Advertising on Amazon is a critical aspect of any successful e-commerce strategy. With millions of users visiting the platform daily to search for products and make purchases, advertising on Amazon is a powerful way for businesses to increase their visibility and reach potential customers.
By leveraging Amazon’s advertising tools, businesses can target specific audiences based on a range of factors, including search keywords, product categories, and customer demographics. This can help to build brand awareness and generate sales, particularly for new businesses seeking to establish themselves on the platform.
Why does having a Strategic Advertising Strategy Matter?
Despite the importance of a healthy return on ad spend for advertisers, many fall short of achieving this goal due to poorly planned and executed advertising strategies. This results in overspending and underperformance, leaving businesses with wasted ad spend and missed opportunities. The biggest contributor to this catastrophe is not having a well-structured advertising campaign aligned with your campaign goal.
Before getting into the details of the structural changes or the SOPs of setting up your campaigns, let’s look at the basic hierarchy of sponsored ads on Amazon:
How to Identify Structural Errors in Your Campaign Structure?
To identify structural errors that would possibly be the prime cause of the poor performance of your advertising – run the following top-to-bottom analysis:
- Check how many ad groups are created under a single campaign.
- Check how many products (ads) are listed under a single ad group.
- Check how many targets are added under each ad group.
- Check if more than one match types are used per ad group.
- Check if negative targeting is practised across the campaigns including automatic, broad, and category targeting.
You’re most likely to have structural errors if your findings include:
- Multiple ad groups are created under a single campaign.
- Multiple products (ads) – including variations – are listed under a single ad group.
- More than 20 targets added under each ad group.
- More than one match types used per ad group.
- Negative targeting is not practised across the campaigns including automatic, broad, and category targeting.
How Do Structural Errors Make it Difficult to Achieve Your Advertising Goals?
1. Multiple Ad Groups Created Under a Single Ad Group
Among the many reasons for not creating multiple ad groups the primary reason is that the daily budget is assigned at the campaign level, and based on the performance and relevance metrics one ad group might consume more budget than the other – limiting the performance of the campaign as a whole. Additionally, the products advertised in the other ad groups might not get the exposure needed for generating sales.
2. Multiple Products (Ads) – Including Variations – Listed Under a Single Ad Group
Adding multiple products, which may or not be a variation, to be advertised in a single ad group gives control to the Amazon algorithm to pick the product to advertise based on the performance and relevance metrics, similar to the ad group and therefore, only the product which is likely to be purchased is advertised and leaves the rest with no or fewer results to draw any useful analysis. Moreover, amazon doesn’t give the advertising real estate to the variations i.e. only one of the variations will be advertised at a given time.
3. More Than 20 Targets are Added Under Each Ad Group
Each target – that can be a search term, a product or a category – has a number of searches/visits linked to it based on the shopper’s data that Amazon tracks. Putting multiple targets together with a limited budget again tilts the budget in the favour of the highly searched/visited targets. With the imbalance in the budget, many targets won’t generate any results and the overall performance of the account>campaign>adgroup degrades over time, taking you further away from your advertising goals.
4. More Than One Match Type is Used Per Ad Group
Many limitations occur when you use multiple match types i.e. exact, phrase and broad in the same ad group, including the negation of non-performing search terms as you can only implement negative targeting using exact or phrase match. Additionally, we yet again surrender control to Amazon to decide which target to use while advertising our keyword. Similar search terms compete against each other to get placement, limiting the chances of the product improving its ad ranking.
5. Negative Targeting is Not Practised Across the Campaigns
Getting advertised on irrelevant search terms or categories can cause budget bleeding and result in poor performance of the product and impacts brand building as a whole. With targeting options such as automatic, broad and category there is a huge chance that Amazon showcases your product to irrelevant audiences curtailing your chances for conversions. Therefore, Amazon gives you the option to use negative targeting, where you disapprove/stop it from showing the ad on the selected search terms and products.
Making these structural changes gives you more control to create, implement, monitor and optimise your ads, including:
- Improved ROAS
- A strategic budget allocation that will transcend down to the performing keywords eliminating chances of wastage spend
- Relevant Targeting
- Improved Ad Ranks
- Scaling Ads can be done
- Brand Amplification
- Allows strategic implementation of the marketing funnel
- Improved conversion rates
- Improved click-through rates
By having a clear advertising objective and well-structured campaigns, Pattern has helped sellers accelerate their ecommerce growth on Amazon. Our granular strategic marketing enables us to always stay in control of our marketing budget and the results. Below is an example of how we leverage Amazon ads to create strategic and well-structured campaigns aligning with the advertising goals.
