How do you play and win the Amazon advertising game?
Amazon advertising is a particular form of direct response marketing. So the old model of direct response still applies and still explains how you win at Amazon ads.
What’s that model?
You have a two-step cycle. The first step is research and the second step is execution.
In the research phase, you collect data and come up with educated guesses (hypotheses) as to to how to make the most successful ad campaign.
In the execution phase, you implement the guesses into real campaigns.
The campaigns generate data and you repeat the research phase. Only the second and subsequent times, your data is of better quality since it came from your own advertising, as opposed to a third party tool.
Specifically, you have three levers to make your ads successful:
- Targeting
- Creative
- Pricing
Targeting includes things such as keywords, match types, and account structure.
Creative includes your ad headline or video, product listings (photo, title, price, reviews, badges), store pages and product pages.
Pricing includes your bidding at each level from the most granular – keyword & ASIN – to least granular – campaign level placement adjustments and bid algorithms (e.g. up-and-down vs down-only vs fixed).
Advertising can have some element of luck, but for the most part it becomes successful as a result of persistent efforts to improve. In advertising-ese, “optimization.”
To optimize, you analyze your targeting, creative and pricing to see how you can do better next time.
For example, your initial product listing photo may have been poor. When you see that few people click your ads even when people are searching for your product and the ads are in the most visible place (top of search placement) then you need to think how to get more people to click. So you might test a different photo.
So the faster you can cycle through research-and-execution, the more you can win. The more you improve your targeting, creative and pricing, the better off you are. Your ads become more profitable, so you can reinvest more. This creates a virtuous cycle.
In sum:
The goal of the ad game is to show the most persuasive message, to the best targeted traffic at the best price. The faster we test and iterate on these levers, the more we win.