Skai’s latest white paper outlines the pro tips and pitfalls you need to know about when developing your Amazon advertising strategy
Amazon is becoming an advertising platform businesses simply can’t ignore. It’s projected to earn $38 billion in ad revenue by 2023, making it the third biggest ad supplier in the U.S. behind Google and Facebook. A whopping 80% of marketers who currently advertise on Amazon are looking to increase their budgets for the platform this year.
However, advertising on Amazon is a completely different ballgame from advertising on Facebook or Google. In fact, it might be a completely different sport. To help brands navigate the often tricky world of Amazon advertising, Skai has released a new white paper called “To Win at Amazon, You Must Think Like Amazon.”
Here are a few tips from our experts:
Amazon advertising strategy tip #1: align organizational structure with the customer in mind
Amazon bills itself as “Earth’s most customer-centric company,” and honestly, it’s difficult to think of any other place that can have pet food, shampoo, and a new record player hand-delivered to your door within forty-eight hours. 100 million people in the U.S. alone pay Amazon a yearly fee upwards of $100 because they know a good value when they see it. Becoming an Amazon Prime subscriber means customer service on a level that most businesses simply can’t match.
And just as Amazon Prime has instilled an unshakable sense of loyalty in Prime subscribers, Amazon can also be a place for your business to build your brand, foster customer loyalty, offer detailed product information, and ultimately, sell your goods. However, in order to succeed on Amazon, businesses must take a cross-functional approach that aligns goals across sales, marketing, and operations in order to work within Amazon’s parameters for keeping the customer experience at the forefront of all your brand’s objectives.
Amazon advertising strategy tip #2: rethink lifetime value
Unlike other platforms, where one advertising dollar is just as good as another, Amazon is actually pretty selective about who gets to advertise because their focus is on selling products, not selling ads. So, for instance, if your brand runs out of stock, Amazon’s algorithms could lower your relevancy and eligibility, meaning it can take months to get your brand back on track.
And while the prospect of a temporary glitch taking months of course correction may be a bit frustrating, evaluating success on Amazon simply means shifting the way we perceive ROI. The Amazon advertising landscape requires a focus on lifetime value (LTV). A new customer’s first order might not amount to much, but over time, building loyalty generates positive LTV in the long run as customers–and Amazon’s all-knowing algorithms–come to trust your business.
Amazon advertising strategy tip #3: get creative with data
Marketers are used to pretty comprehensive campaign planning—researching, planning, targeting, buying, measuring, and optimizing—that utilizes customer data at every step. But unlike Facebook and Google, which offer advertisers deep insights into customer behavior, Amazon keeps its data pretty close to the vest, which can be a challenge for marketers used to having a wealth of readily available insights.
That’s not to say advertising on Amazon is a shot in the dark. Instead, Amazon sellers should focus on the Amazon-specific data points that matter most on the platform. For example, according to the Cleveland Research Company, more than two-thirds of product clicks come from products listed on the first page of search results. That knowledge can better arm marketers to strategize for the all-important first page, perhaps using new tools or technologies specifically designed for optimizing Amazon search results.
Amazon advertising strategy tip #4: maximize profitability
Of course, the main point of Amazon advertising is profitability, even more so than on other, more traditional, platforms like Google and Facebook. Common sense says that if you’re a courteous seller that keeps prices low, minimizes shipping times, and earns great reviews from customers who keep buying, Amazon’s clever algorithms will reward your effort. But the stakes are growing ever higher. Failure to keep up with Amazon’s customer-centric model could result in pretty harsh penalties, including Amazon revoking a seller’s right to advertise altogether.
Avoiding the pitfalls of navigating the new world of Amazon selling and advertising can be difficult for businesses used to a more segregated effort in which marketers, sellers, and operations experts often work independently of one another. A multidisciplinary approach is critical to Amazon success. And the new reality is that the larger your product catalog, the more important it is to know every move–and misstep–your brand is making on the platform, which will probably require not just adapting strategy, but adopting new technology to make sure you’re playing by the rules of an entirely new game.
Download the free white paper today
For more information about how to adapt your strategy for an Amazon world, check out our new white paper “To Win at Amazon, You Must Think Like Amazon.”