Michael Nguyen – Senior Marketing Specialist

Staying competitive on Amazon as a manufacturer is no easy task. With an ever-changing landscape and numerous brands to compete with, it takes considerable effort to stand out and get your products in front of prospective customers. Amazon’s advertising platform “Amazon Ads” is an invaluable tool to push your products to the top of Amazon searches and increase your chances of making a sale – but what does it take to be successful? Here are several important things to evaluate when developing a campaign for your products.

Determining the Right Budget for Your Campaign

Depending on the size of your industry and how unique the product is, your product category could be more or less difficult to break into. Selling a product that is common and produced by many different manufacturers is going to be extremely competitive and requires a larger budget to establish a presence at the top of the search rankings as opposed to more niche products. Amazon Ads can help you set flexible budgets that you can adjust and cap at a limit based on monthly or daily spending. Similarly, you can cap paid keywords at certain bid limits to reduce excessive spending.

The most optimal level of spending can be determined by reviewing the performance of your ads over time. As you set keyword limit bids and monitor your daily and monthly spending, you will eventually discover an appropriate budget level that balances cost efficiency and conversions.

Higher budgets don’t always equate to higher conversions. An effective strategy for smaller budgets could be starting small and slowly increasing your daily spending while monitoring keyword performance. This will help you find an optimal return on advertising spend (ROAS).

Finding the Right Keywords

The most obvious choice is not always the most effective. The more common the keyword, the more competitive the space will be – which will ultimately consume your budget. Start with brand-relevant keywords before expanding into your product category. From there, proceed slowly using the following method.

With Amazon Ads, you can create automatic campaigns that will do the work for you. They automatically test relevant keywords and regular reports that you can integrate into your manual campaigns. You can use these automatic campaigns to help identify areas of opportunity for your main campaigns. Additionally, Amazon provides customer search term data that you can use to update, optimize, and refine your manual campaigns.

Measuring Campaign Success

A flood of orders coming through the door may initially seem like a success, but not all conversions are equal. The Amazon Ads dashboard provides up-to-date data for all ongoing campaigns. A key metric to look for is Advertising Cost of Spend (ACoS). This is the formula that Amazon uses to showcase the amount of spending by attributed sales.

Keeping ACoS as low as possible is essential. If your ACoS is too high, you could be at risk of breaking even after the cost of Ads. Keep in mind that aside from marketing costs, you’ll need to factor in the associated costs of product storage, logistics, and getting the product to the customer. Refine your campaigns by monitoring and removing ineffective keywords so that you can focus your budget on driving performance.

The exception to the rule is that a high ACoS isn’t necessarily bad if you’re trying to market high-growth products to a broad audience. Establishing a presence in a new market takes a considerable effort, and it is beneficial to focus these types of campaigns on increasing impressions. Implementing a budget focused on visibility in multiple categories, in addition to sponsored placement on your competitor’s product detail pages, could lead to successful conversions down the road.

Maintaining Ads After Launch

Once your campaigns are live, you’ll still need to continually review your stats on Amazon Ads to keep things running at optimal performance levels. Stay aware of changes in the marketplace and try to remain up to date on any Amazon Ads changes down the line. Adjust your campaigns accordingly and implement new keyword bids when necessary – while simultaneously making sure to monitor daily and monthly budgets. It is important to stay up to date on the quarter’s high and low shopping seasons as well to ensure your campaigns run as cost-efficiently as possible. In the long run, maintaining your Ads and staying vigilant when it comes to managing them is going to be extremely beneficial and will increase your profits significantly.  

Let Virtual Supply Help You Get Started!

Virtual Supply has years of experience assisting our partners with utilizing Amazon Ads. We’ve been steadily helping manufacturers navigate the Amazon and eCommerce space since 2014.  Our team of trusted experts works hand in hand with our partners to develop strategies that are tailored to their needs – and we would love to help you too! Reach out today to learn more about how our team can be a valuable asset to you and get your product to market in the most effective and profitable way possible.