An audit is the best way to get a full picture of how well and why your Amazon campaigns are performing the way they are, but there’s no hiding the fact that performing a complete audit is incredibly labor intensive.
In order to give you a jump start, our marketplace team has pulled together a checklist of things we make sure to review first when onboarding a new Amazon Ads client. If your campaign isn’t converting, you may want to make sure that your ads aren’t falling into any of these common pitfalls.
Campaign Structure
Successful advertising on Amazon, or on any paid channel for that matter, is similar to building a house – it all starts by constructing a solid foundation. Which is why the account ad structure is the first thing we evaluate when auditing an Amazon Ads account.
There are three tell-tale signs that you may want to re-evaluate your campaign’s structure:
You’re only using automatic campaigns
Automatic campaigns are essential tools that allow a retailer to advertise their products on Amazon with minimal effort. They are a great resource for mining converting search queries and can help marketers stay aware of how shoppers’ search queries change over time.
A major challenge with only using automatic campaigns, however, is that you are unable to choose bids at a keyword level. Amazon lets you set a Ad Group bid, but it is Amazon that controls both the keywords you show up for and their bids, often resulting in wasteful ad spend.
You have an unmanageable number of campaigns
In an ideal world, we’d want to achieve the highest relevance between what a shopper searches for and the product we show them. Still, too much granularity can lead to its own challenges, such as having ad spend spread too thin across campaigns.
In this pay-to-play business, we are only as good as our data, and we need that data to make decisions. It is very difficult to tell what strategies are not working or which products are performing best when you spend $1,000 over 100 campaigns.
Your product groupings are extremely broad
Conversely, grouping your products too broadly leads to a less relevant customer experience. For example, bootcut jeans and skinny jeans are both jeans, but by separating the two styles out into their own ad groups, you can better target long-tailed keywords like “skinny jeans for women”.
Keyword Strategy
If a campaign structure is the foundation of your house, your keywords are the interior decorating.
Keywords help advertisers fine tune the search results that a product will appear for. Having a good keyword strategy leads to high-quality clicks and traffic. Which is critical because, as most pay-per-click marketers know, not every click is valued the same.
Below are some common keyword strategy challenges to look out for:
Your match type strategy is off
Amazon, as we have seen, is a very different beast from Google; this includes advertising. Because of this, it is not safe to assume that your Google Ads Keyword Strategy will carry over to your Amazon Ads Keyword Strategy.
Suggesting broad match keywords may make a Google Ads Marketer’s heart stop, but they can actually have a big impact on your Amazon campaigns. The difference being that, in Amazon’s broad match keywords, Amazon requires all the keyword terms to be contained in the search term. Google’s does not. You can think of Amazon’s broad match as more in line with Google’s modified broad match type.
You’re ignoring negative keywords
Negative keywords are a hallmark of a well-managed account, and prevent your product from showing when you know the shopper is not interested.
If you include the broad match “Jeans” as a keyword, you have the potential to show for women’s jeans, men’s jeans, kid’s jeans and many more. If I am selling men’s jeans, I know that someone searching for kid’s jeans is not looking for my product.
Negative keywords help you exclude irrelevant traffic and reduce wasteful ad spend.
Positioning of Amazon Seller
Selling on Amazon poses the very unique challenge of competitor intimacy. In Amazon’s shopping environment, your competitors are a single click away. For this reason, we don’t just audit an Amazon Ad Account — but the Amazon Seller as well.
We look at three items when evaluating whether a potential partnership is a good fit for WTM Digital:
Your product’s unique selling proposition (USP) is undefined
Shoppers view your product side-by-side with your competition, and if your product doesn’t offer up a compelling reason why a shopper should buy from you instead your competitor, they won’t. It’s imperative to show your buyers what sets you apart.
Buyers have come to expect free two day shipping on Amazon, and if your product doesn’t qualify, you’re already at a disadvantage. We have seen clients’ sales increase as high as 70% after their products gain the prime badge.
Having a solid review count and positive rating boost a shopper’s trust in your product because they know others have purchased it before and had an enjoyable experience. This isn’t to say that your products need thousands of reviews, but the sales velocity can change dramatically when moving from 0 to 1 reviews, 1 to 5 reviews, and 5 to 10 reviews.
You’re entering a saturated market
Going hand-in-hand with analyzing a potential partner’s USP is researching the competitive landscape as well.
A good rule of thumb is that if the top five products have 300 reviews or more, it’s going to be a challenge to gain sales traction. That’s not to say a seller can’t do well in that category, but it won’t be an easy feat, especially if you’re competing against Amazon itself.
With Amazon’s large scale, they have access to better pricing and have the ability to undercut other sellers. A price war with Amazon is a difficult war to win.
Conversely, if one or two of the top five products have less than 300 reviews, there is an opportunity for you to take over one of the top five spots.
Your sales ratio isn’t balanced
Ideally, we want to see a healthy mix of organic sales and paid sales. This will add stability to an account. Should a competitor enter the marketplace while you are paying for all of your sales through ads, it is easy for the new player to outbid you. However, if you are sustaining a good portion of your sales through organic rankings, you’ll have a far better chance of maintaining marketplace dominance.
A helpful reference metric is your Total Advertising Cost of Sale (TACoS). TACoS is calculated by dividing a seller’s ad spend by their total sales (Paid + Organic). A “good” TACoS percentage will vary based upon each seller and their industry.
If the percentage is too high, this could be a good opportunity for us to enhance your Amazon SEO.
Online Selling Presence
The fourth area to audit an Amazon Seller is to look at their selling presence online. A multichannel seller needs to have a holistic sales and marketing strategy. The best campaigns include two key components: consistent pricing policy and a layered digital marketing strategy.
Your pricing is all over the place
We often see sellers who, in order to remain competitive on Amazon, lower their Amazon prices but keep the prices on their own ecommerce site — where they have a larger profit margin — the same.
This confusing customer experience can end up cannibalizing your website sales by enticing more shoppers to buy via Amazon in order to get the lower price. You also risk garnering mistrust between consumers and your brand while stifling any chance of developing a long-term customer relationship.
Recently I bought a pair of 720 High Rise Super Skinny Levi Jeans off of Amazon. I checked Levi’s website before purchasing and saw the same pair of pants priced $4 higher. Naturally, I bought off Amazon.
Now Levi has no way to remarket to me or any control over our customer relationship.
You’re not taking shoppers where they want to go
The goal of a layered digital marketing approach is to funnel as many sales through your brand’s ecommerce site as possible. From here you will retain the most margin, have access to your customer information, and can control the customer relationship.
However your strategy also needs to be flexible enough to know that, if a shopper indicates that she wants to buy off of Amazon within her search query (i.e. ballet slippers amazon), it is best to guide them to your brand’s Amazon product page.
By forcing a buyer to an undesired platform, sellers risk losing the sale entirely.
When marketers prioritize these four areas in their initial Amazon Ads audit, they get the heavy lifting out of the way and can drill down to the nitty gritty at a later point. If you need help kick starting your review, get in touch with our team; we’ll be happy to help!