by Muni Sodhi, One Click Retail
eCommerce is a critical pillar of any successful retail strategy. As most traditional manufacturers now acknowledge, the push/pull relationship between eCommerce giants and traditional brick-and-mortar retailers has become a major point of focus in today’s omnichannel marketplace.
We can’t talk about eCommerce without talking about Amazon. Today, Amazon is more than just a retailer: it’s the most popular search engine for online shoppers (even more popular than Google!) and its influence extends beyond the digital shelf. Most shoppers who buy primarily from brick-and-mortar stores still check Amazon’s huge collection of consumer ratings and reviews before making a purchase. In light of this, brand manufacturers need to understand that, more than just a retailer, Amazon is a marketing platform.
In this article, we’re going to share some of the “tribal knowledge” that exists within Amazon’s ecosystem, uncovering crucial tips and tricks which can have a lasting impact on manufacturer success. In doing so, we’ll reverse engineer the Amazon Flywheel, teaching brands how – and when – to leverage Amazon’s internal marketing tools to generate sustained long-term growth.
Product Merchandising & Advertising: Three Approaches
- Retail Merchandising (Banners, Billboards, SiteStripes)
Retail merchandising includes clickable advertisements that appear on Amazon’s category landing pages, such as banner ads, billboards and sitestripes. Because 90% of purchases on Amazon begin with search, not browse (less than 10% of purchases started via browse result in a sale), this is the least effective form of brand marketing on Amazon.
These ads range from $50K to $500K depending on the duration and seasonality of the campaign. Considering the cost, brands need to ask themselves how much upper funnel traffic is being captured by the ad placement. A well-designed ad with clean and direct images and branding will be more effective, but considering the relatively low traffic to category landing pages, most manufacturers will find the ROI on these placements to be lacking.
Retail merchandising drives extremely low viewership in comparison to the more effective browse and search based products that Amazon Advertising offers. Ultimately, this approach does not align with how the vast majority of shoppers choose to navigate Amazon and reach a brand’s product detail pages (PDPs), and will therefore be the least effective option for most manufacturers.
- Programmatic Search Advertising
Recommended for High Traffic, Low Conversion ASINs
Amazon Advertising provides brands with programmatic search advertising (previously known as AMS), including sponsored search results and banner ads that appear for specific key terms. For products which experience high traffic but low or stagnant conversion, paid search will generate the best ROI.
The obstacle here is not to generate awareness, since high traffic implies that a product is already very visible, but to target the right kinds of consumers. A highly trafficked PDP is the goal, but if conversion is low it means most of those people aren’t interested in the product. Amazon Advertising can help brands to refine their audience and attract consumers that are more likely to purchase the item. Using programmatic paid search is a great technique for drawing customers already in-market and in-segment for the product type to the brand store or PDP.
This is the most popular offering within Amazon Advertising and for good reason. For most brands, paid search will yield the largest ROI of any marketing approach. However, it’s absolutely critical that PDP content, title, and descriptions are fully optimized before leveraging paid search – driving traffic to a page that is incomplete, unoptimized, or out-of-stock is a waste of money.
- Programmatic Display Advertising
Recommended for Low Traffic, High Conversion ASINs
Amazon Advertising provides brands with customizable browse advertising services (previously known as AMG), including direct display, video ads and custom solutions that appear across Amazon-owned domains including Kindle, IMDb, and others. In a scenario with low traffic but above average conversion, browse advertising is likely to generate the biggest ROI.
The main obstacle here is “product discovery” at the beginning of the purchase journey. The products most likely to experience low traffic and high conversion are those which are more specialized, with less mass-market appeal. Consequently, consumers shopping for these products have a tendency to be more brand-loyal and spend less time on comparative research before committing to final purchase. As an example, Medical Devices is a product category with low traffic but very high conversion. It is safe to assume that customers who are in-market for medical devices have very specific, specialized needs.
