By Alec Burns, Lead Amazon Strategist, Fluid Digital
I develop and manage Amazon marketing strategies for brands in the world’s biggest marketplace. Fluid Digital is an ecommerce growth agency based in Manchester working with online brands to build and grow successful ecommerce stores. With over 10 years ecommerce experience, we help high-growth retailers succeed online.
If you’re selling on Amazon, Amazon Advertising can provide a huge boost to your sales, as well as provide a highly profitable return. However, before you start paying for traffic to your product detail pages on Amazon, there are some key considerations that will help you create your strategy and avoid costly mistakes.
#1 – Get Retail Ready
Prior to running any paid Amazon Advertising campaigns you must ensure that your products are ‘Retail Ready’. This is to give your campaigns the best chance of success, as well as benefiting your organic performance.
The Retail Readiness Checklist:
● Optimise your Amazon product titles for keywords.
● Make sure your product titles are in line with category guidelines.
● Add description and bullet points that provide all of the relevant information about your product.
● Make sure images are high quality and demonstrate your product’s functionality.
● Aim for 15 or more customer reviews or ratings.
● Aim for a star rating of 3.5 or higher.
● Make sure you have sufficient inventory to keep the product in stock consistently.
● Aim to consistently win the buy box.
● Add A+ content to further showcase the product and your brand.
● Create an Amazon Brand Store
Running ads for products that are not retail ready is much like investing in Google Ads or Facebook Advertising that send users to a poorly built landing page. They’ll just bounce right off to a competitor.
#2 – Set Your Amazon Advertising Budget
It’s possible to set a daily budget at both the campaign and account level, so it’s quite easy to keep control. How much to spend is a trickier question to answer. You may have a predetermined budget handed to you, but if you’re working it out for yourself, consider using your ideal TACoS (Total Advertising Cost of Sale) as a handrail. You may be familiar with ACoS, which measures the return achieved by sponsored ads, much like ‘return on ad spend’; ad spend divided by revenue from ads.
TACoS is your Total Advertising Cost of Sale; how much you are spending on ads relative to your total revenue (including organic). To calculate TACoS, divide ad spend by total revenue.
Your ideal TACoS will depend on your goals and margins, but can be thought of simply as ‘what portion of my margin am I comfortable commiting to ad spend?’. Eg. monthly revenue of £40,000 x ideal TACoS of 10% = a budget of £4,000 per month.
If you’re yet to launch on Amazon and have no data to use for these calculations, but want to use Sponsored Ads from the outset, we would generally recommend a medium 4 figure amount per month.
#3 – Set Your Targets
Similar to setting a budget, you need to have an idea of how you’re going to measure success. The most important KPI will depend upon what you’re trying to achieve. Recently launched products should focus more on sales and traffic growth, whereas established products might prioritise ACoS. Here’s a rough guide to your KPIs depending on where your products are in their life cycle.
Product Launch: Growth in traffic and sales
Established Products: ACoS, and steady or growing sales over time
Clearance Products: ACoS
#4 – Make Time and Find Talent
Before you launch your Sponsored Ads on Amazon, consider what will be needed to manage them. This will of course vary depending on the size of the account, however an absolute bare minimum of 1-2 hours per week is needed just to keep an account in check, and that’s assuming it’s relatively small and performance is quite stable.
You’ll also need to consider whether you have the expertise in-house, or if you need to outsource. Don’t make the mistake of thinking that it’s just like Google Ads or Facebook Advertising. While there are similarities, Amazon’s algorithm works in a distinctly different way, as do their ad formats, and you may need to work with accredited experts.
Amazon Advertising, and Amazon Marketing services in general, are relatively new to the agency offering. However, you always want to make sure you work with Sponsored Ads Accredited agencies in order to make sure you see a healthy return.
Published date: March 2 2020