Using Amazon Sponsored Ads: Pros and Cons
Updated: Jul 1, 2019
Google's search tool is king when it comes to B2B purchases, however over the past few years Amazon's meteoric rise in the B2C market has seen them steadily overtake their rivals.
A survey conducted in 2016 of two thousand consumers found that 55% of people started their online shopping searches straight on Amazon, skipping Google altogether.
How can you, the advertiser, take advantage?
When planning your online advertising strategy, you aim to engage your target audience in the location where their concentration is highest, and for a B2C company, there is no better place than on Amazon.
In 2016, it was estimated that Amazon's earnings from ads was around $1 billion. Incredibly, this figure jumped to over $10 billion in 2018, seeing them surpass Microsoft in U.S. advertising revenues, moving them into third place behind fellow tech giants Google and Facebook.
Amazon are definitely on the fast track for exponential growth in the coming years and with Google and Facebook only controlling an estimated 20% of the online advertising market, there is plenty of opportunity for potential advertisers to get in early and enjoy better ad positions at a far more attractive price than with the more established competitors like Google AdWords.
Amazon Ads – a great place to start your e-commerce advertising
There are numerous advertising programs to choose from on Amazon, the most beneficial place to start with is Amazon Sponsored Products. Similar to the display ads in Google Adwords, the Sponsored Products ads are in fact image ads which appear in Amazon's search results right next to and above the products searched. For instance, when searching for 'hair removal device' on Amazon the search results looks as follows:
The subtle difference between the sponsored adds and the non-sponsored ads is the light gray 'Sponsored' tag which appears above the product title. The exact same search in Google produces the following:
The process for Amazon Sponsored Products is almost identical to when advertising on Google AdWords: the advertiser selects the desired keywords and their ad will populate the first set of results when they have been searched for by a potential buyer. Similar to AdWords, the advertiser only pays for the clicks received on their ads.
Once the potential buyer has clicked on the Sponsored Product Ad, they are sent directly to the advertiser's product detail page.
Potentially more favorable results on Amazon than on Google AdWords
On the whole, when a person searches on Amazon, they are usually further down the purchasing process than when searching on Google. Typically, when someone searches for a product on Google, they are at the beginning of their purchasing process and are more likely to be on a fact-finding mission. However, when a shopper begins their search on Amazon, they are generally more prepared to make a genuine purchasing decision.
Finetune your advertising campaign with Amazon Ads Data Reports
The advertiser will be provided with vital data about searches for specific keywords. This invaluable data includes which search terms are outperforming others, thus enabling the advertiser to enhance keywords and refine the performance of their advertising campaigns.
A greater yield on your ad campaign investment
It is well known that Facebook and Google dominate the online advertising market, however that dominance comes at a correspondingly higher cost-per-click. According to content26.com, “the average CPCs on Amazon Marketing Services was about 38% lower than Google AdWords".
The reason for this simple, Google AdWords has been around for almost twenty years, and as the popularity of the platform has increased so has the competition for prime advertising space, resulting in inflated cost-per-click rates.
Amazon is a mere fledgling in comparison, and the number of advertisers competing for prime ad location is considerably lower than on Google. Furthermore, the type of advertising on Amazon is primarily focused on the product itself, where as on Google the advertiser receives greater competition from related services.
All of this leads to a lower and more effective cost-per-click for product advertisers on the Amazon platform. Getting in early to the world of Amazon sponsored adds, at a lower cost-per-click rate, will give advertisers the opportunity to promote new products at the top of Amazon's search results and reap the benefits.
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