Amazon’s PPC advertising platform, Sponsored Products, was responsible for $1.5 billion in sales in 2015. Along with its growing popularity comes a lot of questions from Amazon sellers who are not versed in the intricacies of PPC campaigns.
We recently sat down with Teikametrics Ecommerce Consultant, Mike Indigaro, to dispel some of the myths surrounding Sponsored Products as well as the best strategies that Amazon sellers should employ.
Here is a portion of our interview with Mike. To hear more, make sure to tune in to our webinar, How to Market Your Brand at Amazon.com.
Q: Can you give us a quick overview of your role at Teikametrics and the types of things you help clients with?
Mike Indigaro: Sure. I’m an ecommerce consultant for Teikametrics and I help small, medium, and large sized brands on Amazon build brand identity through various strategic techniques. This includes product page optimization, Sponsored Ads management, and many other facets that help propel their business on Amazon.
Q: What exactly is Sponsored Products and how is it beneficial to Amazon sellers?
Mike Indigaro: Sponsored Products is a PPC advertising program within Amazon Seller Central that gives sellers the opportunity to market their products so that they can reach more users. There are various ways that you can manage Sponsored Products in order to help build your brand’s identity to reach the vast majority of customers that are on Amazon’s platform.
Q: What is the difference between automatic and manual campaigns for Sponsored Products?
Mike Indigaro: The main difference between automatic and manual is automatic is more broad. When you set it up, you do not use keywords. All you use is the content that’s within your listing and you set up your campaign so that most of the spend and traction that your products get will be fueled by the product content. If you have a listing that is lacking keywords or keyword rich content, your products will not do as well as if you had a fully-optimized listing. Whereas with manual keywords, you can target the keywords exactly so that when a customer searches, you can have your products appear in the search for those specific keywords.
Q: If I choose to run both an automatic and a manual campaign simultaneously, will I be competing against myself?
Mike Indigaro: No, you will not be competing against yourself. The campaign will pull the product that has the higher bid and the higher conversion. If it’s the same exact product, obviously you’re not going to be comparing conversion, but you’ll be comparing bid amounts, so whichever campaign has the higher bid amount will take precedence. You’ll never see two products next to each other being sponsored that are the exact same product.
Q: What is a good target ACoS that sellers should be aiming for?
Mike Indigaro: ACoS is a tricky discussion. Not every client should necessarily strive for the same ACoS, which is your advertising cost of sales. At Teikametrics, we look at it two ways. The first is that we’re helping clients use Sponsored Products as a customer acquisition vehicle, and in that case we would not worry so much about a low ACoS, but we would worry about driving as much traffic to their pages as possible. On the flip side, for those that have a business that’s been up and running for a few months to a few years, we would strive for a low ACoS that’s below the adjusted gross margins of their products. So after FBA fees so that we can make sure that you’re not affecting your bottom line with additional marketing span for these campaigns.
Q: What kind of an impact do Sponsored Products have on organic search rankings?
Mike Indigaro: Sponsored Products have a huge impact on organic rankings because sales rank is exactly what it sounds like. It’s the product’s sales history at any given hour, so if you have a campaign set up for a specific product, that’s going to have a trickle effect on the sales rank. If you’re promoting your product, it will naturally get more conversions, more clicks, and higher conversions lead to higher sales and a higher sales volume will lead to a higher selling rank.
Q: What is the main takeaway regarding Sponsored Products that you would like sellers to walk away with?
Mike Indigaro: I think the big take away is to take it seriously. Amazon’s providing sellers an additional marketing tool that, at a minimal cost to the seller, you can really promote your products. Whether it’s a brand new product that has no reviews that you want to get page one exposure and really increase the sales ranking, or it’s just building up your brand’s identity on Amazon. It’s a great vehicle to do both of those things.
If you would like to hear more insights from Mike please tune in to our webinar How to Market Your Brand at Amazon.com on Wednesday, March 16th.