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How you can conquer the marketplace with Amazon Marketing

10/30/2020 • Reading time: ca. 9 min • by Trutz Fries

Amazon is the most frequently used search engine when it comes to products. The marketplace is developing more and more from a sales to a marketing platform. "Pay-to-play" applies in more and more categories to gain visibility. Amazon continuously provides retailers and manufacturers with new marketing tools. It is not always easy to keep track and understand which instruments are suitable for which purpose.

Below you will find an overview of the various forms of advertising that will help you increase sales. We will discuss the topics of Amazon Advertising, Amazon DSP, various pricing measures as well as the Amazon Brand Store as a marketing instrument.

The advertising formats support sales in different ways: While Amazon Advertising and Amazon DSP help to increase the visibility of products, pricing measures and the Amazon Brand Store help to improve the conversion rate. The formats therefore complement each other well.

Amazon Advertising

Amazon is increasingly offering advertisers the opportunity to actively promote products both within the platform and on external sites, i.e. to help them achieve greater visibility. While platforms such as Google already generate the majority of their revenues through paid advertising, Amazon is only just getting there.

History of Amazon Advertising
Until 2018, Amazon Advertising was not yet mentioned, but Amazon Marketing Services (AMS). This was the collective term for Sponsored Products, Headline Search Ads and Product Display Ads. But to make it more accessible to the public, the names Amazon Media Group (AMG), Amazon Marketing Services (AMS) and Amazon Advertising Platform (AAP) were unified and renamed Amazon Advertising.

Amazon gives paid placements more and more space on its own platform. The resulting challenge for manufacturers and retailers: The organic visibility of products is decreasing.

Example search results: Often the first organic hits are only found "below-the-fold", so the user has to scroll first to see them. Advertising is therefore increasingly the only way to appear at the top of search results.

Amazon provides various tools to help advertisers place their products in the search results and on the product detail pages. The advertising tools differ in particular with regard to placement (where the advertisement is played out) and target group selection (how do I choose whether an advertisement should be played out).

What these formats have in common is that they are click-based advertising formats (cost-per-click or CPC), i.e. the advertiser only pays when a customer clicks on the ad. The available advertising spaces are allocated in an auction procedure. Advertisers determine the maximum amount they are willing to pay for a click on their ad. The higher this amount is, the higher the probability of getting a good ad space. However, Amazon not only considers the amount of the bid, but also the probability with which the advertised product is advertised.

In the following we will discuss the three formats:

  • Sponsored Products
  • Sponsored Brands
  • Sponsored Display

Amazon Sponsored Products

Amazon Sponsored Products are ads that are created based on existing product information. All the advertiser has to do is select the products and activate the respective targeting options.

The following are a few examples of Sponsored Products ads:

Amazon Sponsored Products
Figure 1: Example of Sponsored Products ads under a product
. Amazon Sponsored Products mobile view
Figure 2: Example of Sponsored Products ads under a product in the mobile view
Amazon Sponsored Products in the search results
Figure 3: Example of Sponsored Products ads in Amazon search results

As you can see, Amazon Sponsored Products ads are displayed both in search results and on product detail pages. This is due to the available targeting options that advertisers can use.

For example, sellers and manufacturers can use keyword-based targeting, i.e. bidding on specific search terms. If a potential buyer enters this keyword in the search bar, the ad is played in the search results, provided the advertiser wins the auction. Here is an example of Amazon Sponsored Products ads in the search results:

Keyword-based targeting for sponsored products ads
Figure 4: Example of keyword-based targeting for sponsored products ads
.

With product-based targeting, the advertiser selects foreign products, on whose detail page the advertisement should be displayed. However, it is also possible to select entire subcategories. In this case, the advertiser will be shown for all products in this category. This simplifies the selection, but also increases the waste coverage. Here is an example of such an Amazon Sponsored Products ad.

Product-based targeting for sponsored products ads
Figure 5: Example of product-based targeting for sponsored product ads
.

Another option is to leave the selection of keywords and products to Amazon. These are so-called automatic campaigns. In this case, Amazon takes the wheel and plays out the products whenever it thinks it makes more sense than if the probability of a purchase is high.

Sponsored Products is available to suppliers, sellers and agencies. The products must fall into at least one authorized category.

