One of the best ways to use the full power of Amazon is to tap into its advertising capabilities. With such a huge reach into consumer markets, it’s a unique channel for advertising specific products, building your brand awareness, and more.
We cover more about creating a comprehensive strategy for Amazon in our Complete Guide to Selling on Amazon in 2020, but in this article, we’ll focus exclusively on marketing. Keep reading to learn more about marketing and advertising on Amazon and get some helpful tips on how to improve your ROI on your ads.
Amazon is an incredible platform on all fronts. With an massive reach (to the tune of 47% market share in the US and UK and 31% market share in Germany), it’s an incredible outlet to showcase products, earn more sales, and build brand awareness.
Amazon marketing strategy
Amazon uses the high runner strategy to market its products. This strategy uses data to uncover which products are in the highest demand in every category. Amazon's pricing algorithm then prices those products competitively and bids heavily on advertisements to pull people to these products. Once a consumer is on the Amazon site, they’re likely to buy accessory products at full price.
How to target Amazon sellers on Facebook
Search Facebook groups for Amazon Sellers and see if there are any interesting groups to join. You can even try localization efforts and look for Amazon seller groups in your area.
Note that many of these groups are intended for Sellers to form a community; as a result, many don’t tolerate any “selling” within the group. Regardless, connecting with others in this community is a great way to get in touch with potential customers and learn more about your target market.
You can use this information to run better targeted campaigns on Facebook. You can discover who big names are in the Amazon Seller community, then run ads based on the audiences that like that public figure’s Facebook page.
You could even reach out to the public figure and see if they would be interested in marketing your product directly to their audience.
What is Amazon’s marketing service?
Amazon Marketing Service was Amazon’s first portal for product advertising. It has since been retired and replaced with Amazon Advertising. This new portal is a simplified way for Sellers to control all their media, marketing, and advertising under one unified umbrella.
Amazon Advertising is where you’ll find all advertising options available to you. There are currently three different types of paid ads that you can buy.
Below is a great 3-minute video about Amazon Marketing Service and how it works.
How Amazon uses big data to boost its performance
Before getting into the logistics of Amazon’s advertising program, it’s important to understand what makes the platform different from other marketplaces: data.
Consumer data may be Amazon’s most valuable asset. And Amazon has a lot of it. As Neel Mehta, Parth Detroja, and Aditya Agashe wrote for Business Insider,
[Amazon has] 1.5 billion items listed for sale and 200 million users. Amazon has one billion gigabytes of data on their items and users. If you put all that data on 500-gigabyte hard drives and stacked them up, the pile of hard drives would be over eight times as tall as Mount Everest. Now that's some big data.
Amazon’s goal is to learn as much about consumer shopping habits to deliver better experiences to customers. Amazon knows which products are popular, when they purchase it, how much they pay, and more.
Amazon uses data to boost its performance through three main measures.
First and foremost, it uses data to adjust prices and capture more margin via a high-runner strategy.
Second, Amazon uses consumer data to power its advertising business. In 2018, Amazon made $10 billion USD in revenue from advertising alone. This made Amazon the third-largest advertising business that year. For comparison, Facebook made $16 billion on advertising in 2018 and Google sold $135 billion worth of ad space.
This is a powerful number, and it makes Amazon nearly impossible to ignore as an advertising space in its operating markets.
How does Amazon promote its products?
Amazon may also use this consumer data to develop its own brands.
The AmazonBasics label has been around since 2012, but in the last few years the label has exploded. Rachel Kraus reported in an October 2019 Mashable article:
Amazon launched AmazonBasics, a line of everyday products like batteries and cookware, in 2009. It has been growing its private labels ever since, constructing more than 100 fashion, home, and electronics brands in the last 10 years. In 2017, private label brands accounted for $450 million in sales. And in July 2018, analysts estimated that private labels would account for $7.5 billion in sales in 2018. (Amazon has not yet released its 2018 annual report.) Amazon sells its private label products in its Marketplace, right alongside nearly identical products from independent sellers.
Advertising on Amazon involves coming up with a strategy, paying for ads, and creating great product pages that drive sales.
How do I advertise on Amazon?
Setting up an advertisement on Amazon is easy. Just log into your Seller Central account and navigate to the “Advertising” tab. From there you can pick the products you want to promote, set up a strategy with keywords and bids, then launch your first campaign.
Amazon advertising in the UK, Netherlands and USA
One of the best perks of advertising on Amazon is the ability to reach a global audience. Certain Professional Sellers have the option to display their advertising listings across different marketplaces around the world.
