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Amazon Retargeting Ads | Why it’s Important and How It’s Done

Amazon experts explore the importance of Amazon retargeting ads, and how this is done to successfully retarget customers through PPC.
By
Rael Cline
Last updated:
February 17, 2023

Retargeting ads are quickly becoming the norm in online marketing, particularly for the most successful businesses. This makes a lot of sense since retargeted customers are 70% more likely to convert than non-retargeted customers, which shows the impact this can have on your ROI.¹ And with the number of Amazon businesses rapidly growing, these businesses must implement retargeting strategies to stay competitive.

Amazon offers multiple ways for businesses to access retargeting ads, including through Sponsored Display Ads, Amazon Advertising Platform (AAP), Demand-side Platform (DSP), and Sponsored Products. However, simply having access to these tools doesn’t mean much if you don’t have the right insight to take full advantage of this access.

That's why in this blog, we’ll dive into the world of Amazon retargeting and show you how to use analytics and insights tools to maximize your retargeting efforts and stay ahead of the curve.

Why is retargeting important for Sellers?

By reminding potential customers of a purchase they wanted to make, retargeting helps increase the likelihood of conversions. Sellers can acquire customers that might have got away — in fact, retargeting cart abandoners can increase conversion rates by up to 26%.² They’re already interested in what you’re selling; giving them that extra nudge can be just enough to bring them back or simply increase brand awareness.

Amazon’s retargeting isn’t just limited to Amazon’s website either, as it allows Sellers to reach customers both on and off Amazon. This helps Sellers expand their customer base and reach a wider audience. And since the average click-through rate is ten times higher for retargeted ads than display ads, capitalizing on this versatility will bring you a much better Return on Ad Spend (RoAS) than only using display ads.³

Getting retargeting right also helps improve key Amazon Seller-relevant metrics such as Advertising Cost of Sales (ACoS), Customer Lifetime Value (CLV), and RoAS. It does this by

  • Reducing your cost of sales through increased conversion rates.
  • Retargeting customers who are more likely to be retained or actually convert offers more value to your business when compared to customers who will buy something once but never buy from you again.
  • Giving you a better return on your ad spend by boosting sales up to 50% when combining retargeting ads with your pre-existing advertising.⁴

Overall, retargeting is an important tool for Sellers looking to boost their ad campaigns, improve their return on investment and acquire more customers. 

Amazon retargeting ad platforms

You have a few options when it comes to choosing which retargeting platform you want to go with. Amazon’s expansion of the options that Sellers can use to retarget customers shows the increasing importance of what retargeting can do for Sellers and Brands.

Sponsored Display

Amazon’s Sponsored Display is available to Vendors, Agencies, and professional Sellers who are enrolled as a brand. This tool allows for the retargeting of both on- and off-Amazon audiences — anyone who has seen your products, or similar ones, in a chosen category within a 30-day period. 

The data from tracking users’ shopping behavior is then used to display highly relevant ads to those users as they browse Amazon's site. These ads are designed to remind the user of products they showed interest in, leading to a higher conversion rate and improved return on investment for advertisers.

Off-Amazon retargeting is particularly helpful because it keeps products and brands at the forefront of a customer's mind even when they are not actively looking at them.

Amazon Advertising Platform (AAP)

Amazon Advertising Platform allows businesses to promote their products and services to Amazon customers through various ad formats such as Sponsored Products, Sponsored Brands, Sponsored Display, and Sponsored Brands Video.

AAP operates by monitoring the shopping patterns of customers who have engaged with a brand's products or website. It allows for wider audience segmentation, with device and browser targeting, as well as more detailed predictive analytics. Advertisers have the option to aim their campaigns at custom audiences based on their shopping behavior, resulting in highly customized and effective advertising.

You can use AAP to design your own ads and, depending on your budget, decide to go with the impressions-based payment model instead of the click-based one. This option might not be for everyone, however, as it can get expensive. So if you don’t have room in the budget for experimenting with new campaign ideas, other retargeting platforms might be better suited to you.

Demand-side Platform (DSP)

A demand-side platform (DSP) enables advertisers to purchase digital advertising inventory through programmatic buying. It also covers websites, social media platforms, mobile apps and online video channels. It’s suited to businesses who want to buy ads in bulk — whether they’re on Amazon or not. 