Amazon Sponsored Brands

Placement of Amazon Sponsored Brands ads
Figure 6: Example for placement of Sponsored Brands ads

Amazon Sponsored Brands ads are very similar to Sponsored Products ads in terms of targeting options. Here, too, there is keyword and product-based targeting.

There are differences in the placement of the ads as well as in their appearance. Here is an example of a Sponsored Brands ad:

Placement of Amazon Sponsored Brands ads in mobile view
Figure 7: Example for placement of sponsored brand ads in mobile view
Placement of Amazon Sponsored Brands ads under a product
Figure 8: Example of placement of sponsored brand ads under a product
.

Amazon Sponsored Brands Ads consist of the brand logo, an individual headline and at least 3 products. But Amazon often experiments with the appearance. A click on the ad leads the customer either to a product detail page, to the brand store or to an individual product list.

Amazon Sponsored Brands is available to manufacturers and sellers whose brands are registered in the Amazon Brand Registry.

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Amazon Sponsored Display

Amazon Sponsored Display Ads look similar to Sponsored Brands ads when played on product detail pages. The main difference is the targeting and the available placements.

With Amazon Sponsored Display ads, you have the option of targeting the ads in addition to the familiar product- or category-based targeting. Currently the following target groups are supported by Amazon:

  • Customers who have viewed their own PDS (Conversion)
  • Customers who have visited a comparable other product or category (Consideration)
  • Clients with specific interests (Awareness)

In addition, these ads can be played not only within Amazon, but also on other websites that are connected to the Amazon advertising network. A well-known example is the site of the "Internet Movie Database" (IMDB), which belongs to the Amazon group.

In Germany, vendors already have access to this advertising format. The Product Display Ads formerly available to vendors are now being converted to this advertising format.

Sellers are still waiting to be verified for Sponsored Display ads. On the US marketplace the Sponsored Display ads are already available for sellers as well as for vendors. Amazon is slowly rolling out the access, so it is only a matter of time until sellers can also use the Amazon Sponsored Display campaigns on the German marketplace.

Amazon DSP

The "DSP" in Amazon DSP stands for "demand side platform". This is a term from the field of so-called programmatic advertising, where ads can be played out on the basis of very differentiated criteria. And that works similarly on Amazon as well.

The format differs in almost every respect from the formats already discussed.

Amazon Advertising

  • Billing: CPC (cost per click)
  • Minimum budget: none
  • Access: Self-Service
  • Inventory: Within Amazon
  • Targeting: Keyword- and product-based, limited target group-based

Amazon DSP

  • Billing: CPM (cost per impression)
  • Minimum budget: a. 10.000 EUR
  • Access: Managed Service or Self-Service
  • Inventory: Inside and outside Amazon
  • Targeting: target groups or retargeting

Especially the so-called "inventory" is different. “Inventory" refers to all possible advertising spaces on which the advertisement can potentially be played out. By means of Amazon DSP you have not only the possibility to display ads on Amazon, but also access to the "publishers" (other websites that display ads on their site) connected via so-called "Exchanges". This gives you access to a much larger target group.

In addition, the choice of target groups makes a big difference. Thus, target groups can be selected either on the basis of certain characteristics or within the scope of the so-called "retargeting". In the context of retargeting you can approach customers who may have been on your homepage before. This requires that you use an Amazon tracking pixel on your homepage to mark these persons.

All in all, the targeting options with Amazon DSP are quite diverse, so you should pay close attention to which settings you choose. Because of the large inventory it is easy to "burn" a lot of money quickly. So this solution is more for advanced users.

Pricing measures / Amazon promotions

Both as a Vendor and as a Seller, you have various pricing measures at your disposal, which you can use specifically as additional sales instruments.

The following table gives you an overview of which discount promotions you can take advantage of, depending on whether you are a Seller or a Vendor.

Seller Vendor
Discount Yes Yes
Amazon savings subscription Yes Yes
Blitz offers Yes Yes
Coupons Yes Yes
Exclusive prime discounts Yes No

Discount

A discount promotion is a campaign that is displayed on a product detail page at Amazon for up to 12 months. It can be created within 24 hours. There is no minimum discount level requirement. Discount campaigns are not advertised on the offer page. They are only displayed on the product detail page.

