What is Amazon Marketing Services & Can it Make Me Millions?
by Matt Ellis, on July 6, 2017
If you’re an Amazon vendor and want to advertise your products on the Amazon site, it might occur to you that maybe, just maybe, Amazon can help. It certainly occurred to them, and that’s why they started the Amazon Marketing Services (AMS) program.
Launched in 2012, the Amazon Marketing Services platform provides smarter and more efficient advertising options to Amazon vendors through keyword-targeted campaigns. What that means, in simpler terms, is that Amazon.com, Inc. ("Amazon") leverages its vast search database to make sure your ads appear in the right place and time, and for the right people.
But how does AMS work? How much does it cost? Is it even worth it?
No matter what you’re selling on the Amazon marketplace, you have something in common with other merchants: you all want to increase sales. Naturally, you’re curious about the promise and potential of AMS in achieving this end and want to know more.
This article will answer the most basic questions about Amazon Marketing Services as mentioned above. In future posts, I’ll go into an even more advanced analysis, but let's start here with an overview.
What Services Does AMS Offer?
For starters, Amazon Marketing Services is only available to vendors, representatives of vendors, and Kindle Direct Publishing account holders. Merchants need to be invited to join the Vendor Central platform before taking advantage of the perks of AMS.
If you ask Amazon, they say AMS can “build impactful ads quickly and easily to drive sales.”
How? The short answer is “big data.” The slightly-less-short answer is “they utilize their site’s big data to more precisely target your ads.” AMS calculates the type of customers that are most likely to buy your product, and — after some customization by you — makes sure they see your ad.
But how exactly do they match a shopper with a fitting advertisement?
- Shopping History — Based on the past purchases and searches, Amazon compiles fairly reliable shopping dossiers of their customers. The more they visit Amazon, the more accurate the report. From there, it’s just a matter of matching shopper interests to the right products.
- Related Products — Amazon also monitors which products are bought or searched for together. Someone who doesn’t know your product exists may have a need for it. If your product is related to another, Amazon will display the ad on the related product page so that the visitor knows there are additional options.
- Keyword/Product Type — AMS doesn’t abandon the old-fashioned way. You’re still able to specifically target people searching for certain keywords or types of product.
- Search Intent — Everyone has their own way of navigating websites, much to the chagrin of information architects. But sometimes there’s a difference between what a customer wants in their mind, and what words they use to type into the search bar. The intuitive technology of AMS offers better search results by saving the searcher from themselves. This technology is equally applicable to marketing and ad placement as it is to the site’s main navigation.
The Amazon Marketing Services algorithm is still young and a bit immature compared to other advertising platforms — but regardless, it’s responsible for enough success stories to validate its effectiveness.
It’s not as automatic as it sounds either. Vendors are free to choose what kind of ad they want and to some degree where it appears on the screen. These are strategies that I’ll explore in my next post.
Cost: Pay Per Click
One of the best features of Amazon Marketing Services is its scalable pricing. With the pay-per-click model, you don’t pay a dime unless someone clicks your ad and visits your product page. You set a daily budget to ensure you never spend too much, and then Amazon takes care of the rest (aside from any optional campaign customization from you).
This creates a virtually risk-free payment plan with safeguards against overspending – a great boon to the lesser-known vendors that need AMS most. You can put whatever price tag you want on the advertising services and AMS will work within that range.
Considering the high-tech data manipulation and the low-risk pricing plan, there are plenty of reasons to implement Amazon Marketing Services into your marketing campaign.
More Efficient Advertising Spending
Advertising in general is never a sure thing, but Amazon mitigates most of that risk with its pay-per-click pricing plan. By comparison, advertising platforms that offer a flat rate are wasteful – you’re paying for impressions from people who have no interest in the ad alongside those that do.
AMS and other pay-per-click systems trim the fat so that you only pay for actions that help you. Try getting that deal from an interstate billboard.
Levels the Playing Field with Bigger Merchants
The more sales you get, the higher Amazon ranks you in its product searches. It’s natural selection, sure, but puts new vendors at a disadvantage. Those just starting out may never even get the chance to get off the ground.
AMS helps balance the competition, albeit for a price. Any company willing to pay can essentially buy the same visibility enjoyed by already established vendors. And with the pay-per-click pricing, small vendors can still participate without breaking their budget.
Built-in Analytics Lets You Monitor ROI
The open-ended pricing gets even better when AMS provides you with the tools to determine the perfect price. Built-in analytics reveal the data that show you the return on investment (ROI) for your AMS campaigns. You can compare how much you’re making against how much you’re spending to set the perfect price cap per day, as well as raise some insight into improving your campaign parameters.
Low Risk, but Not Magic
Under normal circumstances, you should be wary of anyone who promises a shortcut to sales, but considering the pricing plan, you really have nothing to lose. You can always try it yourself for a minimal investment and see just how much it helps.
On the other hand, don’t expect AMS to magically solve all your problems without any effort. Like all marketing campaigns, there’s a degree of finesse and micro-managing necessary to optimize the results. Those higher-level techniques of how to use AMS are the topic of my next few blog posts.