#WeBuildWednesdays 56: A Breakdown on Amazon PPC & Advertising 2020

Amazon & PPC Advertising in 2020

Mike: What’s going on guys this is Mike Norris I’m here today with Tarik Rahman, our Director of Paid Advertising at Youtech and we are going to talk to you about Amazon ads. Tarik why don’t you say hi to everybody.

Tarik: How’s it going, guys? I’m here finally.

Mike: Yeah this has been a long time coming. Tarik and I have actually been talking about this and I kept scheduling it for the wrong time and he was nice enough to not come down on me for that so thank you. Anyway, Amazon ads are the topic at hand today. Many people run Google ads. It’s extremely common. Facebook ads are extremely common. Amazon ads not so much really, and there’s probably a little bit of a barrier to entry, we think at least. I want to flip it over to Tarik to kind of give everyone a little bit of a summary on Amazon ads. He’s certified in Amazon so he is the expert.

Tarik: Yeah totally! So you know what you just said Norris, a lot of people obviously gravitate towards Google because it’s the number one search engine out there but I think you know there’s a lot of similarities with Google and Amazon. I think Amazon kind of tailors to people that have e-com sites or are selling products versus services so I think that’s kind of where Amazon sets themselves apart from Google. 

Obviously Google has Google Shopping ads but I think throughout the day or throughout your day or throughout your week, how many times you hear people say “oh yeah I just ordered that off Amazon” or “oh I’m going to go look on Amazon” and it’s on there so the opportunity to get in front of those right people that are ready to purchase your products, Amazon is just kind of a no-brainer. 

Mike: Yeah and I’ll be honest I do that all the time. I know where Google partners here I hope our Google team isn’t watching. I’m sorry, we love you, we really do but if there’s a product I’m buying it on Amazon. Free one-day shipping? I’m all over that! Plus I watched Jack Ryan on Amazon Prime and that’s a pretty good show. 

When it comes to advertising though, and you kind of touched on this Tarik – I think Google and Facebook have a clear advantage over Amazon when it comes to services. Amazon is all product-oriented so if you don’t sell a product this video is probably not for you. Maybe it is to the extent that we’re telling you that you shouldn’t run Amazon ads. Outside of that, it really is product oriented. So in what situations do you think Tarik, would it be good for someone to run Amazon ads? What kind of companies? What kind of products? 

Tarik: Yeah, so like I mentioned you can find just about anything on Amazon whether it’s consumer packaged goods, whether it’s a bag of beef jerky, whether it’s candy, whether its water, I mean everything is on Amazon. So basically, if you have a physical product that you are selling online or in a store, Amazon is a no-brainer because of the fact that so many people rely on Amazon to not only compare prices but like you mentioned if you’re an Amazon Prime member you get the free two-day shipping. So there are just a lot of benefits to anyone that has an actual ecommerce store and they’re trying to get in front of those people that are looking for their products or might be exploring their products. 

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Types of Amazon Ads: What Are They?

Mike: Yeah, and what kind of ads can people run? I think that’s really an area where if you’re not doing this you don’t even really know. I mean personally, when it comes to Google I can identify an ad like that. I can see your search ads, or shopping ads, everything. On Amazon, I see ads but they don’t seem quite as in-your-face.

Tarik: Totally. Well, there are basically two ways to run sponsored ads on Amazon. You can either run sponsored products, which are basically individual products. So when you go to Amazon and you type in “Nike shoes” you typically see the first three spots would be sponsored ads. So that’s one type of ad that you can run on there. 

You can also run sponsored brands so like I just said if you go and type in “Nike shoes” sometimes you’ll see that Nike as a brand is taking over that top position. So sponsored brands gives you the opportunity to not necessarily promote one individual product but promote a collection of products or a collection of shoes or sportswear, sweatshirts, whatever it might be. So think of it in the sense of advertising your store or your brand as a whole as opposed to sponsored products, which would be individual products

Mike: Is it a requirement that these products are all on Amazon? 

Tarik: Yep, Correct. 

Mike: So you can’t run a display ad and shoot people off to your website? 

Tarik: You’ve got to stay within Amazon, correct. 

Mike: I got it, that makes sense. So are there budget requirements?

Tarik: I think the minimum is one dollar a day. Obviously one dollar a day isn’t going to get you far depending on what you’re selling. 

Mike: I don’t recommend that. 

Tarik: Yeah, so it just kind of depends. It works the same way that Google does, so when you’re running a sponsored product campaign you are running on a cost-per-click basis. So just like Google, you’re able to control how your ads pop up depending on the keywords that you go after. Again, just like Google, there are different variations so you can run exact match, you can run phrase match, you can run broad match. So depending on the keyword structure, what your end goal is, or what you’re trying to accomplish, your budgets can range anywhere from five hundred dollars to five hundred thousand dollars. It’s just kind of what you want to spend there. 

Mike: Okay, and is all the targeting keyword-oriented then? 

Tarik: Yeah, for the most part, most things are our keyword oriented. If you’re going for more of a broad point of view of things and you could go just general. So you could run just “shoes” and then your shoes could show up or it could be “running shoes” if they’re specific to running shoes.

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Retail-Ready Checklist

Mike: So anything else on the Amazon ad front that we might have missed?

