How to Grow Market Presence with Amazon PPC
Advertising is all about getting your name out there. So, you might be forgiven for thinking that growing your market presence with Amazon PPC is as simple as winning placements. But life is rarely that straightforward.
The 19th Century retailer John Wanamaker is claimed to have said: "Half the money I spend on advertising is wasted; the trouble is I don't know which half." Effective advertising requires setting goals, tracking metrics and making tactical choices that align with your strategic requirements.
This article is one in a series on how to use Amazon PPC to drive specific strategic goals. We’ve already addressed How to Use PPC to Generate Organic Results and How to Use Amazon PPC to Increase Profit. As this implies, growing market presence is only one of several goals that you can use Amazon PPC to achieve, and focusing on growth is likely to come at the cost of advancing other outcomes.
Here, we are going to explore the specific ways you can deploy Amazon PPC to increase your market share and grow as a business. Let’s get started!
Additional reading: Effective advertising requires understanding your customers. For detailed information on Amazon’s main reporting tool, check out our free ebook — Mastering Amazon Brand Analytics.
Step 1: Marshall all of your ad options
Strategies to help:
Different PPC ad types offer different ways of targeting audiences and customer searches, and each ad type comes with strengths and weaknesses. Sponsored Product ads and Sponsored Brand ads use keywords or ASINs to target audiences. Sponsored Display ads primarily use audience demographics data to target potential and repeat customers based on their shopping behavior. There is also a new product targeting option that enables you to target product categories — not specific ASINs — with ads that appear on product detail pages.
Sponsored Product ads typically have a more bottom-of-funnel role, whereas Sponsored Brands are great for awareness and Sponsored Display ads have retargeting functions. With that said, none of these are hard-and-fast rules. For example, we’ve seen Sponsored Brands perform better than Sponsored Products while being cheaper — which shouldn't really be the case if Sponsored Products are more bottom-of-funnel. What’s important is that by using the full spectrum of advertising options, you will maximize your visible real estate on Amazon, which will help grow your brand.
Pro tip: It’s worth noting that Amazon also offers the DSP (Demand Side Platform), which is a programmatic advertising option. This should likely also be included within your broader advertising strategy, however, is not strictly PPC. If you want to learn more, check out our blog — How the DSP will Change in 2021.
Step 2: Target wisely and bid aggressively
If your goal is to grow market presence with PPC, you need to be aggressive and you need to be targeted. It's about bidding on high-volume, high-value terms — including branded (both your brand and your competitors) and non-branded terms. For well-known brands, you are going to want to spend more on your own branded terms as a defensive strategy to stop competitor conquesting. However, expansion generally requires targeting competitors and non-branded terms — the latter of which can also help you increase organic rankings on Amazon.
Fundamentally, growing market presence means going after competitive terms, and winning those placements won’t be cheap. Careful targeting can keep costs down — check out our blog on Search Term Optimization for more details on efficient bidding strategies. However, you should expect to see a higher ACoS (at least short-term) in order to win placements and maximize your visibility in order to maximize growth.
Want to master your Amazon PPC strategy?
Download our FREE eBook here to master four key Amazon merchant strategies and make informed decisions that deliver better business outcomes.
Strategies to help:
The Impression Share metric for Sponsored Brand ads is a useful tool for your bidding strategy. It can tell you whether or not a higher bid will gain more impressions. For example, if you have a lower impression share and have a low ACoS, you will have a lot to gain by bidding higher to get those untapped impressions. You can then use this information as a benchmark when thinking about Sponsored Products — although the two ad types are not a like-for-like comparison.
With that said, bidding high on irrelevant terms won’t help you. You also need to think about what you are targeting.
- Target competitor terms: Target your competitors on a branded level using both Sponsored Product and Sponsored Brand ads. Sponsored Brand ads are great for generic targeting of branded competitor search terms, whereas Sponsored Products can target more product-specific branded search terms against which you stack up favorably.
- Target ASINs: Both Sponsored Products and Brands allow you to target ASINs as well as search terms. These ads then appear on the corresponding product pages. By targeting specific ASINs against which you have a competitive advantage, you can steal market share right from your competitors’ product pages.
- Target non-branded keywords: Competitor targeting is important, but so is targeting high-value non-branded terms. This is very similar to the kind of targeting that can help you drive organic traffic using PPC. However, when focused on growth, you can bid far higher on these terms while still advancing your primary strategic goal. That makes it easier to bid on high-volume terms, as well as more competitive niche terms that are hyper-relevant to your product. Again, this can also help you improve your organic rankings for targeting products.
- Retargeting: Sponsored Brand ad provides unique retargeting features more akin to programmatic advertising, which should be used within your broader strategy — helping you target users based on their search history, or having viewed or purchased your products.
Within a multi-pronged targeting process it’s important to effectively structure your campaign. Your target ACoS and bid strategies will be easier to manage if you are clear about what you are trying to achieve. You should separate campaigns intended for growing market presence from other campaigns.
Pro tip: Bid optimization tools can help you harness AI and algorithmically update bids in order to maximize different goals — e.g. conversions, impressions or an ACoS target.
Step 3: Nurture and calculate CLV (Customer Lifetime Value)
Amazon calculates your ACoS based on the assumption of selling a single product. A standard view of break-even ACoS looks to ensure that your ad spend does not exceed your pre-advertising profit margin — ensuring single-sale profitability.
Customer lifetime value (total profit per customer over the entire duration of that relationship) allows you to understand the real value of your customers. Knowing this lets you accurately determine how much you can afford to spend to increase market presence — benchmarking your ACoS targets with a longer-term vision of profitability.
Although you might be willing to accept losses to grow market presence, a CLV-adjusted ACoS gives you far more flexibility to competitive bid on PPC while still being assured of your ability to turn a profit long-term. A CLV-informed approach to growth will also help ensure that your growth is sustained long-term.
Strategies to help
Don't treat all your customers (and prospects) the same. Understand differences in CLV and invest your time and resources accordingly. Fundamentally, however, your ability to make tactical and strategic decisions based on CLV comes down to your ability to calculate CLV — and for that, you may need help.
CLV is a highly complex metric that is central to what we do at Nozzle. In addition to providing AI-enhanced PPC services, we’ve developed an analytics tool that can pull product-specific information from Amazon MWS and use that to help you understand product-specific CLV estimates and average “buying-trajectories” of customers. By accessing third-party analytics software, you can dramatically improve your understanding of customers, and tailor your advertising strategy accordingly.
Suggested reading: If you want to learn more about our approach to CLV, and how it’s calculated, check out our blog — Can CLV Calculations Ever be Accurate?
Use data to create target insights and growth
Shoppers have an appetite to discover new brands or products, which presents an exciting opportunity for brands to create long-term customers. Amazon has seen a 22% increase in new-to-brand customers for ad campaigns run since 1st March compared to the previous six months.
Growing market presence is all about getting your name out there and winning bids and gaining conversions — even at the cost of short-term profitability. It's tempting to look for immediate returns that ad types such as Sponsored Products bring. Effective brand building requires attention to the long term.
By understanding your customers and your advertising options, you will be able to grow your brand and grow your presence. But Sellers on Amazon can quickly become overwhelmed by the volumes of data involved, the number of sources and reports on Amazon, and the need to balance quantitative and qualitative insights. Third-party analytics solutions can help you maximize the value of your customer data. Analytics tools stitch together data horizontally, across silos, to provide an overall view of the customer. Advanced data analysis, typically using AI and machine learning, will find insights quickly across many customer journeys and help rationalize market presence campaigns. Check out our ebook — How to Make Sense of Your Amazon Customer Data — if you want to learn more.