The best parts of DSP are:

  • Automatic ad buying power that reaches all the sites you can think of and more.
  • The use of Amazon's purchasing data to power your targeting campaigns.

Advertisers can target specific audiences based on their shopping behavior for personalized campaigns, and the platform provides real-time bidding and optimization tools for efficient advertising.

Sponsored Products

On Amazon's Sponsored Products, Sellers can target specific audiences based on their shopping behavior, creating personalized campaigns that reach the right people at the right time. The Sponsored Products platform provides a cost-effective advertising solution for brands looking to drive sales and increase visibility on Amazon.

Trialing retargeting with Sponsored Products is brand new — in fact, it’s still in Beta. Retargeting has typically been limited to Display, AAP, and DSP before now and this shows how seriously Amazon is taking retargeting. Sponsored Products accounted for 77% of Amazon ad revenue in 2021;⁵ bringing retargeting to Products shows how important it is to Amazon, and how important it is that you stay up to date on these processes to make the most of your Amazon Brand.

Boost your retargeting ads with insights

In 2023, having access to retargeting ads is a key factor for the success of sellers — but access isn’t enough. To effectively utilize retargeting campaigns, Sellers need to have the right insights and understanding of their audience and campaign performance. This is where tools like Nozzle, an Amazon analytics tool, can help.

Nozzle provides Sellers with the insights they need to optimize their retargeting campaigns and drive better results.

Purchase intervals

Helping businesses know when to retarget is half the job — for example, abandoned cart emails are most effective when sent within an hour of the customer leaving the site.⁶ Purchase interval analysis helps businesses know exactly when, and who, they should be retargeting.

So rather than setting up a Display or AAP campaign that retargets people at a time when they’re less likely to convert, you can get them when they’re most likely. This boosts your ACoS, alongside your customer acquisition and retention, By retargeting people at the right time, money isn’t wasted on ineffective ad campaigns.

Purchase journeys

Identifying which products are frequently purchased together helps retarget customers with the right products. If you can see which product purchases your customers are making, and then what they go on to buy — their purchase journey — then you know in future which products to offer new customers when they buy the same things.

Building this data up and utilizing it effectively for your business can make the difference between being a player on the Amazon marketplace, and dominating your business category.

Customer retention

The Nozzle Customer Analytics dashboard provides you insight into which customers are most profitable for your business. This means you can easily use it to find out which customers are the best to retarget and retain. By understanding repurchasing cadences — who are more likely to buy what, and when — you can optimize your retargeting ads to those customers who could provide the best CLV for your business.

Insights into your customers also help your remarketing. By understanding this information for existing customers, as well as understanding purchase intervals and journeys, you can send emails to the right customers with a friendly reminder of the products they’re missing out on — making it easy for them to make that purchase.

Pro tip: Retargeting focuses on ads that lead the customer back to the product and convince them to complete their purchase. Remarketing, on the other hand, typically refers to email marketing strategies, with customers being targeted by follow-up emails.

Use our customer retention calculator to quickly see how successful your retention efforts are, and how much of an impact customer loyalty has on your brand.

Creating Amazon retargeting campaigns with Nozzle

Retargeting has become an increasingly popular marketing strategy, and businesses that want to remain competitive should take advantage of it. However, without the proper insights, businesses risk underutilizing the growing access to retargeting ads, leading to lower sales due to dwindling purchases and customers. 

To maximize the benefits of retargeting, businesses need to have a clear understanding of their audience and campaign performance, and this is where utilizing analytics tools can be of great help.

Nozzle is an Amazon analytics and insight tool that brings together everything you need to succeed with retargeting campaigns. Access to retargeting tools is one thing, but insight lets you maximize that access, effectively retargeting your customers, reducing your ACoS, and boosting your sales.

See how Nozzle can help you, and request a demo today.

¹  Retargeting Gets Results Examples of the Proven Tactic in Action 

²  Marketing Statistics: Consumers Are 70% Likely to Convert With Retargeting 

³  Ad Retargeting in Numbers – Statistics and Trends 

⁴  What is Ad Retargeting? | Mailchimp 

⁵  Amazon Ad Revenue Statistics That will Blow Your Mind 

⁶  When Is the Best Time to Send an Abandoned Cart Email? - Rejoiner 

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