So today we’re going to talk about Amazon advertising. We want to talk about your different offers, the options here, because if you already sell on Amazon, you’re probably aware of most of this, but maybe you’re not fully aware of some of the options and kind of want to talk about our general strategy. This is just such a fundamental part of selling on Amazon, especially today, because believe it or not, I don’t know how many years ago it was, but I was, you know, we were teaching people how to sell on Amazon.
We saw the introduction of Amazon advertising. Like it, wasn’t a thing when we first started out, when I first started selling on Amazon, when you know, we first started teaching people how to sell on Amazon. It literally didn’t exist. And then all of a sudden you can advertise on Amazon and that kind of changed the whole game especially over time. And today, today, we want to talk about kind of the fundamentals of your different options. And also the general strategy that we recommend. So Mike’s going to be primarily leading, leading this. And so let’s talk about the different types that are available and, you know, kind of what the differences are between them. Yeah.
Mike McClary (03:23):
Let’s start off with the bread and butter. It’s called sponsored product ads. And that was the one you’re talking about. I believe it was 2014 when they first announced it you know, we’d been selling it. You had taught me back in 2013 and insulin for a little over a year. And then they come up with this new thing, you know, called sponsored product ads may have had a different name back then. Not sure where it was. It basically like you could tell Amazon if people search for this search term, whether it’s, you know, like organic coffee whatever it is, I want my product to show up there and that’s, they started off that was really dirt cheap back then too. You’re paying, you know, 10, 15 cents per click. I wish it were that way today. It’s not really that way right now.
Mike McClary (03:58):
But that’s when they started off and then probably, you know, thinking back then, we all knew that this was going to be something very, very big for Amazon as they wanted to grow themselves and help their sellers. This new channel of advertising was going to be huge and it has become huge, but sponsored product ads. Now we’re still the bread and butter. If you’re selling on Amazon, you absolutely should use it. And basically it’s kind of what I just mentioned before sponsored products.
Ads allows you to have your product show up when people are searching for certain search terms on Amazon, whatever you believe that your customers will search for it. And you want your product to show up, you simply place a bid. It’s an open auction, our market, like kind of a marketplace auction. They call it out there where that tech, you know, typically the highest bidder gets the click.
Mike McClary (04:40):
There are some, a few other factors in there. Like if your product converts really well, then you’ll pay a little less than someone else. You know, that’s probably the main thing out there, but also the quality of your listening, things like that. But in general, you bid what you’re willing to pay for every click. And then people search. If they click on your ad, they go to your product and hopefully they buy your product. Those are sponsored product ads. You have a couple different options in there. One is manual targeting. That’s the one that came up originally. Matt and I are talking about it 2014 or so, where you put in the search terms, they then came out with something that’s called automatic targeting. So if you don’t know, like let’s say you’re starting out and you’re not really sure exactly what people will be searching for when they want to buy your product.
Mike McClary (05:18):
You can use what’s called automatic targeting. Amazon will then decide where to show your product when people are doing searches or maybe when people are looking at other products out there that are similar to yours, they’ll start showing your product out there. And then Amazon optimizes that over time. What we do in our business is we do both. We know what search terms people are looking for. So we advertise on those manually. And then we also use this automatic campaign to do a lot of data mining. Amazon does a great job of showing your product all over the place and types of customers on different products, competitive screens to see if people might be interested in yours. And then you can see the results of those you can, you know, within a matter of a day or so, you can download reports and then actually see what people for, and then which searches work converting through you there.
Mike McClary (06:01):
And then you can use that to optimize your sales as a matter of fact. So sponsored product ads, both automatic manual, great. Everyone should be using them. You should be optimizing these in order of gross sales and also increase your rankings. We had, you know, we have, we’re going to have another podcast here shortly about ranking and using sponsored product ads is a great way. If you have a product that converts really well for a certain search term, spend money on that because not only will you make sales profitably, you’ll also increase in the rankings as well.
