amazon agency bi-weekly: when’s the right time to advertise on amazon?

sam hager, president dash / AMAZON

​https://www.dashapplications.com/about-us.html#team

Your clients will want to know why and when they should allocate marketing budget to Amazon. This week we examine the decision factors you and the brands you manage should consider before spending advertising dollars on Amazon.

Timing is everything — make sure it’s right for your Amazon Advertising clients.

When you are working with a client that is new to the Amazon platform, advertising is without a doubt one of the most effective ways to jumpstart sales and gain traction for your client. However, there are some things to consider before you start spending marketing dollars on behalf of your client.

Are the product listings optimized?

Without keyword-rich copy optimizations and metadata fields completed in the backend of ASIN listings, you are going to have a hard time getting ads served for your clients in the first place. The reason for this is that Amazon’s ad server scrapes content from the product listing to understand the nature of the product and then serves it for keywords that are relevant to the product and its category. This is especially true for Amazon’s auto campaigns in which Amazon targets keywords on your behalf (hence the ‘auto’ characterization). This also applies to manual keyword targeting in which you direct the ad serving by telling Amazon which keywords to target for the advertised product. In manual targeting, even though you are explicitly pointing the ad server in the right direction, if it can’t find the targeted terms in your product listing, there is a much lower likelihood that you’ll get served for the keyword at all. It follows that if the listings you are trying to advertise don’t have robust keyword content, the ad server will have nothing to ‘see’ in order to understand how and where to place your ad. Quite simply, you won’t be able to spend ad budget even if you get it from client in the first place.

​The above goes without saying that optimized content also gives the listing a much better chance to convert. For customers that don’t know the brand you’re working with, optimized content can be the difference between them making an initial purchase (and many more after that), and bouncing from the listing. Your ad performance will be directly tied to the quality of the content on the product listing pages.

Does the product have any reviews yet?

An example of strong reviews that make for successful ad performance.

One of the biggest showstoppers for products and brands on Amazon is poor review quality. If a product listing either a) has few or no product reviews or b) poor reviews relative to competitors (3.5 stars and below), then advertising performance is going to suffer and you’ll be wasting advertising dollars. You can spend ad budget all day long, but if a customer can’t verify that the product is legitimate via reviews from other customers then your ads just won’t convert. At a bare minimum a new product should have at least 5–10 reviews, preferably of the 5-star variety prior to spending advertising dollars. And if your product has reviews but they are not high quality (3.5 stars and above), you’ll find that even discount pricing isn’t enough to get a shopper to purchase. Remember that Amazon is a comparison shopping engine by nature so understanding the review counts, review quality, and price points of competitor products can help you set ad performance expectations for yourself and for your client.

How much budget does your client have for Amazon?

Let’s say your client has 10 listings that they want to advertise on Amazon. They give you $500 a month for advertising to spread across the 10 listings. Should you take the money and go for it? The answer is no. Looking at the math, this means that you will have about $17 to spend each day, and $1.70 to spend on each product per day. Even at a reasonable $1.00 CPC (Cost per Click), that means you might get two clicks a day per product and maybe 30–60 clicks per product for the entire month. Bluntly, not only will this amount of ad budget have very little effect on overall platform sales, but it also will prevent you from learning anything from the advertising data because you won’t have enough to work with on a product by product basis.

Sample daily budgeting from Dash Amazon via Dash Applications.

My recommendation is to wait until your client is willing to commit $500-$1000 of monthly ad budget per product. If they only have $500 available, use it to advertise the one product that has the highest upside potential, most traction, and best listing quality and reviews.

In summary, here are three major factors to consider before spending advertising dollars on Amazon:

1. Product listings should be optimized with keyword-rich content and metadata that allows the ad server to ‘see’ your products effectively and enables customers to convert once you drive them to the listings through your ads.
2. Product listings should have at least 5–10 reviews that are 3.5 stars or above. If this is not the case, wait to advertise until the bare minimum of reviews has been generated. Without reviews, you might as well throw your marketing dollars into a blackhole. Amazon’s Early Reviewer Program or Vine Program, along with friends and family of the brand, are good sources of these initial reviews.
3. Ensure that your client has enough budget to effectively advertise the brand’s products by understanding the unit economics of your budget in relation to the number of products you want to advertise. Without enough budget runway, you won’t be able to prove out the effectiveness of your advertising, nor will you have enough data to work with to make informed ad decisions.

The black hole where your advertising dollars go when you don’t mind the guidelines above.

sam hager | president dash / AMAZON

an amazon advertising expert, sam is on the forefront of ecommerce evolution and leads thought for agencies and brands looking to crack the digital commerce code. 

sam.hager@dashapplications.com