Amazon is not only retailer and marketplace, but it also offers vendors and sellers exciting advertising opportunities. The online giant’s share of advertising revenue is growing rapidly, both in the USA and in Europe. It is no wonder, since the main pillars of its portfolio are Search and Programmatic Marketing. Combine the two and you can reach potential customers across their entire customer journey – both on and off Amazon. Advertisers can especially benefit from Amazon’s data trove, because no other company knows its users as well as them – no one can display ads to customers as precisely as Amazon.
By using Amazon Sponsored Ads and the Amazon Demand Side Platform (DSP), a powerful Amazon sales funnel can be designed. How does it work? We will give you answers to these and other questions:
- What is Amazon Advertising?
- How is the Amazon Sales Funnel structured?
- Which advertising strategies are effective at which point?
- How can the success of the strategies be measured?
What is Amazon Advertising?
Amazon’s advertising measures are based on search engine and programmatic marketing. While Sponsored Ads (formerly AMS) function similarly to Google Ads and are shown based on selected keywords, DSP (formerly AAP) is Amazon’s programmatic marketing solution. This means that customer data is analyzed in real time and advertisements are automatically displayed where and when they are most effective.
The Amazon Sales Funnel
The buyer decision process is divided into several phases. Specific advertising measures should be employed at each phase. The different stages from the first customer contact to the conclusion of the purchase are defined by the sales funnel. In order to achieve their goals on Amazon, advertisers should build their sales funnel using the three stages of Awareness, Consideration and Purchase.
Note: Remember that your customers can be located anywhere in the sales funnel. You should begin your marketing activities in the appropriate phase based on the goal you are currently pursuing with your Amazon business.
We will look at the Amazon sales funnel from top to bottom:
1. Awareness – Reaching potential new customers
The upper part of the shopping funnel tries to reach as many potential customers as possible. The aim is to promote brand awareness and gain new customers. The awareness phase is characterized by two marketing measures of Amazon DSP: New Customer Acquisition Strategies and In-Market Targeting. Both are aimed at customers who have not yet encountered the brand. However, through their surfing and buying behavior, they show a fundamental interest in the product segment.
Marketers should focus on the question: How many people have I reached through my campaigns? In this phase, key figures such as Impressions, Click Through Rate (CTR) or Brand Lift are helpful. The DSP New-To-Brand KPIs also provides you with valuable insights.
2. Consideration – Targeting customers in the selection process
The middle part of the sales funnel deals with customers who want to purchase a product and already have a certain idea about it. So far, however, they have not been able to decide on a specific article or brand. They are currently researching, have already visited the competition’s product detail pages and are comparing products in question with each other. The aim in this phase is to lead customers interested in buying to your own detail pages.
Similarities ASIN Targeting via the DSP enables you to address users who have visited product detail pages that are comparable to the advertised products. They may be interested in your own item. In addition, you should use Sponsored Ads campaigns for generic and competitor keywords. Generic keywords are general, product descriptive search terms such as “bicycle helmet”. Competitor keywords contain competition’s brand names and product names.
Note: So far it is not possible to select specific ASINs for Similarities Targeting campaigns independently via the Amazon DSP. The commercial giant selects them automatically.
In this phase, the central question is: Has the number of visits to my product detail page increased? The decisive KPIs in this phase are product detail page views, average ratings and customer reviews.
3. Purchase – Promoting the completion of the purchase
Customers located in the lower part of the funnel are about to make their purchase. They know the brand and need the last incentive to buy a product of the brand.
At this stage, advertisers should launch defensive Sponsored Ads campaigns that include their own brand and product names. This enables potential customers to find your brand faster in the search results and prevents competitors from filling relevant ad spaces with their product. This serves brand protection.
In addition, you should always use ASIN retargeting via the DSP. It aims at customers who have already visited the product detail page of your product. Your item will be displayed on Amazon or other relevant websites time and again. Users stop seeing the ads only if they purchase the item or a substitute product.
The crucial issue at this stage of the sales funnel is: How many users who have seen my ad have bought my product? In this phase, attention should be paid to KPIs such as ROAS (Return on Advertising Spend), ACoS (Advertising Cost of Sales), Price or Add to Shopping Cart.
Proper usage of Amazon Advertising requires that you distribute your marketing budget in a target-oriented way. The business goal determines in which phase of the sales funnel it makes sense to invest. Investing in the lower funnel is more promising with regard to the ROAS, since the probability of a purchase is much higher here. However, if you discover that your advertising measures do not (or no longer) achieve satisfactory results in the purchase phase, it makes sense to invest the budget further up in the funnel. For instance, it is possible that the brand is still unknown – only a few users search for it and open the product pages. To increase traffic, fill the funnel from above. However, at this stage, you should focus on other indicators than Sales, ACoS and ROAS, as they no longer deliver attractive results here. Suitable KPIs in this phase are for example Impressions or Traffic.
factor-a has many years of expert know-how. We manage Europe’s largest Amazon Advertising budget. We are happy to develop tailor-made advertising strategies for your Amazon business. Contact us!