Mike McClary (06:30):
The next one I want to talk about then is going to be sponsored brands. Now this used to be called headline video ads. Like these are fairly new, only been up for a few years, but what they are, they’re a little different than sponsored product ads out there where sponsored product ads, let your product show up anywhere in the search results. So people do a search. They see your product sometimes near the top, sometimes in the middle, sometimes the bottom, sometimes on other product pages, sponsored brands, have your product show at the headlines the very top. So think of the most valuable real estate on Amazon. When people are searching, if your products show at the very top of the page, that’s incredibly valuable. That’s why they used to call it sponsored headline ads, because that’s how they were the headline.
Mike McClary (07:17):
Now that comes sponsored brands because really have to be brain registered in order to use them. And you also cannot just advertise one single product. That’s one of the downfalls of these. If you’re just starting off, you only have one product. You can’t use them. They want you to advertise multiple products. Cause they they’ll have a banner up there that will highlight usually three products. And then if they click on a product, I go to that page. If they click on your logo, which is under the part of the sponsored brands headline it’ll go to a page showing all your products again, very powerful, little more expensive because you’re getting that top real estate on Amazon.
But very, very powerful. And you can really get a lot of sales using these ads. Now I refer to these two, also a sponsored video ads because you can now as of last year include videos in these ads and where these usually show up are in the middle of the search results. So the rest of the sponsor brands are the very top sponsored videos show right in the middle. And it’s really engaging. Have you seen these
Matt Clark (08:10):
Matt out there, right? No. For our coffee brand, you know, we actually have one of those running, our advertising team kind of pointed it out to us. It’s do scrolling. It’s actually really nice. They did a really great job. Scroll down in the middle of the page. When you searched for, you know, say low acid coffee, organic coffee, and you would see our video just starts auto-playing right there on the page and it looks super nice.
Mike McClary (08:29):
Yeah, those are great. What we’ve seen that convert really well really engaging. And one of the things we always talk about in advertise, especially on Amazon, is trying to make your product stand out. The same is true for your ads. If you have a video ad and usually only one shows up on the entire page, it definitely stands out and will get a lot of attention on Amazon.
Sponsored Display Ads
Now the next type of ad is something called sponsored display ads. So for those of you who are selling an Amazon, you see these three, I talked about when you click on the advertising menu, you’ll see the first one to create is sponsored products. Next one is sponsored brands. And then the third one is sponsored display. The way that I think of this in general is kind of a retargeting ad. That’s primarily how people use these.
Mike McClary (09:09):
So if you want to target people who have already viewed your products, you sponsor display because Amazon will show them to the people. You actually have a lot of control over this, which products did they view? What was the time period? How long ago was it since they viewed it. And then you can tell which products you want that to show out there. The other nice thing about this is you have some control over the creative where it’s sponsored products can change anything about the ad.
They see they’re going to see your product, the price, and the name of this under sponsored display. You can put whatever image you want up there. So it can be a lifestyle image. It doesn’t have to be just your product on the black, on a plain white background. You control a headline, so can be something a little more engaging. And then you also control a little tagline below that as well. And then that way it’s a much more engaging type of ad out there. So if you’re targeting customers, who’ve seen your product, you can, and they’ve looked at before and you think that there’s chance to reconvert them. You can tailor that message to them. And
Matt Clark (10:00):
This is sponsored display only inside of Amazon.
Mike McClary (10:03):
A great question. No, it’s not. So you can control where you want it to be. So there is sponsored display in Amazon. There’s also sponsored display outside of Amazon. What I’ve seen when I’m running these ads. It used to be when it start up just outside of Amazon, that version of it was horrible. So I believe they use like a lot of the Google display network. If you’re aware of that, that’s simply anyone who creates a website out there can be a part of Google’s advertising platform where they’ll put banner ads or a little pop-up in that pop up little ads on your site and people click on them. They get paid. So your ad used to just show it to all these other, you know, websites all over the world. And then every time someone clicked on it, you would get charged.
Mike McClary (10:41):
And that traffic typically isn’t that great. That’s my experience. Maybe it’s working really well for other people, but for us, the best type of retardant are those on Amazon. We showing your ad to those people on site, on Amazon. Another thing you can do in sponsored display ads is you can also target products directly and categories directly.
So what you do is you go up, you can research your competitors. You can find out which ones you believe that you have a chance to beat. Let’s imagine competitors that a lot more expensive than you or competitors that have a worst ranking or rating than you. Maybe you have a four and half star product. They have three and a half stars. You can search warrant, target those products specifically so that your product will show up them. Others are looking for theirs. It’s a great way to really get a high converting ad.
