Amazon Marketing Service (AMS) is here. And it’s BIG. Amazon’s offensive to win advertising budgets showed its success recently during their 3rd quarter earnings call, when they reported a 58% year-over-year growth in ad sales. The final number: a whopping $1.12 Billion. That is big growth….and fast.
Is this really that surprising, though? You’re about to start Christmas shopping, (you’re welcome for the reminder) and there is a 55% chance that you begin your product search on Amazon. That’s bigger than Google. Bigger yet, there are 80 million Amazon Prime members, which means there is a 64% chance that you or someone in your household is one of them. These stats aren’t even the important ones, though. What is? That $4 out of every $10 spent online in the U.S. is with Amazon. Double what eBay, Apple, and Walmart(the 2nd, 3rd, and 4th largest in e-commerce sales), make and it still wouldn’t be close to Amazon.
This combination of traffic and sales data has made Amazon Marketing Services (Amazon’s self-service platform), a powerful marketing tool. Unlike Google and Bing, Amazon knows what you search for and what you buy.
So what exactly is Amazon Marketing Services?
AMS is one segment of Amazon’s offering. It’s a self-service platform capable of serving three different ad types that compare to paid search and display ads. They also offer display and banner buys, video and Kindle placements, and even homepage takeovers — who wouldn’t want that on Cyber Monday?!
While there are many different ways to leverage these offerings, AMS presents the best opportunity for advertisers to drive brand sales. This marketer has run campaigns in verticals with serious competition that have seen 45-1 returns. It gives you the ability to serve ads to people ready to buy, searching for a related product, with their credit card already out. Talk about bottom of the funnel.
Ad Types Available
Headline Search Ads are seen as the top “banner” after you make a search. These are keyword-targeted and won on a CPC bid model. Advertisers typically show a logo (left) and then three ASINs. Amazon refers to products by ASIN, which is just Amazon lingo for SKU. Users are directed to either a list of products if they click on the logo, or a particular product page of the ASIN that they select.
Sponsored Product Ads are shown in the grid of products at the top and sometimes along the right. These are targeted the same way as HSAs, but lead to the specific products page. While typical targeting is based on a CPC Keyword model, you also have the option to choose what Amazon calls “Automatic Targeting”. This means that Amazon will show your ad to the keywords/searches that it thinks will perform best. When launching campaigns for the first time, it’s a good idea to run two campaigns, one with each of the targeting methods. This is because the UI will provide a “search terms” report that you can use it to discover any keywords you may want to add to your main campaign. Sponsored product ad search terms tend to be dramatically different than what is normally seen in SEM, so prepare to be adjusting keyword sets frequently.
Product Display Ads appear on the product detail page, the bottom of search results, reviews pages, and all over Amazon marketing emails driving to the product detail page. These ads offer both product and interest targeting on a CPC model. Product targeting literally means that you choose a list of products from the UI that are related to yours. This is a great ad type if you are looking to target a specific competitor/product or launching a new product of your own.
Limitations with Amazon Marketing Services
Remember that this is a relatively new platform and the UI certainly reflects that. Think of “new” as in the “Wild West” new, not newest iPhone new. This being said, remember that despite the current limitations, this is a hugely powerful tool. Agencies may want to manage client expectations about reporting, alignment of sales data, and available metrics, and anyone e handling this in-house should relay that to their boss. It’s 2017 and we’re getting used to increasingly accurate data on increasingly complex metrics. In my opinion, this isn’t the time to be strict about that, it’s time to buckle down and crush sales.
User Interface: If you are the one about to launch these campaigns, I feel for you. The downside is that the UI looks and feels like something from ten years ago. The upside is that you may be reporting a Return On Ad Spend of 20-1 soon. It’s by no means rare. When it comes to pulling reports, be prepared to pull each and every campaign and then aggregate. Keep this in mind when designing your campaign structure. You also don’t have the ability to easily segment by timeframe or date, which can make pacing frustrating.
Metrics/Data If you have a background in SEM, SEO, or anything data related, you may find the lack of data being reported to be discouraging. Things like Impression Share don’t exist yet, and that’s not by accident. To battle this, Amazon released what they deem “Win Rate” last year, but there is little evidence that it is useful.
Multi-Brand/Product If your company has multiple brands running across AMS, don’t expect to be able to segment out Sales based on the product. If a user clicks through on a Headline Search Ad for product A, but buys product B and C, that will reflect on product A’s campaign sales data. There isn’t a way to segment this. Now, if the user buys product A, a plasma TV, and the newest season of Game Of Thrones on DVD, it will only count product A. Only ASINs under your “company code” count.
Financial Threshold Pricing is important when it comes to running AMS, not just the initial deal with Amazon. If you are currently negotiating pricing with Amazon, you should inquire as to whether the products will meet the “financial threshold” within AMS at the given price. Amazon will pause campaigns if the ASINs within them don’t meet the “financial threshold”, but won’t tell you exactly what the threshold is. Basically, if the product is cheap enough that Amazon won’t be making money off of the sale, they aren’t going to let you drive traffic to them, which makes sense. Naturally, the lower the price of the item, the more this can be an issue. Remember, though, that Amazon is quick when it comes to price matching. You may be selling a product for $100, then see Amazon price-match to another site for $80, and have the campaign paused because it now doesn’t meet the financial threshold.
This was a lot, I know, but brands and marketers shouldn’t be intimidated. AMS is an easy-to-use tool that allows you to boost bottom line sales significantly. The capabilities are growing as the marketplace demands and Amazon is doing an increasingly better job of servicing clients. They recently announced the hiring of 2,000 employees in their New York office with other offices all over the country beefing up as well. Despite the limitations, which are mostly just small annoyances, AMS presents a huge opportunity. Now go set up some ads! And when you do your Christmas shopping, make sure to click through one of them.