The Ultimate Guide to Amazon Advertising: How to Optimize Your Ads for Maximum ROI

Amazon Ad Optimization: Ultimate ROI Guide - Consultus Digital

It comes as no surprise that Amazon offers a lot of potential for e-commerce brands looking to increase sales and brand awareness. With 300 million active user accounts and over 9 million sellers using the platform, Amazon advertisers have a huge potential audience but also a ton of competition. The key to standing out against that competition is to create effective Amazon ads alongside your broader digital marketing strategy

The process starts with creating desirable products and optimized product pages. Then you can take advantage of Amazon Advertising to increase brand awareness and drive conversions on the platform. Amazon sellers should consider how they can use Amazon ads to boost product sales. However, even if you don’t sell products on Amazon, Amazon ads might be a useful addition to your marketing strategy.

Understanding Amazon’s Ad Ecosystem

Amazon has a lot more advertising options than you might realize. To optimize your ad campaigns, you will first need to understand what your options are so you can select the type of ad that will best fit your brand, product, and goals. 

  • Sponsored Products: Cost-per-click (CPC) ads that appear on Amazon search engine results pages (SERP) and on related product detail pages.
  • Sponsored Brands: Banner-like ads that appear at the top of Amazon SERPs and display the brand logo, headline, and up to three products
  • Sponsored Displays: CPC ads that can appear in several locations on Amazon like product pages, SERPs, customer review pages, or even in follow-up emails.
  • Video Ads: Video Ads can be featured on any website or media owned by Amazon like IMDB, Fire TV, Twitch, etc. Amazon video ads don’t necessarily need to drive traffic to Amazon product pages but can link to your brand’s website or any other website.
  • Audio Ads: You can create audio ads to appear on audio platforms like Alexa-enabled devices, Twitch, or Amazon Music.
  • Amazon DSP: Amazon’s demand-side platform allows you to programmatically buy display and video ads on and off of Amazon to reach a wider audience. 
  • Amazon Native Ads: You can add Amazon product ads to your brand’s website that link back to your products on Amazon.
  • Amazon Store: Brands can create a free multi-page Amazon Store that allows them to showcase their products or portfolio.

Improve Your Targeting on Amazon Ads

A lot of Amazon ads are CPC (cost-per-click), so you pay based on the number of clicks your ad receives. To get the most out of your ad spending, your campaigns need to reach the right audience. That is where targeting and retargeting come in. Step one is choosing the add type that best meets your campaign goals. The next steps ensure your ad appears on the right screens.

Conduct Thorough Keyword Searches 

Keyword research is essential to the success of Amazon ad campaigns. This is where you outline where and when your sponsored products, brands, or displays will appear. Use Amazon’s tools–like the Keyword Tool and Sponsored Products Automatic Targeting – as well as third-party tools – like Google Keyword Planner and SEMrush – to identify relevant keywords and search terms. 

You may also want to identify negative keywords or keywords where you don’t want your ad to appear, to further narrow down where your sponsored content will be displayed. These might be keywords with a low conversion rate or that don’t properly fit your product. 

Category-Specific Targeting

In addition to keywords, you can use Amazon’s advanced targeting to help your product appear alongside similar items, on competitor’s product pages, or related pages. For display ads, you also have the option of targeting based on the interests and behaviours of shoppers. For example, you can retarget people who have clicked on your page in the past or who have purchased related products. 

Amazon Ad Success Comes Down to Bidding

Many Amazon Ads operate based on bids. The highest bidder wins the ad space. The average CPC rate in the US is around $0.89 per click (in Canada that rate is a little bit lower), so if a competitor bids $0.89, but you bid $3.00, you would win the auction and get the ad space for $0.90 per click. 

Managing your bids and your ad budget can get tricky. You can manually select bids or use Bid+ to automate the bidding process based on your criteria. In any case, to better inform how you bid for your ads, you will need to know how your ads are performing. This will take time of course, but Amazon offers some useful tools to help you understand your ad costs, clicks, sales, and win rate.

Amazon Advertising Best Practices 

Set Clear Goals

Before publishing any ad campaign, you must first outline your goals. If your goal is to increase brand awareness, you might want to invest in sponsored brand ads or video ads. If your goal is to increase conversions, you may want to focus on sponsored product ads. Setting goals for your ads will inform the direction of your campaign and guide your markers of success. 

Draft Compelling Copy

Why invest in an ad if it can’t hold a customer’s attention? For any ad type, you must create engaging headlines, a clear call to action, and use high-quality images or videos. For product pages, similar rules apply. Create detailed product descriptions and use high-resolution, informative images and videos.

The Importance of A/B Testing

By testing different ad copy, images, targeting options, and bidding strategies, you can identify the most effective combinations to improve future campaigns. You should be using A/B testing regularly, but be sure to:

  • Only test one factor at a time
  • Run tests for a sufficient amount of time
  • Evaluate test results to ensure they were not simply due to chance

Maximize Conversion Rates

Optimizing conversion rates is key to maximizing ROI. Here are a few key strategies to help increase conversion rates for your campaigns:

  • Use high-quality, engaging images and videos
  • Encourage customer reviews
  • Ensure your products are competitively priced 
  • Make sure product descriptions are detailed, accurate, informative, and specific

Track Campaign Performance

Measuring and analyzing performance analytics will help you identify the success of your campaign, highlight weak points, and inform future campaigns. There are many performance indicators to track, like campaign reach, customer satisfaction, conversion rate, etc. 

Get Help From an Amazon Ad Management Agency

To truly optimize your Amazon ads you need to invest your time as well as your money to create engaging campaigns and analyze performance metrics to understand its success. The digital marketing experts at Consultus Digital are here to help. We understand the impact that e-commerce has had on the way we shop and engage with brands. We can help your brand leverage the value of Amazon advertising and implement Amazon ads alongside a broader digital marketing strategy to help your brand grow. Contact us today to start the conversation. 

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