May 12, 2020 16 min read
Three Reasons Winning Top of Search Doesn’t Matter
Updated: May 19
Physical stores have a variety of locations where brands can display and promote their products. These placements range from end caps in high-traffic areas to on-shelf placements in aisles with lower foot traffic. Similar to the brick and mortar environment, advertisers on Amazon have various ad placement options available on-site. The price that brands pay for these placements varies significantly and ultimately the value of these placements is driven by balancing priorities in both the expected sales lift (efficiency) and ability to promote your brand (reach). While reach is an important component to a brand’s overall strategy, in this article we will focus solely on sales efficiency when evaluating the value of Amazon’s available search placements.
Amazon Sponsored Product ads have three different placements: 1) Top of Search (ToS), 2) Rest of Search (RoS), and 3) Product Pages (more commonly referred to as Product Detail Pages). ToS placements are the three to four paid search ads at the very top of the keyword search results page (above the fold), while RoS placements are found further down in the search results (below the fold; See Figure 1). Conventional wisdom would suggest that you can expect more eyeballs and clicks at the ToS, however, these highly coveted placements are generally more expensive as brands will bid more aggressively to win them. Product Page ad placements refer to the sponsored placements on product detail pages (See Figure 2). These placements generate significant impression volume due to the sheer amount of ad real estate but generally have lower ad engagement than ToS and RoS.
Figure 1: Sponsored Product Placements (ToS & RoS)
Figure 2: Sponsored Product Placements (Product Pages)
At the end of the day, this is just arithmetic, so brands should keep in mind two equations:
Looking at performance formulaically, we can identify where brands have control over search placement optimizations. Let’s break down the variables in the Ad Sales formula:
The combination of these three metrics will determine your total Ad Sales. Once you have optimized for Ad Sales, the next step is to optimize your Ad Spend by reducing your Cost-Per-Click (CPC).
If brands view the generation of ad sales from purely an efficiency perspective, they should not be concerned over whether the clicks stemmed from ToS or RoS. Brands should care whether they 1) generated enough clicks to deliver on their marketing objectives and 2) got that bucket of clicks as efficiently as possible. Of course, not every click is created equal. Some generate higher incremental sales while others have a higher conversion rate since the product was highly relevant to the search term. Ultimately, brands wanting to increase efficiency should focus on investing in the search placement with the lowest Cost Per Click (CPC) and highest Conversion Rate. Some logical questions might subsequently arise:
Let’s tackle the first three questions:1. Traffic: Is there actually any traffic on non-ToS placements?
Since Paid Search relies on clicks, you might naturally ask whether RoS placements can generate sufficient traffic volume for brands to spend through their budgets. More specifically, do shoppers actually navigate further down in search where the RoS placements live? The answer to both is yes. The quantity of clicks available on high volume keywords such as protein powder or laundry detergent can be substantial for all search placements. The implication is that brands can drive equivalent amounts of traffic to the detail page by showing up consistently in RoS rather than pulsing in ToS. However, it is important to note that as the keywords get more granular (e.g. tail keywords), the overall search volume drops and the amount of traffic on non-ToS placements decreases as well. Thus, a granular search placement strategy works best for the top 15-25% of keywords measured by overall search volume.
2. Cost: Do the costs for different placements vary significantly?
Budgets are finite and it can take a war chest of cash to routinely win on ToS on high-search-volume keywords. Brands bid aggressively to win on key search terms which puts inflationary pressure on CPCs, especially on ToS placements. From our data, we have seen that ToS placements can easily be 2-3x more expensive than RoS placements for the same keyword. In order to maximize efficiency and sales growth with your advertising, you should aim to drive as much incremental traffic to your detail pages for as little money as possible. This means finding the most economical CPC.3. Behavior: Doesn't ToS naturally have higher conversion rates?
One could argue that ToS placements are worth the higher cost if shoppers who clicked on ToS ads converted at a disproportionately higher rate than RoS clickers. However, the data does not always validate this and in many cases, shows that conversion behavior does not vary significantly depending on whether that shopper landed on your detail page via ToS vs. RoS. You must look at conversion rate data between the different search placements to identify whether ToS drives higher conversion for your brand. Consider running a test and learn for each subcategory in which you operate to isolate the value of ToS for different product types or customer segments.
So, what can brands do with this information?
Amazon provides tools that enable brands to influence where their Sponsored Product ads surface. More specifically, advertisers may apply bid multipliers that increase their default bid and subsequently increase the probability that the ad will appear where that multiplier is placed. It is important to note that the default bid applies to each placement unless a multiplier is entered. Remember that the default bid is always the bid for RoS, meaning any multiplier you manually enter will influence your bid on ToS and Product Detail Pages (See Figure 3). The Bid Boost can be anywhere from 0-900%, so a $1.00 default bid could be boosted to $10.00 by applying a 900% multiplier. Anecdotal evidence suggests starting from a moderate bid level and layering in a moderate multiplier on ToS will result in ads surfacing more frequently vs a very low bid and high multiplier.
We recommend that you test a moderate default bid without any bid multipliers. Gather two weeks of data and if you are heavily mixed into RoS, increase the bid on ToS via a 25-50% multiplier. Monitor the performance for the next few weeks to determine whether your ToS bid is sufficient to gain impressions. From here, you will have to constantly optimize since performance can fluctuate daily, given that costs are dependent on what your competitors are doing. Technology is highly useful for such a granular optimization strategy as it will enable you to scale this to more than a handful of campaigns.
Figure 3: Bid Multipliers
Next, consider your ability to distinguish your product in a sea of uniformity. Product images and packaging can be important tactics to drive success on RoS targeting. Imagine a search results page where most of the search results look the same or at least have similar colors. Think of your main competitors. Do they employ color uniformity as part of their branding strategy? The chances are yes, and you can use this to your advantage when conquesting. We have seen higher ad engagement when products stand out on the search results page. This tactic is specifically leveraging color contrast on the search results page.
If you are a national brand, differentiation can also be an important tactic in highly fragmented categories or ones where smaller digitally native brands dominate the search results page. National brands often have intrinsic trust in the minds of consumers, so showing up in the RoS can be a differentiator and elicit shopper engagement based on that implied contract of quality between the national brand and the consumer.
In summary, not all search placements are created equal – in Cost-Per-Click (CPC), Click-Through Rate (CTR), or Conversion Rate (CVR) – nor should brands consider ToS mandatory in order to perform well on Amazon paid search. While ToS can be strategic from a branding perspective, it does not necessarily drive the most efficient results. Brands will want to look at overall search volume, CPC, and conversion rates when evaluating the efficacy of ToS, RoS, and Product Detail Pages, then use the Bid Multipliers to influence how aggressively you target each placement. Improving efficiencies on top keywords can be a challenge but these optimizations can help squeeze out additional performance from your marketing dollars.
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