Shashank Aggarwal, Head, E-Commerce Advertising at Lyxel Labs Private Limited, shares fundamentals of Amazon Advertising and how brands can get it right.
E-Commerce revenue is expected to increase from the US $39 billion in 2017 to the US $120 billion in 2020, growing at an annual rate of 51% which is the highest in the world. And considering the internet transformation done in India, India’s aggregate internet user base will cross 830 million by the end of 2021 which was 560 million in September 2018. In reference to the growing e-commerce industry, the read sheds light on the importance of Amazon Advertising.
Amazon is India’s No. 1 e-commerce portal with more than 193 million unique visits per month and a registered base of 200+ million users. It gets 100+ million android app installs with 65% repeat customers. 69% of the buyers are men and 31% are women. Talking about the age group, 42% of the sales are from 15 – 24 years of age. 60% of customers are from Tier 2&3+ and 80% of New customers are from Tier 2&3+.
As per Forrester Research Web-Influenced Retail Sales Forecast report, $70 billion offlines sales in India will be influenced by the web in 2019 and 1 in 4 customers researched products on Amazon before making an offline purchase.
There is a 60% direct traffic on Amazon.in and 76% of Amazon shoppers use the search bar to find an item. People are searching Amazon with an intent to research/buy specific products/brands, whereas search engine queries are more “I want to know” & “ I want to do” moments.
Advertising on Amazon
To advertise on Amazon you need an advertising panel. There are 3 formats available
- Sponsored Products
- Sponsored Brands
- Product Display Ads
Sponsored Products allows you to promote products to shoppers actively searching with related keywords or viewing similar products on Amazon.
Targeting method under Sponsored Products
Automatic Targeting: Under Automatic Targeting, Amazon targets keywords and products which are similar to the product you are advertising.
Manual Targeting: Under Manual Targeting, Amazon allows advertisers to manually enter keywords & products they want to target in the ad.
You can run an automatic campaign when you are running a campaign for the first time to analyze search terms of the users to understand what exactly are shoppers typing to land on your product and which search terms are converting into sales.
Campaign Bidding (Available for both Automatic & Manual Campaign)
Below are the 3 different placements bidding available while creating a campaign.
- Down only – This allows Amazon to lower the bid in real-time when the chances of converting click to a sale are less.
- Up & Down – This bidding strategy allows Amazon to increase the bid for a keyword when the chance of a sale is high and decrease the bid of a keyword when the chance of a sale is low.
- Fixed Bids – Here Amazon bids for the exact bid you have set for the keyword.
Placement Bidding (Available for both Automatic & Manual Campaign)
In addition to the bidding strategy used above, the advertiser can increase bids by up to 900%.
- Top of search – Increase/Decrease/Fixed bids for the top of the search placement
- Product pages – Increase/Decrease/Fixed bids for rest of the search page
Setting Bids by Targeting Group (Available for Automatic Campaign Only)
Close match – Here Amazon will show the ad to users whose search term is closely related to the advertised products.
Loose match – Here Amazon will show the ad to users whose search term is loosely related to the advertised products.
Substitutes – Here Amazon will show the ad to users who view products that are similar to the advertised products.
Complements – Here Amazon will show the ad to users who view products that are a complement to the advertised products.
You can choose between:
- Keyword targeting: Here you choose keywords which allows your product to appear in shopper search on Amazon.
- Product targeting: Here you can choose specific products, categories, and brands to target your ads.
Keywords are of 3 types
- Broad match
- Phrase match
- Exact match
Apart from this, you can add negative keywords to prevent your ads from being shown on irrelevant searches.
This type of ad placement allows you to showcase a collection of products to shoppers actively searching with related keywords on Amazon. You can run sponsored brands only with manual targeting.
You can showcase your products via
- Amazon brand store which is like a microsite on Amazon. It allows you to showcase different category of products which you are selling on Amazon. It helps in brand awareness & sales.
- The second option allows you to make a product list page with 3 or more products.
Product Display Ads
Product Display ads as the name suggests are the ads shown on the product pages. It’s a good source to target your competitors’ products directly and show your ad.
Under Product Display Ads two types of targeting options are available i.e.
- Interest-based targeting
- Product-based targeting
Interest-based targeting allows you to target a broad set of audience based on the audience you select.
Product-based targeting allows you to target specific ASINs on which you want to show your ad. These ASINs can be complementary to your product or related to your product.
The article is authored by Shashank Aggarwal, Lead, E-Commerce Advertising from Lyxel Labs.