One of the primary reasons customers love Amazon is the breadth and depth of products available for purchase at any given time. There’s a good chance you’ll find what you’re looking for, at a price which is at or near the best value available on the web.
Alas, any successful entity will garner its fair share of detractors, and Amazon is certainly no different. Brand defenders, or web-design enthusiasts will point to a lack of appeal of the storefront experience itself. A plethora of products and options to capture your attention leads to a generally cluttered, inconsistent experience.
How do brands stand out in such a crowded field? How do they convey their uniqueness and individual flavors in a sea of me-toos?
Enter, Amazon Sponsored Products
One of the better options we’ve found is utilizing Amazon Sponsored Products campaigns. As is the case with most impactful marketing opportunities, it does come at a cost. The million-dollar question is, “Is the added cost of the program worthwhile for achieving higher revenue targets?”
For me the argument is fairly simple and it comes down to your cost of goods sold. Do you have wiggle room in your margins to embark on a paid marketing campaign within the fee-constructs of the Amazon Marketplace? Can you drive higher total profits through additional volume at the expense of product margin? For many brands, the answer is yes, provided campaigns are run with an efficiency target in mind.
That being said, we’ve seen a common position that drastically limits campaign efficiency. It’s an argument that has hovered over the paid search space from the very beginning. Have you heard this one?
“Why should I spend additional money on driving sales in an environment where I’m already winning business from organic search? I type in my brand, and my products are shown. Unless I’m missing something here, it feels like I would just be spending money on sales which I would already be winning.”
Bidding on Brand Terms in Amazon Sponsored Products
However, in our experience, brands that have chosen to avoid bidding on branded terms have seen little success from a performance or efficiency standpoint with their Sponsored Products campaigns.
So, without further ado, I present to you our empirical case for why brands should bid on their own brand terms on the Amazon Marketplace through Sponsored Products campaigns.
1. Share of Voice (SOV): Bidding on branded queries helps you dominate search results pages.
In the same way that having multiple links in an email can increase click-through, giving the searcher more opportunities to click works to your advantage. Page SOV is coveted!
In some product categories like apparel, we’ve seen over 90% of campaign-attributed sales stemming from ASINs other than the advertised ASIN. To Amazon, these are represented by the ‘Other ASINs’ report. Customers are not in a directed funnel; they are navigating away from the sponsored product and purchasing something else (your brand or others).
2. Brand Defense: Competitors may be stealing your sales.
Your competitors may be bidding on your branded terms and directing shoppers away from your products. This is an easy one to test by simply typing in some of your most-trafficked search terms and reviewing the various brands shown in the Sponsored Products slots.
These may not be efficient placements for your competitors, but they may be determining that the cost of acquisition (and potential lifetime value of that customer) outweighs the bid cost.
3. Performance AND Efficiency:Target brand keywords to deliver low CPAs.
The holy grail of successful search campaigns is finding cheap keywords that also have search volume. Those ideal keywords are your brand related searches. Branded terms (compared to non-branded terms) usually have a lower cost of sale, and signal stronger consumer purchase intent, delivering higher conversion.
A recent internal campaign analysis on a well-known apparel brand revealed that branded keywords delivered an exceptional 1.6% cost of sale, while non-branded terms were higher-cost at 25%. Although you don’t see a 1.6% cost of sale on branded keywords every day, single-digits are often achievable. On a blended basis, the branded terms are key to volume and efficiency, and without them campaigns are often ineffective. The cost is usually a small price to pay to gain or retain share.
4. Customer Loyalty: Capture high-quality leads that are near the point of conversion
People who are searching for your branded terms are already acquainted with your company. If this were taking place on Google, these shoppers may be considered as ‘further down the purchase funnel’.
On Amazon, by default, customers are at least a click closer than on Google to purchasing. Regardless, with 55% of searches now starting on Amazon, a lot of Shopping is happening on Amazon, not just Buying.
5. Seller/Fulfillment Credibility: Will users take you more seriously if you combine natural with paid?
By appearing in both the organic and paid ads areas, you are proving to your searcher that you are the prominent player in your space, and choosing you as a Seller is a confident choice. Appearing simultaneously in natural and paid search locations increases your credibility in the eyes of your customers and, as a result, your overall brand and sales stand to gain.
6. Amazon Flywheel: Sales attributed through Sponsored Products positively impacts Amazon’s search algorithm and your organic business.
The algorithm looks at the successful pairing between an ad placement and a sale as a win for the customer, and feeds that result directly back into the algorithm (supporting the proverbial ‘flywheel’). We’ve looked at this phenomenon up close for our clients and have found statistically relevant correlation.
It can feel as if it’s Amazon’s world, and we’re just living in it. If you’ve decided to list on the Amazon Marketplace you’ve decided to not go gently into the night, to strike out into vast territory and find your customers where they are. Do not go gentle into that marketplace, go bold!