Amazon is not only a retailer and marketplace, but it also offers vendors and sellers exciting advertising opportunities. The online giant’s share of advertising revenue is growing rapidly, both in the USA and in Europe. It is no wonder since the main pillars of its portfolio are Search and Programmatic Marketing. Combine the two and you can reach potential customers across their entire customer journey – both on and off Amazon. Advertisers can especially benefit from Amazon’s data trove because no other company knows its users as well as them – no one can display ads to customers as precisely as Amazon.
How does it work? We will give you the answer to this question.
What is Amazon Advertising?
Amazon’s advertising measures are based on search engine and programmatic marketing. While Sponsored Ads (Sponsored Display. Sponsored Products and Sponsored Brands) function similarly to Google Ads and are shown based on selected keywords, DSP is Amazon’s programmatic marketing solution. This means that customer data is analyzed in real-time and advertisements are automatically displayed where and when they are most effective.
Sponsored Display Ads
Amazon Sponsored Display Ads are a self-service display advertising solution with auto-generated display creatives, designed to inspire shoppers to purchase your products. Available for desktop and mobile, display ads appear on product detail pages, search results pages as well as third-party sites (with audience retargeting) and allow you to reach shoppers throughout every step of their purchase journey.
Sponsored display ads allow advertisers to use first-party shopper insights, including interests, categories and ASINs to target audiences as opposed to keyword targeting. This means you can specifically target those who are most likely to purchase your products based on their shopping behavior.
Benefits of Sponsored Display Ads
- Bring traffic to your product detail pages: Increase your brand awareness and exposure for new products using Sponsored Display ads. You can gain traffic from your competitors and direct those relevant shoppers directly to their products with display ads.
- Boost impressions: Display ads can help you retarget those who have viewed your products in the past without making a purchase and target those who have viewed similar products or exhibited relevant shopping behaviours. Use display ads to increase your upper funnel appeal, capture shoppers’ attention and draw them down the funnel. Because you can place your ads under a competitor’s listing, you can display your best products directly next to theirs.
- Large budget and creative creation not necessary: The CPC model and the automatically generated creatives allow advertisers to increase their presence and expand their reach exponentially to specific product detail pages without breaking the bank. Increase your product awareness, consideration and conversion.
- Brand safety tools: Amazon has implemented brand safety tools that deliver your ads to trustworthy placements. This means they are appearing only with appropriate and relevant content. Third-party integrations allow Amazon to protect you from invalid traffic, unauthorized sellers and unsafe content and first-party traffic quality to monitor for unsafe content. Amazon manually reviews third-party websites and apps and blocks them from Amazon if deemed necessary.
Sponsored Products Ads
Sponsored product ads are intended to help promote products in search results and on relevant product pages. This type of advertising works in such a way that the buyer is taken to the relevant product page when they click on the ad.
Benefits of Sponsored Products Ads
- Improved visibility: Ads appear exactly where customers will see them on Amazon. They are simply placed throughout the shopping results pages as well as on the product detail pages, where shoppers can clearly see them.
- Increased Sales: Advertisers can reach customers who are browsing for similar products and immediately direct them to your product page.
- Controlled costs: The cost-per-click (CPC) pricing model means you only pay when shoppers click on your ads. This makes it easy to control exactly how much you spend by setting a budget and choosing what you are willing to bid per click (see bidding breakdown). Sometimes, Amazon will automatically pause the campaign if the product is out-of-stock, but to be sure, it is best to manually pause campaigns if a product is no longer available.
- Automatically Generated: Auto campaigns permit easy keyword harvesting, especially when advertising in a marketplace with a different language.
- Easily Measurable: Different sales and performance metrics are available with Sponsored Products that provide insights into the impact of advertising on your business and help you optimize future campaigns. According to Amazon, ASINs saw an average weekly +54% increase in glance views and a +40% increase in the units ordered weekly average within the first year of using Sponsored Products.
Sponsored Brands Ads
Sponsored Brands ads on Amazon are a customizable, cost-per-click advertising solution that can include a product image or video along with a title. These ads allow vendors and professional sellers to tell a story about their brand to engage new and returning customers.
When different aspects of the Sponsored Brands ad are clicked, the shopper is directed to your product detail page (when they click directly on the product), Brand Store or a simple landing page (when they click on other parts of the ad).
