads budget will prevent overspending on your Amazon PPC campaigns and capping your advertising budget is a solid way to avoid wasting money due to keyword bidding errors.

There’s another way to prevent wasteful ad spend while increasing your ROAS, and that is through leveraging intelligent automation, such as the Pacvue platform. Pacvue’s dayparting feature allows brands to control what time of day their ads run on Amazon. Brands can monitor their hourly ROAS performance as they adjust their ad strategy. The power of Pacvue also allows brands to bid intelligently with recommendations to overtake your competitors while maintaining or improving ROAS.  

Check out how a leading global pet brand used Pacvue’s dayparting and DSP optimization features to achieve a 25% increase in brand loyalty rate here.

4. Optimize Performance

Start Bidding on Branded Keywords

Spending against branded keywords is the most effective for new product launches or limited-edition items to raise awareness with your brand loyalists. If a user is searching for products by the brand name, they are likely a brand loyalist and know exactly what they are looking for, so you are better off spending that money elsewhere for the opportunity to convert a user and position your brand against competitors. It is important to focus on category and competitor terms and bid aggressively, because even if the cost per acquisition is high, to convert a user to your brand versus a competitor is worth the price. Branded keyword bidding can also be helpful to promote variations or other complementary items, especially when you need to move inventory.  

Driving Sales and Increasing ROAS

Just as Amazon the retailer is built around a flywheel, Amazon the ad platform is as well. To drive strong and sustainable long-term sales and to have an efficient advertising program, you should try to invest in all notable moments of a customer journey to encourage awareness, consideration, conversion, and loyalty. This creates a cycle that will drive efficient sales over time. Also, it is important to note that ROAS is a last touch measurement, so just because one element of your advertising program is less efficient than another does not mean that element is not contributing to your growth. You can read more about how to improve ROAS with Amazon product targeting and keyword targeting here.

Pacvue’s Amazon Marketing Cloud dashboard can help you measure a multi-touch, or full-funnel, campaign strategy by seeing the impact that each ad type has on overall performance.  

Improving Brand Awareness  

To drive brand awareness, you must take a full funneled approach, inclusive of various campaign and targeting types. Think about branded, category and competitor terms as well as budgeting for Sponsored Products, Sponsored Brands, and Sponsored Brands videos. Brand awareness increases by targeting consumers site wide with various ad types and building the consumer’s interest in your products. A Sponsored Brands campaign is a great tactic to reach shoppers as you can create custom headlines to highlight products to customers. If they click on that ad, they will be taken to your brand store where you can showcase your entire portfolio through an immersive shopping experience.

Key Takeaway

Brands on Amazon should first discover what they are trying to accomplish with their advertising strategy. Each brand is unique and has a diverse set of priorities when selling on Amazon, so it is crucial to identify your goals and then execute a strategy that complements them.  

To learn about how to work more efficiently with rule-based automation, AI optimization, and campaign suggestions, freeing your team from what was once a manual process, read more about campaign optimization!

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