We all know the obvious benefits of using Amazon Sponsored ads – You get more visibility and sell more goods. But is there anything more than this? Yes! Amazon PPC is more than just instant sales.
This week we can walk through some of the other benefits of using Amazon Sponsored Products outside of the sales you get directly from the ads. As Amazon gets increasingly more competitive for sellers, utilizing all features available on the Amazon platform will become more and more important to increase your footprint and keep your business ahead of the competition.
Your ACOS targets for campaigns will set the profitability for your advertisements (see our post on how to set your ACOS targets). Some markets are so competitive, that you need to bid up to a breakeven point or even above which means that while you’re making ad sales, you’re either not making any profit from those sales or could actually be losing money from these ad sales.
Since the main goal of a business is to make money, why would anyone advertise with a goal of just breaking even or going to the point where they are losing money on their ads? The key reason is that there are a number of other benefits that you can get from advertising on Amazon.
Key Benefits of Using Amazon PPC:
- Increased Product Discoverability – Amazon PPC can help get new products discovered since they won’t organically rank right away. Back in the day, sellers could utilize free product giveaways to kick start sales and get reviews. Since that is no longer allowed, using Amazon advertising for your product launch is now even more critical. Your ads can help get reviews quicker and increase organic rankings which we’ll cover in the next couple of bullets.
- Improved Organic Rankings – Using Amazon sponsored products is a great way to increase your sales through ads but it also positively impacts your organic rankings. Amazon ranks products on a number of factors but some of the big ones are sales velocity and sales history. If people purchase your product from an ad after entering in a search term, it tells Amazon that you’re relevant for that search term and should boost your organic ranking for that term. Using Amazon PPC will increase your sales velocity which helps you to rank better organically.
- Higher Conversion Rate– As touched on above, improved sales can also lead to more reviews, which in turn improves listing conversion (higher conversion rates also help you rank higher organically).
- Complements Amazon SEO – As discussed in our Amazon Listing SEO post, with PPC you get a detailed list of keywords that customers use to find your products. This information is very powerful to use for SEO purposes in your listing title, bullets, description, and backend keywords.
When you combine all of these points together, Amazon Advertising can create a virtuous circle of positive impact on your business.
- PPC can kick off a new product launch and drive sales.
- Those sales show Amazon that you’re relevant for multiple search terms while also getting extra reviews that increase your listing conversion rate.
- The increase in conversion rate confirms your relevancy which continues to drive up your organic ranking while also getting your ads shown more.
- Since more people buy per click, your return on ads improves -that is, you can spend more on ads to further reinforce these benefits. This positive feedback loop can continue to drive up sales and profitability. If your ads have an ACoS less than your profit margin for your products, then you are getting all of these benefits while also making a profit from your ads which is great. However, as we see Amazon getting more and more competitive, bids for high performing keywords are continually being pushed up to the point where sellers have to accept breaking even on their advertising. Even if you’re at a breakeven point, these other benefits are too good to ignore for your campaigns. If you don’t take advantage of them, your competitors will.
Note that if you are stuck with a really high ACoS, we suggest you try following our guide on troubleshooting your campaigns before you call it quits.
Now that you understand the huge benefits of Amazon sponsored ads, you’ll want to make sure you are utilizing the latest strategies and techniques for your advertising campaigns to get the most out of it.
Whatever your approach, think of Amazon advertising as a long term investment even if you are running on a high ACoS. Utilizing Amazon PPC will continue to feed into the positive feedback loop where all of these benefits can really work to boost your brand name. You should eventually be able to cut down the costs when you have achieved a good reputation and convert well with all the reviews.
Want a second opinion on whether your campaigns are optimized efficiently? We are here to give you a free review of your PPC campaigns.