The best part? No translations. Amazon will help you get your advertisements in front of the right audiences internationally by targeting relevant customer searches. It also gives you data on these search terms so you can learn more about your audience in the country (and make more sales).
To get started with international advertising, log into your Seller Central account, find eligible international marketplaces, and create a campaign for your products in that marketplace.
Amazon advertising on my website
Marketing your Amazon products doesn’t begin and end on the Amazon platform. You can also connect with Influencers to get your products in front of engaged audiences via the Amazon Affiliate Program.
In the Affiliate program, Influencers generate unique links to your Amazon product listings. They can then place these links across all their channels, whether that’s a blog, a Youtube channel, or even Pinterest.
While Influencers can pick and choose which items they want to advertise on their channels, it may be worth it to reach out to them directly and offer a partnership: you can provide free product, and the Influencer can promote your products with an affiliate link.
Influencers can earn up to 10% of the profits when someone purchases through their Amazon Affiliate link. If the Influencer has a large enough audience, this can easily be a great source of (recurring) revenue for your Amazon products.
Amazon a+ page examples
Amazon has a premium program called A+ Content that helps you build product pages that are inspiring, informative, and conversion-focused. The program is only available to professional sellers who have been approved as brand owners.
A+ Content lets you put more multimedia content on your page through the form of several different types of widgets. You can add rich text, additional images, videos, and more through A+ Content.
TheraBreath is a great example of a stellar A+ Amazon page. It includes the standard of four images, a video, and five compelling bullet points. If you scroll further down the page though, you’ll see the A+ Content, pictured below. It includes a table comparing different products to each other, a note about the creator, and some unique graphics that reinforce the benefits of the product.
Another nifty feature is that when you click on one of the ASIN products featured in the table, you’ll be automatically redirected to that specific product page.
If your product category is especially competitive, A+ Content might be a worthy investment. It can help make your product stand out and can improve sales conversions and increase your visibility in Amazon's search algorithm.
How much does Amazon advertising cost?
The average cost per click on Amazon is $0.97, but advertising costs depend on a number of factors, including how many competitors are also bidding on that keyword.
Amazon cost per click advertising: how much does Amazon charge per click?
Amazon ads are auction-based, meaning that you pay 0.01 cent more than the next highest bid, regardless of how high your bid was.
For example, if your bid was $5, and the next highest bid was $3, you’ll win the auction and only pay $3.01.
What is Amazon DSP?
Amazon Demand Side Platform (DSP) is a platform that enables you to programatically buy display and video ads.
Launched as a competitor to Google Display Ads, DSP allows you to create advertisements quickly and drive traffic directly to an Amazon listing. Where Google ads send traffic to a website, DSP ads link directly to Amazon. Sellers can place these ads on Amazon, but also on third-party websites.
Amazon launched this service to help bring more shoppers directly to the site. As the number of Sellers exploded on Amazon, the company needed a way for Sellers to pull in more shoppers as well.
There are four different types of ads that Sellers can purchase through Amazon DSP:
- Desktop ads: display on a user’s desktop browser
- Mobile banners: display in a shopper’s mobile browser
- Mobile interstitial ads: display across mobile and desktop browsers
- In-stream video ads: run video ads on Amazon’s websites, mobile apps, and the Kindle Fire wake screen
Why use Amazon DSP
The biggest benefit of Amazon DSP is to get access to Amazon’s exclusive market data.
As the world’s largest e-commerce platform, Amazon has incredible amounts of data on consumers. Buying into the DSP platform gives you access to this consumer data and lets you create tailor-made advertisements that match different audiences and different buying intentions.
You can not only learn more about the people who are already buying your products, but also learn more about new audiences whose interests overlap with your existing audience. If you give Amazon a sample of your existing audience, it can automatically generate a “lookalike” audience that is similar to yours.
Amazon DSP also makes it easy to reach these people. The program automatically generates advertisements based on your audience and its insights and will automatically test the performance of these ads.
Learn more about what Amazon DSP can do in the Youtube video below.
When to use Amazon DSP
Amazon DSP is a sophisticated marketing system that can help you drive more sales, but it’s not the starting point for any Seller on Amazon.
Before diving into DSP, make sure the rest of your marketing on the platform runs smoothly. This includes your PPC campaigns, but also your organic efforts through Amazon’s search algorithm.
When it comes to marketing on Amazon, it’s really no different than marketing on any other channel. Be interesting, provide value, and think strategically, test consistently, and you’ll be able to see some results.