Mike McClary (11:23):
Cause if you know that you can beat this other seller, you know, nine out of 10 times then target that specific seller and your ad will show up on there and you again, control the creative. So that’s another way to use sponsored display ads as well. And we see these getting better and better over time. Again, started off, didn’t seem to work very well, but now these are becoming a really high converting traffic source risk, not high volume, but very high converting. So it’s another nice way to add additional sales to your business.
The next one then is going to be called stores. I this, because this is not technically an advertising, our type of advertising platform on Amazon. But when I went and did a lot of research on my, on advertising, I noticed that they consider stores as part of their advertising platform right up there where sponsored display products and brands.
Mike McClary (12:07):
So stores are only for brand owners and allows you to showcase all of your products. It’s completely free. That’s a nice thing about it. You go to your brand dashboard, you can create a store. You can talk about, you know, your, your brand story. You can put videos on this page. You can highlight the products that you want to, you can create multiple versions of these. So if you have a special holiday store, instead of going out there and trying to like scurry and get it all done in time, you can create a well ahead of time.
And then when the holidays come around, you can turn it on. If you do a lot of seasonal sales, maybe during the spring time or center summer, you can actually create the stores and have them ready to go and switch between them. So they’ve gotten a lot better than they used to be in the past. And again, completely free and a light to really showcase the brand the way that you want to. I don’t know if you guys set up a story yet for your
Matt Clark (12:50):
Brand. Not that I know of. I don’t think so. I think we focus mainly on the first couple of these advertising sources so far. Gotcha. What
Mike McClary (12:56):
I, what I’ve seen in the past is you’re allowed to, or you can send traffic straight to stores if you’re paying for traffic. As a matter of fact, that used to be the sponsored brands. One of the main places they wanted you to send traffic to was to stores. But we never saw them convert very well. So what we do is we have stores for our brands but we don’t pay anything for them. We just let them shorten results because stores will show up in some search results. When they, when Amazon feels that your brand is important, they’ll still show the store. So it’s a good thing to do. It’s free. You might as well create an additional source of traffic. Doesn’t cost you it.
Where to Spend The Most On Advertising
Matt Clark (13:31):
And so far, you know, we’ve covered four different kinds of these. Where do you think people should put most of their focus? Initially,
Mike McClary (13:37):
Definitely sponsored products is the number one. It’s still the bread and butter. I would say that 80% or more of all of our advertising spend goes towards sponsored products. It’s the easiest to use. It’s the easiest to track. You can tell exactly what’s converting. What’s not converting. You don’t need any special software. I think, you know, I’ve talked about a few there’s, there’s a few software platforms out there that you can I guess sign up for and they’ll help you manage sponsored products, but you don’t need them with the reports that Amazon gives you pretty much every week. You can download exactly how your ads are performing and you can see which search terms are not working and turn them off and see what search terms are working and bump them up more. So it’s a very scalable, very easy way to get traffic.
Mike McClary (14:18):
That’s the first one that I would focus on the next after that would be then sponsored brands, just because if you have a brand it’s a really high converting type of traffic, it can be expensive. Don’t spend a lot of money on it because those clicks for that headline search is very top. Or those video searches can be expensive, but if you have a high converting product, that’s where I focus on the next. And then the third one would be the sponsored display. Again, spend a little money that the less you spend on sponsored display when tests out the better. I made a mistake. I spent a lot of money think, oh, it’s retardant. It’s going to convert like crazy.
And I was spending on, on a dollar to a click and a was not converting like crazy. Best thing is to test small and slowly increase your your bids per click. And then you’ll finally get to a point where you see it’s converting again. You can’t really the want what we’ve seen. At least you can’t scale sponsored display apps because you’re primarily doing retargeting. So it’s based upon how much traffic you’re already getting. That’s why I say don’t focus on as much as the other two sponsored brands sponsored products and then sponsored brands and the stores. Sure. If you have time create one, it doesn’t cost you anything, but don’t spend any money sending traffic to it. Okay, cool.
Matt Clark (15:20):
Yeah. So then it looks like we have two more final advertising.
