With over 300 million active user accounts on Amazon and 150 million prime members globally, the opportunities for brands and sellers on the platform are continuing to increase dramatically. But with all that growth, competition is also growing and that means your Amazon advertising strategy needs to continue to evolve to keep pace. In addition, costs to run Sponsored Ad campaigns also continue to increase every year with Cost-per-click (CPC) for Sponsored Products ads showing an increase of 14.3% year-over-year, according to data from Q4 2021. This means that to find efficiency and incrementality, brands need to learn to work smarter through their Amazon strategy, since their competitors on Amazon are spending more on advertising and running more advanced strategies to get ahead.
So, if you are only using Sponsored Ads to grow on Amazon, you are missing a large part of the Amazon advertising ecosystem. Sponsored Ads, though an integral part of an advertising strategy, is only one piece of the Amazon ecosystem. This is where Amazon Display advertising comes in to help. Although Display is more complex, the added complexity also means much larger reach can be obtained so that you can grow in ways not available with search. Search advertising certainly helps with driving increased engagement and conversion on Amazon, but that is it. When you leverage Amazon Display advertising, your opportunities are vast with the ability to re-engage shoppers who already researched your brand, reach more potential customers who are likely to buy your products, and the option to tailor creative to optimize for what works best.
But the endless opportunities to scale your brand and give your competitors a run for their money do not stop there. This post will educate you on the power of leveraging Amazon Demand-side platform (DSP) with the Amazon Marketing Cloud (AMC) to help you understand your consumers shopping journey and penetrate new markets to meet your DSP goals.
Opportunities with DSP and AMC
Amazon DSP has much wider potential which allows you to programmatically buy ad placements to reach new and existing audiences both on and off Amazon. DSP retargeting is close to the purchase phase in the sales funnel, with better conversion rates compared to contextual, in-market, lifestyle, and lookalike audiences. It also provides brands and agencies with complete creative freedom of the ads they run with the most advanced reporting and audience insights available on Amazon. Unlike Sponsored Display ads, Amazon DSP advertisers can fully customize headlines, branding, images, and copy.
A statistic that we love to emphasize is customers who are exposed to both DSP and Paid Search ads are a whopping 5 times more likely to purchase than customers who are only exposed to Paid Search ads. Running Sponsored Ads is a great first step, but as competition increases, advertising diversification will enable Amazon vendors and sellers to withstand the constant evolution of competitor and consumer behavior.
Amazon DSP audiences provide advertisers with a customized way to tap into incrementality, and now with new tools to launch and manage your DSP strategy, utilizing these audiences is easier than ever. The following Amazon DSP audience types give advertisers the means to target their customers at all points throughout the customer journey, and incrementality can be reached with greater efficiency and ease with new DSP tools enabled through the Amazon’s API.
- Demographic (upper funnel) – Amazon audience type that targets users that fall into specific demographics such as age, gender, occupation, etc.
- In-market (upper funnel) – Amazon audience type that targets users based on what they are currently shopping for within a specific lookback window.
- Lifestyle (upper funnel) – Amazon audience type that targets users based on shopping patterns that show specific interests, attributes, etc.
- Contextual (mid funnel) – Amazon targeting type that enables you to show up on similar PDPs (Product Detail Pages) while relevant users are browsing for similar products.
- Retargeting (low funnel) – Customizable view-based audiences that enable you to retarget viewers or purchasers of specific products.
Upper Funnel advertising often starts the customer journey contributing to conversions but is excluded from last-touch attribution therefore making it difficult to show the true value of Upper Funnel tactics with conventional measurements.
Here is where the Amazon Marketing Cloud comes in to save the day. AMC enables omnichannel measurement, full-funnel media impact, and a new way to discover audience behavior. AMC helps drive a customer from the discovery phase who did not know this product category existed to the loyalty phase where they love this product and want to buy more.
Some pain points with Display measurement are that it is often quite easy to measure bottom of funnel sales and Return on Advertising Spend (ROAS), but it becomes much more challenging to measure the top and middle of the funnel. DSP can enable significant growth in the long term, but your ROAS will not be as strong as your other Amazon advertising channels, and it is difficult if you try doing it on your own. And if you are not spending enough, or your ad spend is stretched too thinly over too many products, your ads can get lost.
Questions AMC Can Answer:
- How do I effectively measure driving a customer from discovery to loyalty?
- Can I accomplish this with one ad type?
- If not, how do I know which ad does what?
How AMC Solves Top of the Funnel Measurement
AMC allows you to create the funnel and measure the top of it the right way based on how it impacts the bottom. AMC can be tricky to use without serious SQL knowledge, but Pacvue users no longer need to query a SQL database to perform ad-hoc analysis of their funnel in action.
Pacvue’s Assisted Conversion Analysis allows users to get a first look beyond last touch attribution to gain insights into the importance of reaching the consumer at multiple stages of their shopping journey.
Pulling AMC insights and putting them to action can best be simplified in the following process:
- Pull the data
- Visualize the data
- Take action off that data
- Automate the actions
Pet Food Brand Improves Ad Conversion Rate
In a recent case study conducted by Pacvue with one of its clients, a global pet food brand, AMC data showed that the conversion rate of customers who viewed both Sponsored Products and Amazon DSP ads was 16 times higher than Sponsored Products alone! Although the audience reached by both Sponsored Products and DSP ads only accounted for 9.4% of the total reach, the overlap audience contributed 68% of total conversions.
There were two solutions used to boost conversions:
- Created an Amazon DSP audience based on views of products related to the keywords in Sponsored Products campaigns.
- Targeted competitor audiences with Amazon DSP based on the products promoted in competitor Sponsored Products campaigns.
Key Takeaways
The opportunity on Amazon is growing fast, but so is the competition and that means your advertising strategies need to continue to evolve to stay on top. Though Amazon DSP can unlock incrementality for your brand, it can be hard to measure when using awareness tactics. By leveraging the Amazon Marketing Cloud, you will have the capability to map the true value of your efforts across the full funnel. By testing and learning with new ad types and marketing strategies, your efforts to sustainable advertising growth on Amazon should be rewarded with increased brand awareness and higher conversions overall.
To learn more about the Amazon Marketing Cloud and how to harness the power of data-driven discovery for your brand, tune in to our upcoming Fireside Chat on April 19 at 1pm EDT.