The goal is to generate more brand awareness at the top of the funnel. Since these products already have high conversion, browse ads increase the amount of potential page views while maintaining the same or better conversion rates. Browse ads help increase upper funnel traffic and broaden a product’s reach and audience.
Getting on the Fast Track
Advertising on Amazon is a very effective way to elevate a product to the next level – but it’s not a magic wand. Running ads for products that are out of stock or have incomplete detail pages is not only a waste of money, it creates a negative shopping experience for consumers which can erode brand sentiment. In short, marketing should be the last step for a brand, reserved until after all other elements are optimized.
The products that yield the largest ROI from Amazon Advertising are those already on Amazon’s Fast Track, the metric by which items are designated as Eligible for Prime. Fast Track is influenced by a variety of factors but there are two central pillars which manufacturers should invest in prior to running ads: the supply chain and the perfect page.
There’s not much point in running ads for items which can’t be delivered. The whole point of Amazon Advertising is to drive more traffic and generate more sales, but you’d be surprised how many brands learn too late that they’re not equipped to handle the resulting sales spike. Well-executed marketing can generate a permanent increase in average weekly sales, but it can also backfire by causing a product to go out of stock. Even short OOS periods can damage search rank in the long term, defeating the purpose of the ad campaign.
Amazon Advertising is a tool for generating traffic, and the higher an item’s conversion rate is, the more valuable that traffic is going to be. Developing a perfect page with clear, concise and engaging content is a brand’s best tool for driving conversion, so before spending tens of thousands (or more) on ad campaigns, first consider optimizing content to create a perfect page.
Equally important to a product’s detail page is customer-generated content. Ratings and reviews have a significant influence over conversion. Ad campaigns can help increase customer engagement and generate more reviews, but the most successful campaigns tend to be those for products that already have a high number of positive reviews
Don’t forget: Amazon is a marketing platform. Not only does improving review scores and counts greatly increase conversion on Amazon, a Deloitte report also confirmed that that an average of 49% of in-store sales are influenced by online shopping experiences. Just like hungry patrons often look at yelp reviews, shoppers are looking up Amazon reviews while browsing in a brick-and-mortar store!
Once the supply chain and perfect page are optimized, manufacturers have a lot more to gain from investments in merchandising and Amazon Advertising. By first focusing on the fundamentals and removing all potential traffic blockers, brand manufacturers can maximize the ROI of their ad campaigns. What makes an effective marketing approach is going to vary based on the product category and an item’s traffic and conversion rates, but with the diversity of options available, any manufacturer can benefit from using Amazon Advertising to take a strong product to the next level.
About One Click Retail
One Click Retail is the industry’s most accurate source of sales data for the world’s top eCommerce marketplaces. Using a combination of website indexing, machine learning and proprietary software, OCR estimates weekly online sales figures with market leading accuracy in order to deliver the best insights, analytics and strategies to their brand manufacturer clients. To catch a glimpse of how OCR gives brands critical edge on online platforms with our unique data and expertise, subscribe to our weekly eCommerce insights blog, and follow us on Twitter and LinkedIn.
If you are a brand manufacturer who would like to learn more about how you stack up to the competition—or would like to see your market share and category growth insights—email us at email@example.com for a free capabilities demo.
About Clavis Insight
Clavis Insight is a global leader in online channel insights for product manufacturers, and a principal innovator at the forefront of the eCommerce analytics revolution. The company has developed a powerful framework – 6Ps eCommerce Intelligence™ – for organising and prioritising eCommerce analytics and actions to drive online channel success for brands. Global manufacturers use their daily eCommerce analytics and insights to drive sales in their categories online, to optimise content for brand equity enhancement, protection and product information compliance, and to deliver consistent, unified reporting on online retailer brand presence and performance.
For more information on Clavis Insight 6Ps eCommerce Intelligence™ visit www.clavisinsight.com. www.clavisinsight.com