Amazon’s 2023 fourth-quarter report reveals a 27% year-over-year increase in sales making the advertising revenue $14.7 billion. While Amazon holds 11.8% of the total digital advertising spending, Amazon advertising is a high-conversion ticket for sellers who know how to manage this tool the best.
Continuous Amazon advertising evolution and growing competition have made it quite tough for sellers to navigate through the complex maze of Amazon. But, data-driven strategies are the guiding light for sellers here.
Many Amazon Marketing Agencies offer specialized growth opportunities analysis services to enable sellers to maximize their ROI, and improve their product offer.
What is this Data-driven Approach?
Well, Amazon sellers cannot rely on intuition anymore. Now it’s all about numbers. A thorough analysis of niche, product viability, competitors, and advertising enables the sellers to devise their customized surviving kit for Amazon Marketplace.
By employing the potential of data, advertisers can effectively optimize campaigns, introduce new products, and improve ROI, and advertising performance.
Now, how to use data to formulate a smashing Amazon advertising strategy.
Well, first things first:
1. Setting the foundation: Analyzing the basic Key performing metrics
If you’re an Amazon seller, you must be familiar with CTR, CVR, and ACOS. These three metrics enable you to track campaign performance and ROI.
With the right tools, you can gain useful insights into the campaigns enabling you to identify the patterns.
Luckily, Amazon Seller Central provides us with different reports to dig deeper.
- Log into your Seller Central account
- Visit reports and then “advertising reports”
- Click on “Create report” and select the specific period for which you want to view the report.
- Click Run Report to download it.
For different ad types, Amazon offers different reports having different metrics.
For Sponsored Products ad types, the following reports are available:
- Search Term Report
- Targeting Report.
- Advertised Products Report
- Purchased Products Report
- Campaign Placement Report
- Campaign Report
For Sponsored Brands, the following are the report types that you can view:
- Keyword Report
- Keyword Placement Report
- Search Term Report
- Campaign Placement Report
- Campaign Report
For Sponsored Display ads, the following reports are available:
- Advertised Products Report
- Purchased Products Report
- Targeting Report
- Campaign Report
However, the following are the most commonly used reports for PPC campaign optimization:
- Search term report
- Targeting report
- Advertised product report
2. Finding the hidden gems using Amazon search term report:
This report provides visibility into the search terms with which users are finding your products. It also enables you to identify the search terms yielding high CVR >low ACOS and high ACOS > low CVR allowing you to customize your strategy accordingly.
Furthermore, the report offers valuable insights into how potential customers are finding your product. This information enables you to tap the untapped keywords and refine the keyword targeting, hence expanding the profitable keywords list.
By identifying the top-performing search terms, sellers can better optimize their campaigns to focus on high-yielding terms.
Hire An Amazon Marketing Agency:
Deriving valuable data from a whole lot of reports is a tedious process, requiring great attention to detail. This is very why we would suggest you leave the job to the professionals. There are several Amazon marketing agencies offering auditing services to provide you with an in-depth analysis of the account. And also suggest strategies based on the derived data.
These custom marketing services for Amazon sellers are essential in taking their businesses one step further.
Anyhow, Let’s move on to the next step
3. Optimizing with A/B testing:
With a desire to optimize better and better, marketers utilize the tool of a/b testing. It allows marketers to make a concrete decision based on the performance data rather than assumptions.
Effective a/b testing for ad copies, creatives, and two different strategies enables marketers to evaluate which works best in their favor.
For ad copies, you can test different customer engagement approaches to determine customer’s inclination.
However, product images and videos have a direct impact on ad performance, impressions, and CVR. A/b testing with different creatives enables the seller to analyze what sort of creative appeals to the audience and what does not.
For this purpose, you can also set up polls with PickFu and other such platforms.
To run effective a/b testing, sellers should make sure that they are testing one element at a time to have a better understanding of what stands out with the audience and what does not.
Structure Campaigns based on Goals and Ad types:
Being an Amazon Marketer the biggest problem I’ve encountered in an account is with the structure of the campaigns.
Clarity on objectives of campaigns:
Defining a clear structure for the campaign is essential in deriving fruitful results. But to do so, one has to be very clear about his/her objectives and goals. You need to be clear whether you want to run campaigns for ranking, brand awareness, high conversion, or generating traffic. These decisions govern the further steps of the process.
For example:
Sponsored brand ads are effective in the case of brand awareness. However, Sponsored product ads deliver more product page visits, hence better CVR.
In general, it’s important to grasp the benefits of each type of advertising campaign on Amazon – Sponsored Products, Sponsored Brands, and Product Display Ads.
Start by setting clear goals, then organize your campaigns, choose relevant keywords, and set bids based on these goals while using Amazon’s data-driven suggestions. Constantly refining and improving your campaigns is crucial to getting the most out of your advertising investment.
4. Continuous ASIN-Level data analysis for spend optimization:
It is always a wise approach to find your best-performing ASINS and direct a major share of efforts towards it.
For spend optimization, advertisers should keep a close eye on ASIN-level data. How can it help?
Well, it allows the advertiser to identify top-performing products worthy of greater budget share. This micro-level analysis offers transparency and effective resource allocation.
Start by analyzing core sales and cost metrics for ASINs within defined periods using the sponsored products dashboard. Sort products yielding higher ACOS impacting overall revenue despite conversions. Also, find the ASINs gaining above-average CTR. Especially separate the products yielding great ROI based on the goals.
This categorization enables you to prioritize where to direct most of your efforts to gain a better return on advertisement spend. In short, Amazon PPC’s success lies in constantly probing and improving the underperformers for better profit margins.
5. Employ filters to identify growth gaps:
Compartmentalizing different products based on their performance allows the sellers to identify potential opportunity gaps. This filtration also reveals problematic areas in dire need of optimization
Start with the campaigns dashboard to separate products having high impression share but low CTR. This signals the potential problem with targeting and appeal. Discover the problem, refine the keywords, or reallocate the budget for better performance.
Also, filter the data using ACOS% over a specific period. Doing so will enable you to group the products based on their overall profitability based on set goals. For example: low ACOS products will uncover the most profitable products, however, the high ACOS will help you discover the underperformers. By doing so you can group products by profitability based on margin goals.
In Essence:
The key to success in the Amazon marketplace is critical data analysis. Amazon is continuously making an effort to provide minute details to the sellers to provide them with opportunities to flourish on this platform.
Mastering Amazon advertising isn’t possible without in-depth data analysis, vigilant optimizations, and effective performance management. However for effective data analysis, one must have clear objectives and goals.