3 Top Amazon Sponsored Product Ad Mistakes to Avoid
Product sales on Amazon is still overwhelmingly driven by search. Sally Soccer Mom goes to amazon.com on a quest for a new Pizza Cutter. She types in “Pizza Cutter” into the search bar and presto….product titles, images, prices, product ratings, and offers jump out at her begging to be clicked.
This scenario is repeated millions of times everyday. In August of 2017 SEMrush.com estimated that 325 million visitors went to Amazon.com in search of something. That’s 10.8 million ready-to-buy shoppers visiting Amazon….Every. Single. Day. That number will spike to 16-20 million per day when holiday shopping kicks into full gear (and these are likely low estimates as they don’t include mobile app visits).
So how do you get your share of those buyers?
Ask any top seller on Amazon and they’ll tell you that Amazon Sponsored Product Ads play an important role in their growth.
Whether your goal is to push for higher organic rankings, increase sales volume and profits, or launch a new product, Sponsored Product Ads can do a lot of heavy lifting for you. But, there’s a problem. Well, 3 problems actually. Our firm specializes in managing Amazon Sponsored Product Campaigns…as well as Google Search Ads. Since 2010, we’ve seen it all when it comes to search ads.
Here are the 3 mistakes we see over and over again with Sponsored Product Ads…
Mistake #1: Lazy Keyword Strategy
Choosing the right keywords to target with your ads is crucial. So the question is, what keywords should you target with your ads? The key is first determining what keywords will allow you to show up in front of the right shoppers. But, it’s equally important to find keywords where you can stand out from the competition and win the sale. Unfortunately most amazon sellers get kinda lazy here. We see two types of keyword laziness that can cripple your campaigns.
- Obvious Keywords Only – If you’re selling Pizza Cutters, to use our example from above, then you would just focus on obvious keywords like “Pizza Cutter” and other close variants. The issue is that this is often too narrow in focus. Also, generic keywords like this are often super competitive….meaning they are EXPENSIVE. They have their place, but if you focus only on the obvious then you are leaving sales on the table…and likely paying a premium in the process.
- Auto Only Keywords – The other form of laziness we see is just turning the keys over to Amazon and letting them run with it. This approach is too broad, too open. By itself it will lead to waste and missed opportunities to scale and grow. If you are auto-only you don’t have a chance to double down on what’s working and scale back on what’s not. That said, auto campaigns can be a great source for discovering new keywords that you never would have considered. “Long tail keywords” to use industry jargon or very detailed keywords are often the most profitable keywords you can target. And while individually they don’t have the same traffic as the obvious keywords, when you combine all of the long tail keywords together the total traffic available is huge.
85-100% of the clients we look at are way, way under-leveraged with their keyword structure. Also, your keyword strategy is NOT a set it and forget it endeavor. You should be reviewing keyword performance weekly or preferably several times per week to optimize. You need to constantly be pruning underperforming keywords, boosting effective keywords and discovering new keywords.
Mistake #2: Bidding Blunders
The next most common mistake behind keyword laziness is either bidding too much and driving your ACoS (Advertising Cost of Sale) through the roof. Or bidding too low and not seeing any results.
What should you bid? When should you bid up or down? How often should you consider adjusting bids? If you’re spending more than $10,000 per month then the answer to how often you should look should be daily! The answers to what you should bid and when you should change your bid is….it depends!
The key here is to know your numbers. And know your overall goals. Knowing what you are trying to accomplish can dramatically shift your strategy. You also need to have your ACoS goal squarely in mind. And you need to understand your profit margins and your total fee responsibilities (referral fee from AMZ, FBA fees, etc.). We typically see 4 main bidding strategies that work well for different goals.
- Bidding to Rank – This bidding strategy is aimed at driving sales from ads in order to increase your organic rankings for desired keywords. This is a long-term approach and therefore calls for higher ACoS targets. Here you aren’t looking to be profitable directly from the sales from ads, but rather profitable from all the organic sales you’ll get as your organic rankings climb due to the increased sales velocity from your ads.
- Bidding to Scale – Growth! This is where you are just looking to sell as many products as possible and you’re looking for the halo effect. As you get more visibility through ads, you’ll also see your total sales grow. Meaning people might find you through a generic search like “pizza cutter” initially but then come back later and purchase after looking for your product by name.
- Bidding to Launch a New Product – The first few weeks and months for a new product are critical. You desperately need to get some visibility, drive some product reviews, and generate some sales velocity in order to gain some momentum. This strategy usually involves really high ACoS targets in the beginning. After your products gain some traction you can move toward bidding for profits.
- Bidding for Profits – This strategy is all about efficiency and will have a much lower ACoS target than the strategies above. This is where you’ll consider your margins, your AMZ fees and then bid so that you still have some profit left over after paying for the ads. This will not be a rapid growth strategy for most brands, but it can still be very effective. This strategy is all about steady, profitable growth.
Often we have clients running all 4 bidding strategies concurrently in different campaigns for different products.
Mistake #3: Number Numbness – Lack of Measurement and Optimization or thinking there’s not much more you can do.
On numerous occasions we’ve had clients come to us and say “well, I doubt there is anything else you can do here, but take a look.” In these cases the client assumes that because their ACoS is acceptable that there isn’t much else that can be done.
The key is getting enough granular data to be able to make the right changes to your campaigns. Excel or Google Sheets should be your best friend as you look to really uncover what’s going on in your account. We recommend looking at year-over-year and month-over-month comparisons at the campaign level and keyword level. We often then group our keywords into ACoS tiers to more effectively manage them. You should also look at your overall sales volume and how that correlates to you ad performance.
If you aren’t regularly digging and looking at your traffic you can’ maximize your campaigns. You want your campaigns working in concert together to reach your goals. If you’ve got some “number numbness” going on, then you are almost certainly missing opportunities and wasting money.
Want to Get Your Campaigns in Tip-Top Shape for the Holidays?
Fill out the Form Below to Schedule a Free Amazon Audit & Strategy Session.