What options and advantages do retailers have when they partner with the online platform?
By Katja Laska (exclusive for EuroShop.mag)
Amazon is the world’s largest e-commerce platform and offers a wide variety of advertising formats similar to solutions offered by Google or Facebook. But why is advertising on the online giant’s platform a great idea and how do the different advertising options differ?
Sellics is the global leader in building software tailored to Amazon and offers an All-in-One software solution that help brands and agencies succeed on the platform. Bosch, Mammut, Medion, and WMF are among the over 4,000 customers in 30 countries that trust in the company’s expertise. In this interview, CEO Franz Jordan delivers great insights into the world of Amazon advertising.
Mr. Jordan, why should retailers put their trust in Amazon Marketplace?
Franz Jordan: Creating and maintaining an online presence in marketplaces – especially Amazon – is absolutely essential for businesses and brands. Brands that ignore Amazon as a platform leave the market to their competition or third-party sellers because the products are sold by third-party sellers via Amazon, anyway. Yet if brands are active on Amazon, they can ensure their trademarked brand is given accurate representation on the Marketplace and prevent and fight counterfeiting in the process – Amazon has created tools for brands to protect themselves.
What types of ads can be placed on Amazon?
The advertising solutions cover everything from search engine advertising (SEA) to banner ads and retargeting campaigns. This means ads can be placed on both Amazon and on other websites. The benefit here is that it allows retailers to find the right format for their brands based on their set goal and objective, budget, and the target audience they intend to reach.
What makes advertising on Amazon so unique and what are some added benefits for brands and retailers?
Amazon Marketplace features millions of products. This can make it difficult for customers to find your business, especially considering that most shoppers never click past the third page in their Amazon search. This is where advertisements come in, and especially the so-called “Sponsored Products” ads, with which brands and retailers can advertise their products on the first page of search results to earn more attention from shoppers and – in the best-case scenario – sell more products.
What’s more, advertising on Amazon for retail brands generally achieves better returns than Google or Facebook advertising since visitors to Amazon Marketplace are often intent-driven and look to buy a specific type of product. Most times, shoppers deliberately go to Amazon when they look for an item. The online juggernaut has one crucial advantage in this setting as its algorithm knows what consumers are buying. In contrast, Google primarily specifies what customers are most interested in and Facebook predominantly identifies their preferences.
Ads on Amazon can promote long-term company growth and increase profits – a pivotal advantage for many brands. Second, the ads can be utilized to maximize targeted, short to medium-term campaign results and increase sales as part of a product launch, on Prime Day or during the holiday season, for example. The third advantage of Amazon advertising is that it can drive brand awareness campaigns, i.e. it serves to increase brand visibility and to build your brand.
Which Amazon online advertising solutions are best suited to meet your goal and budget?
The most popular Amazon ad solution is “Sponsored Ads” and most notably “Sponsored Products” that appear at the top of the Amazon search results page and product pages. As mentioned earlier, these ads are very effective and ideal to increase sales and generate profits as they attract high-intent customers. The brand can display them systematically for certain search queries, categories or products. Billing is based on the so-called Pay-per-click (PPC) advertising model and initiated once a potential buyer clicks and views the product. PPC ads are based on bids made by advertisers and their competitors as they put in their target bid price and choose how much to bid per click.
The typical cost-per-click bid on Amazon currently ranges from a few cents up to 2 euros, making costs much lower than ads on Google and other options. Sellers can start advertising campaigns with a minimum campaign budget and then scale up the ads as needed while maintaining control over cost and budget. To be successful, retailers should keep a close eye on their campaigns and key data and optimize accordingly. Given these advantages, we recommend creating a “Sponsored Products” campaign as a starting point for brands that are just beginning their advertising journey on Amazon.
Amazon “Sponsored Brands” are banner ads that appear across the top of Amazon’s search results. These ads are likewise suited to grow sales and profits but are also a great tool to generate brand recognition as they can be customized to include a brand’s logo and message. When shoppers click on the ads, they are linked to a store or custom landing page.
All businesses that sell on Amazon have access to Amazon Sponsored Ads (Sponsored Products, Sponsored Brands and the new Sponsored Display format). Sellers who sell on Amazon Marketplace have automatic access via their Amazon seller account and the Amazon Seller Central web interface. Vendors that sell their products to Amazon have access via an Amazon Advertising Console account, formerly known as Amazon Marketing Services or AMS.
Self-service and managed-service options are available with Amazon DSP (demand-side platform). Advertisers can create an account on the platform, regardless of whether or not they sell on Amazon. Amazon DSP enables advertisers to programmatically buy banner and video ads to display on Amazon and other websites. The solution is a great way to increase brand awareness with targeting options based on demographics or interests of shoppers. The platform also facilitates campaigns to help grow sales – for example, by creating a retargeting audience. Shoppers who have viewed or visited an Amazon product page will be shown an advertisement for the product on another external website at a later point. Having said that, it should be pointed out that the design for banner ads and video campaigns requires a somewhat bigger budget. This option also typically involves an increased minimum budget.