Mike McClary (15:23):
Yeah. So the other one is called Amazon DSP. I used to think it meant Amazon display ads, but I had people like referring to it. But what it really means is Amazon demand side platform. And so this used to only be available to vendors and really large sellers. And what involved is hiring Amazon’s own internal advertising team. And they would run a campaign for you. They’d create these creatives for you or these, these ads. They would show to all these websites outside of Amazon and they would charge you her, you know, impressions. So you’d be spending per thousand impressions that charged a certain amount and they would give you all kinds of tracking over what’s working. What’s not working. I believe the minimum spend used to be around 20 or $30,000 to do one of these campaigns kind of crazy. We did it in around the holidays several years back and barely broke even.
Mike McClary (16:12):
Definitely was not a good use of our cash back then, at least I haven’t tried it since then, but I may do it because what Amazon DSP has done lately is opened up your own self-serve platform. So instead of having to go through Amazon’s internal team, which can be really slow getting information back, like you imagine, like they don’t have the ability to go in there on demand, look and tell you exactly what’s working. What’s not working. You email them, they get back to you within a few days. And then you don’t get a chance. That’ll come to talk to them. So it’s really slow getting information back. Now. You can actually do. Self-Service where you create your own different creatives. You target which websites you want. Do you have much more control over it? You have to apply for this. They don’t just give it to everyone.
Mike McClary (16:50):
But if you go to Amazon’s advertising page you can apply for it and try out Amazon DSP. However, we’re talking about like the order of priority, what I would like do all these things. This is at the, you know, near the very bottom and at least because everything else is much more scalable is much more easy to control. This one, still got to spend a lot of money to try out. So I would be, unless you’re a big brand, I would not do that. Yep.
Amazon Audio Ads
No, the final one I mentioned, I’ve never used this one, just going to throw this out there, Amazon audio ads only because Amazon talks about how this is something that they’re starting to focus on. For those of you have an Amazon Alexa or who listened to Amazon music, these ads show up on the Amazon, Hey yeah. The, the advertising music sites, a lot of people listen, Amazon music for free, and they do that by just, you know, agreeing to listen to some ads between songs.
Mike McClary (17:34):
You can actually have Amazon advertise your products, audio wise, like on a radio ad through their music platform. And then maybe get some traffic again. Haven’t tried this one. I have advertised on radio myself with mixed results as well, just not as big of a return on the investment as these other platforms we talked about. But if you’re looking for something new to try out, that could be something you can test out by going to Amazon’s advertising page and seeing what’s involved again, haven’t used it, but maybe it might be a hidden traffic source that people really aren’t using much right now.
Matt Clark (18:03):
Okay, cool. So we’ve kind of talked about six different options for Amazon advertising to kind of wrap up, I guess, and simplify, let’s talk about general strategy. So you mentioned, you know, sponsored products is probably the first thing. If somebody is fairly new to selling on Amazon and say, they’ve got a product up and running, like, what do you think they would do first? Like what’s, what’s most important for them to do and like how would they manage it for the best result?
Mike McClary (18:26):
Yeah. And it can be pretty simple when you’re starting off. First thing to do is do some keyword research in order to do that, we use a tool called Zoof and just fully aware that we’re, you know, we work with, with the owner of Zoof and we’re involved with the company there. So it’s that maybe one of the reasons why it’s our preference, but it is an awesome tool. You can easily go out there and do keyword research on your competitors. That’s the first thing I would do. If you’re selling a coffee mug, go search all the top, selling coffee mugs, you put that product into Zoof and it’ll tell you the best search terms that all your competitors are getting traffic for. And they’re converting for. They’re actually getting Salesforce. I would start off with maybe three to five of the best search terms and put those into a manual sponsored product search campaign in order to start getting some traffic and test it out.
Mike McClary (19:07):
Don’t spend a lot of money, spend 10, 20 bucks a day, just kind of test the waters and see if your product is converting well for those search terms. At the same time, I’d put another small amount into an auto search campaign as well. Very simple. There’s nothing you need to do other than, you know, give a budget, a daily budget, let’s say it’s 10 $20. Tell Amazon your product and let them go run with it. And then once you have both of those very simple campaigns working and running, I would each week go in and pull down the different reports that Amazon gives you and just see which search words are working for your product. And again, very simple. We talk more for ones that aren’t working. Let’s say that you’ve gotten 10 clicks and no sales, turn them off for search terms that are working for you consider increasing the bid.