These ads can include the advertiser’s choice of a brand logo, custom headline, custom imagery and three products with images (or one product with a video) in a prominent search placement, helping shoppers not only discover but engage with their brand.
Benefits of Sponsored Brands Ads
Sponsored Brands help increase brand visibility and drive product awareness because the prominent ad placements (i.e. at the top of search results) allow you to easily meet your shoppers while they are searching for what to buy on Amazon.
With custom headlines, you can portray your brand message and create a consistent shopping experience for your customers. Shoppers can click your brand logo, which will direct them to your Amazon Brand Store or a custom landing page. They can also click the product in your Sponsored Brands ad, which will direct them to the respective product detail page. Sponsored Brands Ads allow brands to create their own branded shopping journey within the Amazon cosmos. With a customizable headline and the ability to incorporate your brand logo, this type of ad allows you to maintain a consistent brand image across Amazon and your own channels while the cost-per-click pricing model keeps costs under control.
Amazon DSP
Amazon DSP is a demand side platform that allows advertisers to buy ads with expansive reach, cross-device user attribution and extremely precise targeting. With the DSP, advertisers can buy ads from Amazon’s own inventory of websites (e.g. amazon.com, imdb.com, etc.) plus hundreds of premium third-party publishers in the most important regions that feature ads on websites such as spiegel.de for Germany, guardian.co.uk for the UK, or politico.com for the US. The publishers are checked against Amazon’s strict safety policies so that brands are always safeguarded. The impressions and clicks are free of ad fraud (such as bots viewing your ads) – Amazon checks each incoming bid for authenticity.
The available media types comprise display ads and video ads while campaign performance reporting is transparent, and thorough and takes place in real-time. Advertisers are billed on the basis of impressions (CPM – cost per a thousand impressions) rather than clicks, which is generally more cost-effective than CPC (cost per click) in the programmatic environment. This is mainly due to the fact that these campaigns focus on reach and not on interaction.
The online giant has been cataloguing the behavior of its shoppers for decades, making it the leader in targeting optimization. By utilizing Amazon DSP, brands can now tap into this source. With In-market segments, advertisers can target users who are very close to making a purchase in specific shopping (sub-)categories between the last 7 to 30 days, whereas, with Lifestyle segments, it is possible to target shoppers who have shown search, browsing and purchase behaviors for up to a year in the past. Depending on the category, one can target for instance home-decor enthusiasts or Marvel superhero fans. In addition to that, you can also make use of tracking pixels to create new audiences or use your existing customer base to generate lookalike segments.
Note: Lookalikes are Amazon users who possess the same purchasing behavior as your customers.
You can also exclude users who have already bought from you and are unlikely to convert again. Furthermore, it is possible to connect other data management platforms to the DSP and benefit from 3rd party data in this way. With all these targeting options, Amazon is steadily taking over as a comprehensive advertising platform. You don’t have to rely on just demographic data and isolated data management solutions anymore.
If the targeting options and reach potential is not enough to convince you to give Amazon DSP a shot (though they really should), then consider what you can achieve with it. The DSP is regularly used for retargeting consumers who have visited an Amazon product detail page with the goal of converting them, which can very positively reflect in the ROAS of your product portfolio on Amazon. However, one of the great advantages of the Amazon platform lies in its flexibility. Unlike Sponsored Products and Sponsored Brands, the DSP does not circumscribe you to the Amazon ecosystem. This means that your ads can link out to websites that feature products and services not sold on Amazon. The range of possibilities is vast – you can direct the audiences to landing pages, brand stores or any other websites on a domain of your choosing, all the while exploiting the treasure trove of Amazon data.
Amazon DSP: New-to-Brand (NTB) Metrics
The new key figures help you measure which of the sales generated through the campaigns can be attributed to new or existing customers.
You can use the new metrics to measure and optimize campaigns that target new customers. The same applies to marketing measures aimed at increasing customer loyalty and targeting existing customers.
You can also analyze the cost to acquire new customers across the channels. Based on the data gained, future marketing measures can be better planned and new customer targets can be reached more efficiently.
In order to determine which Amazon users are new customers of a brand, the retail giant views their purchase history. First-time buyers are classified as users who have not purchased a product of the brand on Amazon over the past 12 months, which does not only consider sales attributable to ads according to Amazon’s attribution model but also organic sales.
Attention: New customer data can be retrieved retroactively until 1 November 1, 2018. If you select a date before this, the start date will automatically be set to November 1 during the calculation.