|Campaigns||Targets||Ad Format||Objective||Match Type||Funnel Stage|
|Sponsored Product Ads – Manual||Keywords||–||Awareness||Exact||Bottom|
|Sponsored Product Ads – Manual||Keywords||–||Awareness||Phrase||Bottom|
|Sponsored Product Ads – Manual||Keywords||–||Awareness||Broad||Bottom|
|Sponsored Product Ads – Manual||Products||–||Product Conquesting||–||Bottom|
|Sponsored Product Ads – Manual||Category||–||Category Targeting||–||Bottom|
|Sponsored Product Ads – Auto||Keywords||–||Discovery||Close||Bottom|
|Sponsored Product Ads – Auto||Keywords||–||Discovery||Loose||Bottom|
|Sponsored Product Ads – Auto||Products||–||Discovery||Substitute||Bottom|
|Sponsored Product Ads – Auto||Products||–||Discovery||Compliment||Bottom|
|Sponsored Product Ads – Branded – Manual||Keywords||–||Defence||Exact||Bottom|
|Sponsored Product Ads – Branded – Manual||Keywords||–||Defence||Phrase||Bottom|
|Sponsored Product Ads – Branded – Manual||Keywords||–||Defence||Broad||Bottom|
|Sponsored Product Ads – Branded – Manual||Products||–||Cross-Selling||–||Bottom|
|Sponsored Brand – Product Collection||Keywords||Image||Awareness||Exact||Top & Middle|
|Sponsored Brand – Product Collection||Keywords||Image||Awareness||Phrase||Top & Middle|
|Sponsored Brand – Product Collection||Keywords||Image||Awareness||Broad||Top & Middle|
|Sponsored Brand – Product Collection – Branded||Keywords||Image||Awareness||Exact||Top & Middle|
|Sponsored Brand – Product Collection – Branded||Keywords||Image||Awareness||Phrase||Top & Middle|
|Sponsored Brand – Product Collection – Branded||Keywords||Image||Awareness||Broad||Top & Middle|
|Sponsored Brand – Store Spotlight||Keywords||Image||Awareness||Exact||Top & Middle|
|Sponsored Brand – Store Spotlight||Keywords||Image||Awareness||Phrase||Top & Middle|
|Sponsored Brand – Store Spotlight||Keywords||Image||Awareness||Broad||Top & Middle|
|Sponsored Brand – Store Spotlight – Branded||Keywords||Image||Awareness||Exact||Top & Middle|
|Sponsored Brand – Store Spotlight – Branded||Keywords||Image||Awareness||Phrase||Top & Middle|
|Sponsored Brand – Store Spotlight – Branded||Keywords||Image||Awareness||Broad||Top & Middle|
|Sponsored Brand Video||Keywords||Video||Awareness||Exact||Top & Middle|
|Sponsored Brand Video||Keywords||Video||Awareness||Phrase||Top & Middle|
|Sponsored Brand Video||Keywords||Video||Awareness||Broad||Top & Middle|
|Sponsored Brand Video – Branded||Keywords||Video||Defence||Exact||Top & Middle|
|Sponsored Brand Video – Branded||Keywords||Video||Defence||Phrase||Top & Middle|
|Sponsored Brand Video – Branded||Keywords||Video||Defence||Broad||Top & Middle|
|Sponsored Display Contextual||Products||Image||Product Conquesting||–||Middle & Bottom|
|Sponsored Display Contextual – Branded||Products||Image||Cross-Selling||–||Middle & Bottom|
|Sponsored Display Contextual||Products||Video||Product Conquesting||–||Middle & Bottom|
|Sponsored Display Contextual – Branded||Products||Video||Cross-Selling||–||Middle & Bottom|
|Sponsored Display Amazon Audience||Audiences||Image||Awareness||–||Top & Middle|
|Sponsored Display View Remarketing (7-365)||Audience Category||Image||Consideration||–||Middle & Bottom|
|Sponsored Display Purchases Remarketing (7-365)||Audience Category||Image||Retargeting||–||Bottom|
|Sponsored Display Amazon Audience||Audiences||Video||Awareness||–||Top & Middle|
|Sponsored Display View Remarketing (7-365)||Audience Category||Video||Consideration||–||Middle & Bottom|
|Sponsored Display Purchases Remarketing (7-365)||Audience Category||Video||Retargeting||–||Bottom|
Effective Amazon advertising can enhance visibility and enable businesses to tap into potential customers. To achieve a favourable return on ad spend, businesses must avoid poorly planned and executed advertising strategies. Structural errors, such as creating multiple ad groups, adding multiple products to an ad group, having more than 20 targets per ad group, using multiple match types per ad group, and not practising negative targeting across campaigns, can impede the achievement of advertising goals.
Rectifying these structural shortcomings can lead to improvements in critical metrics such as ROAS, budget allocation, relevant targeting, ad ranks, scalability, brand amplification, strategic implementation of the marketing funnel, conversion rates, and click-through rates.
To understand how Pattern can accelerate your growth on Amazon and other marketplaces, get in contact with our team now.