Offense or defense: The secrets to bidding on brand terms on Amazon Advertising
Testing strategies to capture shoppers’ attention on a crowded shopping channel can have benefits beyond increasing paid conversions - it can boost organic sales as well.
Online advertising is among the latest industries Amazon plans to disrupt. Although it is relatively new to the digital advertising world compared to Google and Facebook, the e-commerce giant is already making its presence felt. Advertising has become one of Amazon’s fastest-growing businesses. In 2018, Amazon advertising revenue experienced triple-digit growth each quarter, reaching approximately $3 billion.
Behind this rapid growth is Amazon Advertising’s unique appeal to retail marketers. For instance, you can manually target keywords and automatically match products with related search queries. Amazon also allows and encourages marketers to target competitor brand terms in their campaigns (unlike Google, for example). That allows retailers on Amazon to effectively steal their competitors’ traffic, or potentially be subject to the same tactic.
The ability to target competitor terms has led to the development of unique strategies, which I describe as “playing offense” and “playing defense.” Both strategies require a willingness to increase spend on the channel, but the payoff can mean dominating Amazon search results or product pages and significantly improving sales.
Play offense to capture competitor traffic
When it comes to searching for ways to cut into a competitor’s market share, bidding on competitor trademarks and brand names are powerful tools. Appearing alongside a competitor’s product provides another option for the shopper and an opportunity to win over an otherwise loyal customer from the competition.
There are no restrictions or quality score implications for using this tactic (another difference between Google and Amazon). And, conversion rates might be lower given the customer has indicated his or her intent with a brand or trademark search term.
Consider these tactics to play offense with Amazon ads. The brands mentioned are purely for explanatory purposes.
- When running manual campaigns, you can build out and target brand keywords to show up on the search results page instead of your competitor.
EXAMPLE: Bosch Tools could bid on terms related to Dewalt (“dewalt drill,” “dewalt circular saw”) to show its product alongside Dewalt products when consumers are making a purchase decision.
- Released in 2019, you can now use product targeting in the manual campaign to pick and choose what products you want to be shown alongside.
EXAMPLE: Beats may want to position its Studio3 wireless headphones alongside Bose’s noise cancelling 700 headphones. Beats can select these ASINs when setting the targeting in its ad campaigns.
- You can use “Substitute” match in an automatic campaign to target similar products and categories. Amazon then places your product on a competitor’s similar product detail page under the “Sponsored Products related to this item” carousel.
EXAMPLE: If KitchenAid creates a campaign with a “Substitute” match, it will appear on the product detail pages of competitors like Cuisinart. If the product has a lower price or faster shipping, the ad can pull sales away from the competitor.
Play defense to protect your product pages
You can use similar methods to protect your brand from competitors who are playing offense on Amazon.
- When running both automatic and manual campaigns, target your own products and categories to ensure more of your products appear on the product page under “Sponsored Products related to this item.” This allows you to box out the
competitionon your product pages and prevent shoppers from second-guessing prior to adding to cart. Even if another of your products appeals to them, you will still keep the customer.
EXAMPLE: If you sell a wide variety of hiking boots, target this product category when creating your campaigns. Not only will your product appear on competitor hiking boot product pages, but also on your own product pages.
- Use search query data to identify where you are seeing the most success on generic, non-brand and non-trademark queries. This is key to protecting your market share. You will want to use similar tactics to target these valuable terms and products.
EXAMPLE: Fall fashion season is in full swing and terms like “sweater dresses” “womens riding boots” or “mens hoodies” might be key terms you want to dominate.
- Conversely, target your brand and trademark queries to ensure your products appear at the top of the search results page. Use search query data to determine which brands are most valuable to your business.
EXAMPLE: If Patagonia is your top-performing brand, bid up on branded terms like “Patagonia fleece” or “Patagonia jacket” to ensure your products appear at the top of the search results page.
Keep the Flywheel Effect in mind
Testing the offensive and defensive strategies can have benefits beyond increasing paid conversions. The tactics can boost organic sales, as well. Greater engagement on your ads leads to higher seller metrics. The better your metrics, the more likely your organic product listings will appear in top positions on the SERP (search engine results page).
This is known as the Flywheel Effect. Dominating either the SERP or product detail pages using offensive or defensive tactics can help trigger this far-reaching benefit.
Align any approach to business goals and budget
Amazon’s vast product offering makes for a crowded and overwhelming SERP. Customers must evaluate who they are actually buying from, shipping rates and timing, reviews of both the product being purchased as well as the seller and, of course, the price.
There are savvy and die-hard online shoppers who can do all that without batting an eye, but the majority of shoppers do not go through that due diligence. Most take what is initially presented to them, which is typically a mix of organic query-related results and paid ads.
Paid ads can make a difference if used strategically. However, it’s important that these strategies are aligned with your business objectives and budget. Protecting your brand in this environment may not be cost-effective due to the combination of commissions and CPC costs that you incur.
Retailers who have the necessary budget should find ways to capture shoppers’ attention on a crowded shopping channel, especially when shoppers know what brands they’re looking for. Appearing alongside a competitor and protecting your own brand terms increases a retailer’s ability to stand out. Especially for your most popular and profitable terms, this tactic may be the deciding factor between making the sale or losing a customer to the competition.