Tarik: Honestly, I think the most important part of running Amazon ads is just having your products retail-ready. With any sort of campaign that you’re running with Amazon there’s a retail-ready checklist which consists of a handful of things. Do your products have titles, do you have descriptions, do you have images? 

One big thing is customer reviews. The requirement for Amazon is to have at least 3.5 stars or more with at least 15+ customer reviews. So what Amazon is trying to do is show the right product to the right person and ensure that that person is having that flawless experience of buying a good product, being able to read the reviews, being able to see what other people are saying about those things. Amazon is very picky on having your items retail-ready. 

Other things that kind of go into that checklist would be your star rating, your inventory if you don’t have products available for people to purchase Amazon is not going to favor you and want to show your ads when you don’t have anything in stock. 

Again, there are also other things that you can do to enhance content on some of your products and things like that just to give the reader a little bit more information on dimensions, pictures from different angles, the weight of the product. These are a lot of things that, although not every person is concerned about there are a lot of people that are very picky about the products that they’re buying. They want to make sure that this is the right thing, it’s the right size, it’s the right weight, whatever it might be. So just generally speaking, as long as you’re following that retail-ready checklist you’re basically setting yourself up for success right off the bat. 

Mike: That makes sense because at Amazon, pretty much everything they do is focused on the customer experience. 

Tarik: Totally!

Mike: It makes us that the ads would be the same way. They don’t want people to be shown crappy products. They don’t want to ruin that experience.

Tarik: Exactly. If you don’t have these kinds of requirements in place that’s where the user experience kind of starts to plummet and that’s where you get people who try to avoid Amazon instead of coming to Amazon for everything that they’re looking for.

Mike: That makes sense. Platforms like Facebook especially is under so much scrutiny for

the types of ads that it allows people to run. So it’s good to see in some ways and it’s somewhat refreshing that Amazon has such a strict policy that you can’t just fire something up and run ads. I’ll tell you what, I have come across some ads on Instagram specifically where it looks good. It’s a watch or something and you start looking at their website and then you go to their social media and they have no followers at all.

Tarik: It throws up all these red flags. You don’t know if they’re a full company or if this guy just created this account to try and get people to up its number. So yeah, it goes a long way.

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Projected Market Growth for Amazon Ads

Mike: Yeah, definitely. Well good, I think I think we’ll leave everyone with this and one final point here. Right now, Amazon accounts for about 5-6% of all digital online ad spend right now and Facebook and Google combined for about over 50% of that. Like we said earlier when it comes to the services and everything Amazon is kind of they’re building out their home services but they’re probably never gonna be to the level of Facebook and Google when it comes to service. 

If your business sells a service Amazon still probably not the place for you at least right now the way that their current ecosystem is set up but they do have some stuff. That said they are projected by the Year 2021 to eclipse the 10% mark when it comes to all that digital ad spend so it is an area that’s growing and now is probably a really good time to jump on because there aren’t that many competitors right now whereas you look at the saturation of these other platforms. I mean Google and Facebook – everyone’s on those I mean and they’ve made the barrier to entry so low that a mom and pop shop can jump on and just start firing out ads. 

With Amazon, it does seem there is more regulation but you’re probably going to get more bang for your buck. Now, the only thing to consider is Amazon is, of course, taking a cut of that because your product is on Amazon so you have to factor that in as well but those decreased advertising costs could be appealing to some business owners. 

Tarik: Yeah I think one thing that I kind of want to chime in there too is obviously the advertising aspect of Amazon is not quite where Google is today but they are making massive updates to their platform, the amount of targeting, the things that you can do within the platform. It’ll be interesting to see, although they’re, I would say, maybe 10 years behind what Google’s doing it’s gonna be interesting to see how they’re going to continue to change and evolve the platform and just make it better for advertisers. 

Mike: Yeah and I think that’s fair. I think Google is kind of the gold standard still when it comes to that. I mean they’re on top of it and you and I get access to all the betas and everything and all the stuff they’re pushing out and speed at which they do it it’s hard to even keep up. It really is, and the sophistication is just incredible. All the automation is incredible, the AI is insane. 

Facebook has come a long way too from when we first started using the platform. I mean, it was very bare-bones. I would imagine Amazon, given their size and given that when they do things they whole ass it, they don’t half-ass it so it’s only a matter of time. 

Tarik: I think the biggest thing about Amazon for anyone that’s watching this is, like I mentioned before – just think of how many times you go to Amazon to search for products. That’s kind of if you’re jumping on board to start doing Amazon ads your audience is right there. You know the people that are on the site and that are looking for products so it kind of helps. Aside from Facebook, it’s kind of more going after an interest base where this is physical products. We know the users that are coming to the site are looking to make purchases so you’re placing yourself in front of the right people at the right time.

Mike: Yeah and on that note, I don’t want any of the stats that I threw out there to deter people. I know 10% doesn’t sound like a lot but over 50% of all online retail transactions in the United States come from Amazon. So, it is the place to be if you’ve got products. You want to be on it regardless of if you’re running ads or not or wearing ads, you do want to be on Amazon regardless. All right, well I think that about it we’ll wrap up here. Thank you guys for your time today, thank you Tarik for joining us. 

Tarik: Yeah! I appreciate it!

Mike: This has been very good, and as far as a learning experience I think I’ve learned some things too. So thank you!

Tarik: Awesome, love it!

Mike: Thanks! Happy Wednesday everybody, have a good one.

Tarik: See you guys!

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