Mike McClary (19:50):
So you get more and more traffic because, because it’s an auction out there, whoever in general has the highest bid will get more clicks. So if you have a search term that’s working really well for your product, consider increasing that bid slowly until you get to that point where, you know, you’re just breaking. Even with that search term. Now don’t worry about breaking even, because what happens is when you’re paying for advertising on Amazon, you may break even on ads, but that’s going to increase your rankings organically and get you more sales than more than make up for it. So our target usually break even on ads and the, all the other halo effect of that really increases your sales overall more makeup, where you’re spending on there.
Matt Clark (20:25):
And you start seeing keywords working on the ad side, you go back and change anything on your listing.
Mike McClary (20:30):
You know, sometimes we’ll do that because especially on the auto side, you will see that Amazon will come up with search terms. You never thought about that. You wouldn’t think are relevant for your search. And a lot of times those search terms are for related products. We saw a lot of camping products. We don’t sell a tent, but we seem to do very well advertising on tents. And so we found that that’s something that we added to our listings as well. You can go out there and say works great for, you know, putting it inside your tent. You definitely can go out there and see what’s working and then put those into your listing. Again, don’t make them front and center because that’s not your well in our situation. It may not be your product, but fit it into your listing where it makes sense because Amazon will give you more clicks and increase your ranking when they see your listing has search terms that people are searching for. Okay.
Matt Clark (21:12):
And then, yeah, I guess the last thing is on the software side. You’ve tried a lot of the console where I will only say I’ve tried one or two different software, but you’ve pretty much tried almost every major PPC software out there. And I guess your kind of conclusion is that like, it’s pretty much all of them are not worth it. Regardless of price, some are cheap, some are expensive, but it just doesn’t really seem to be worth it. I mean, one, one that we kind of wrote an article about on our blog and amazing.com is core tile, which you had a lot of experience with that kind of like interviewed you for that article. And even that one, but you said that maybe that one is different for kind of a little bit of a different product set up than you
Mike McClary (21:46):
Have. Yeah. So for me, we have a lot of very similar products. Cortel does a great job at testing out where to send your money into which products and which ones are converting the best. But for our parks, our, our brands, we have a lot of products that can range from prices from $15 to a hundred dollars. So as you can imagine on Amazon, people tend to buy the cheaper products more so as quartet was optimizing our ads, it recognized that and started sending all the traffic towards the cheaper products. Totally understand why it happened because in their mind, these were converting much better. However, we don’t make as much profit off the cheaper products and we wanted to send more traffic to the more expensive one, even though we knew that it would convert less, but at the end of the day, that’s what mattered to us.
Mike McClary (22:26):
So it didn’t work out for us. Cause they’re all about optimizing again, do a good job of that. But for our particular brand, we have a lot of the same products. It doesn’t work as well. If you have multiple people, one product, it can work pretty good. AMPIA, different products are completely different. It can also work very well. We know that Brassio one of the big companies out there buying up Amazon FBA businesses, they use Cortel to run their businesses. So clearly Cortel does work for a lot of brands out there if you get a configured. Right, right. Just for me personally, didn’t work. It’s also very expensive. It was a couple thousand dollars a month. It’s all based upon how much you’re actually spending on advertising. But again, it might be something to test out. It doesn’t hurt to try it. And you know, it, it just seemed that microgrid business wasn’t the right one.
Matt Clark (23:09):
Okay, cool. So yeah, hopefully that helps everyone kind of understand the sort of general game plan and your options for Amazon advertising. If you have any questions about Amazon ads, about anything related to e-commerce selling on Amazon, that you want us to answer in a future episode, head over to amazing.com/branded. There’s a little form on there. You can ask us questions and Mike, and I will try to answer them on a future episode. So thanks everyone for listening. And we’ll see you in the next episode.
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Matt Clark is the Chairman and Co-Founder of Amazing.com, a serial entrepreneur, and investor. He’s been featured on Forbes, CNBC, and Entrepreneur.com.