How to use the new New-To-Brand KPIs
There are different ways to use the new key figures. One option is to optimize DSP campaigns to gain new customers.
Best Practice: Ads should run for at least 14 days to collect a meaningful amount of data before the criteria can be adjusted.
If sufficient data is available, optimization can begin. In order to accomplish this, you must look at the available new customer metrics and analyze which line items have the highest percentages of new customer orders (percentage of New-to-brand purchases).
Various factors can influence why line items achieve a comparatively high proportion of new customer purchases. These include, for example, the targeting orientation and the ad design. Another possible criteria is the supply source. Do some supply sources, such as the Amazon Shopping App, third-party apps or Open Exchanges, perform better than others?
Using cost-per-click metrics such as the New-to-brand eCCP, New-to-brand purchase rate or New-to-brand ROAS, marketers can measure and compare how efficiently new customer acquisition can succeed through DSP measures. It is important for the optimization to constantly monitor the performance of DSP campaigns and, if necessary, to adjust the criteria.
Amazon DSP & Twitch
Amazon Advertising is partnering with Twitch, a video live-streaming platform (think YouTube or live television) where millions of users come together daily to game, stream or just chat. Though Twitch has been a part of Amazon since 2014, it made targeting available via the Amazon Demand Side Platform (DSP) in September 2020 to a limited set of locations and has now expanded both targeting and video placements to EU5.
Amazon DSP offers advertisers the opportunity to buy display, video and audio ad placements with the ability to target audiences both on and off Amazon. Advertisers using DSP can reach customers on Amazon-owned websites and apps as well as through Amazon’s publishing partners and third-party exchanges, expanding their reach far beyond just shoppers on the Amazon website. Now, when choosing video inventory, advertisers can select Twitch as the supply source and run campaigns across Twitch mobile and desktop as well as Smart TV and consoles.
Currently available as video inventory, advertisers can book instream (pre-roll and mid-roll) videos individually and in combination with other video supply sources. These ads are shown directly on Twitch channels in the form of 30-second maximum, non-skippable ads with the ability to click and “learn more” when viewed from a desktop or mobile device.
Advertisers buying Twitch inventory through Amazon Advertising now have a direct line to both Amazon’s first-party behavioural data and Twitch’s loyal audiences. These brands can now reach the younger and more highly engaged consumers that frequent both the streaming platform and Amazon’s website, address the diverse interests of the Twitch community and recruit new customers.
Twitch segments are now available worldwide in the Amazon DSP based on viewership categories. During campaign setup, you can choose from a variety of Twitch Lifestyle Audience segments (i.e. Console Game Viewers, Non Gaming Viewers, Sports Viewers, etc.) in accordance with your specific targeting strategy. In addition, as of March 2021, it is now possible to Twitch viewers of your ads and bring them directly to your product pages or brand stores for direct conversion.
Amazon DSP for Non-Amazon Business
Amazon’s Display Advertising program (DSP) offers huge opportunities to Vendors and Sellers to increase sales or brand awareness not only on Amazon. Almost everyone can benefit from the wide range of data and customer behavior knowledge that make the Amazon DSP program so unique and valuable. Watch the video and discover how you can make use of it without even selling on Amazon and how to pump tons of highly qualified traffic into your direct channel. Easily reach your goals whether you are performance- or awareness-driven or even if you sell B2B. Tune in and listen to Soeren’s 30min Live Stream to stay on top of the game.
By using Amazon Sponsored Ads and the Amazon Demand Side Platform (DSP), a powerful Amazon sales funnel can be designed.
Proper usage of Amazon Advertising requires that you distribute your marketing budget in a target-oriented way. The business goal determines in which phase of the sales funnel it makes sense to invest. Investing in the lower funnel is more promising with regard to the ROAS since the probability of a purchase is much higher here. However, if you discover that your advertising measures do not (or no longer) achieve satisfactory results in the purchase phase, it makes sense to invest the budget further up in the funnel. For instance, it is possible that the brand is still unknown – only a few users search for it and open the product pages. To increase traffic, fill the funnel from above. However, at this stage, you should focus on other indicators than Sales, ACoS and ROAS, as they no longer deliver attractive results here. Suitable KPIs in this phase are for example Impressions or Traffic.
We have many years of expert know-how, we manage Europe’s largest Amazon Advertising budget, and we are happy to develop tailor-made advertising strategies for your Amazon business.
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