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Originally published on December 29, 2020, updated April 12, 2023
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Learn about three strategies for improving your Amazon ad performance in this guest article from Ihor Dubovetskyi of Profit Whales.
As 2020 comes to a close, the year of social distancing understandably brought an even bigger shift into online spending. Amazon has certainly reaped the benefits—the marketplace's estimated sales revenue rose by 37% compared to Q4 2019—and it appears that this buyer behavior isn't going anywhere.
Yes, brick and mortar shops will reopen as normal in 2021, if they haven't already done so. And yes, there are still plenty of products that some buyers would prefer to purchase offline, but let's face it: the blood is in the water.
For most products, buying them online is the most convenient way to shop. In fact, some researchers expect the total increase in US online retail for 2020 to beat that of the previous two decades combined.
So, it should come as no surprise that sellers will have to factor this new reality into their Amazon advertising strategies for 2021. In doing so, here are some things to consider:
Some less popular brands will have already bailed out. The survivors are struggling to get a share of shrunken demand to stay afloat. And, unfortunately, it will still be some time before they see the rainbow after the storm in 2021.
We’ve summed up some dedicated Amazon advertising strategies below that are somewhat different from the ones we’ve used in previous years.
These have done their job for our clients in 2020, and we intend to carry them over into next year.
This Amazon advertising strategy is used in growing markets. The goal is to skim maximum profit out of a favorable situation.
Check out this Amazon ad sales pattern:
We find this strategy to be best suited for products that already enjoy a well-established brand name, strong listings, and solid reviews. If your product is in the Top 10 of a given subcategory, this strategy is highly likely to work for you.
Most keyword bids are set below average. Only the keywords with high CTR and conversions get high bids, as long as the ACoS stays under a comfortable percentage. There is no use of automated campaigns and very limited use of broad keywords — to keep looking for new potential effective targeting options.
The Display Ads provide us with a very neat way of remarketing the products to both our current and similar customers. For this strategy, we tend to run it on low bids, retargeting customers who showed interest in our products. But we do so only if such products are by their nature purchased with some consideration (e.g., earphones or a mini air conditioner). In any other case, Display will not help.
The only way we would be using Sponsored Brand ads for the Cream Scooping Strategy is by advertising the best-selling product (or a bundle of similar ones). And we replace the logo with another product picture and write a number of creative texts, tailored around very specific keywords we use to target these ads.
Like with all risk-high reward strategies, this one works best for seasoned Amazon sellers who are confident in their product and have an ample supply of cash to temporarily push their ad costs into the red zone.
The reward is also big: either getting ahead of near top competitors or winning the Best Seller badge off the current leader. The Afterburner Strategy will have a chance to work only if used for no less than three consecutive weeks due to the way the Amazon algorithm responds to an increase in sales.
Pedal to the metal! You crank up the bids for all of your top-performing keywords. Keep the bids above the top part of the Amazon recommended bid fork.
Consider switching the bids to fixed, but try them out before you start the strategy to see if they work for your particular product.
Unless your Display ads (either retargeting old customers or engaging the new ones) gave you some extraordinary sales figures, they will play a small part in this race.
When you play big, everything counts. Make a bunch of variants of your SB creatives, test them beforehand, and have the best ready to activate with the Afterburner Strategy. If your market has a few strong sellers (and you are about to take them head-on), flying your colors above the search result for top-performing keywords (even at 3-digit ACoS) softens the competition below.
Whenever sellers think of PAT (Product Attribute Targeting) ads, most probably think of snatching a couple of sales from their weaker competitors.
But for some products, there is a far better (and more cooperative) way to use the PAT approach.
The bread and butter of the Care Bear Strategy is finding successful products that are naturally compatible with yours. From our experience, superglue goes nicely with modeling kits, snorkeling equipment is a welcome addition to beach towels, and one type of outdoor lights was making 50-60 sales each week piggybacking on Amazon's gardening tools brand.
For a seller, it requires intimate knowledge of both your product’s usages, your customers, and the wider market awareness. And yes, there can be more than one such market.
Unlike preying on weaker competitors' ASINs, the potential complementary ASINs are easier to spot. They typically boast lots of good reviews, solid listings, top search result positions in each of their niches, and Best Seller or Amazon's Choice badges (the best indicator).
Just be aware of the pricing! The product page or Amazon search results ad slots can be pricey because of local competition, especially if your product costs far less than the targeted one.
Same as with Sponsored Product—target the discovered top complementary ASIN ads and see if the Display can add to your sales at a decent ACoS.
We didn’t find this strategy to be particularly useful for the Care Bear Strategy.
Implementing these approaches to your Amazon advertising strategy requires you to focus differently on each of the campaigns and targeting that you use. This is much easier to do with a well-structured Amazon PPC campaign. You can read more about Amazon PPC Campaign Structure here.
We hope that you learn something interesting from our discoveries. The Amazon market will keep reshaping itself in 2021 and finish what began in 2020. We wish you all to take a better spot under the new sun. Good luck!
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