Different types of discounts are available:

  1. Discounts can be granted on a single product, for example in the form of promotional prices. On the page, the regular price is crossed out and the promotion price and savings are displayed ("Instead of.... Now ..."). Of course, this depends on the type of discount you have chosen.
Amazon special offers
Figure 9: Example of an Amazon promotion price
  1. Discounts can also be applied to a specific combination of items. It is possible to specify a certain percentage per purchased item as buyer and thus stagger the discount. For example, the customer can receive 5% when buying two products, 10% when buying three products and 15% when buying five products. You can decide how the discount is to be staggered.
Amazon special prices in the form of graded discounts
Figure 10: Example of staggered discounts
  1. In addition to the discounts it is also possible to send free articles. You determine after how many products the customer receives a free item.

Both as a Seller and as a Vendor you can apply these actions to your products. There is no campaign budget, which means that you cannot determine the maximum number of units to be sold in your campaign. You therefore pay a fixed amount of financing per product sold.

Amazon subscribe & save

Amazon subscribe & save
Figure 11: Example for an Amazon subscription
.

The Amazon subscribe & save grants a discount of up to 15% for regular deliveries of an item in the subscription. These are often products that are regularly re-purchased, such as household goods or food. You can offer a subscribe & save both as a seller and a vendor.

Amazon offers you, with a savings subscription, the possibility to win returning buyers and to build up long-term customer loyalty. For the buyer it is a subscription, but they can cancel it at any time. So they do not enter into any obligation and can manage their individual needs via "My account".

You can choose between three basic financing options: 0%, 5% or 10%. Subscribers who receive 5 or more subscriptions with one shipment will reach tiered status and Amazon will add an additional 5% discount for a limited period of time. Concrete examples of the basic financing options can be found here In addition, any coupons or other promotions you offer will also apply to your savings subscription products. git However, in order to be able to create an Amazon Subscribe & Save as a Seller, your Seller account has to meet some requirements:

  1. It must be properly guided.
  2. The account needs a predominantly positive evaluation.
  3. Your account must also have been actively used for at least 3 months in the context of shipping through Amazon. A savings subscription is therefore only possible with FBA.

In addition, since June 15, 2020, the registration of new products is restricted to brand owners. All products registered before June 15 remain eligible for the savings subscription program.

Amazon lightning offers

Amazon lightning offers
Figure 12: Example for an Amazon Lightning Offer

The Amazon Lightning Offer is a paid advertising offer, where an item is offered in a short period of 4 to 12 hours at a strongly reduced price. Amazon Lightning Offer gives sellers and vendors the opportunity to sell their product inventory in a short time.

There are two fees when running a lightning offer: a basic marketing fee (regular 35€, at certain events 70€), which is charged for each lightning offer that is run live, and a fee for each product purchased through the lightning offer. The fee is displayed during the quote creation process when you select the schedule for the quote.

Amazon Lightning Offers have the advantage that they are listed on the central Amazon offer pages, which are frequently visited by customers. This increases the visibility of the items in the Lightning offers for a short time. In addition, the products are marked with a special label.

Label for Amazon lightning offers
Figure 13: Amazon Lightning Offer Label
For the creation of an Amazon Lightning Offer certain conditions must be met:

  1. The seller must apply, as not every product can be approved for a flash offer (e.g. alcohol)
  2. The product must have a rating of at least three stars and must be able to be sent via Prime
  3. The price of the product must be reduced by at least 15% and undercut the lowest selling price of the last 30 days by at least 5%.
  4. It must be a new product. Used products are excluded.
  5. Campaigns for the same product must not overlap

If there are several variants of a product, a minimum number of the available variants is included in the offer to give the buyer the greatest possible choice. In addition, a variety of variants of the product selected for the lightning offer may prove to be advantageous for its approval.

However, an Amazon Lightning Offer is not automatically created. Amazon checks whether a minimum turnover can be guaranteed with the product because the offers must also be worthwhile for Amazon. In addition, you can only select the period of time in which the lightning offer should appear, but not the day of the week or time of day, these are determined by Amazon. This means that your offer might get less attention than expected, depending on the time of day. Also, there is a lead time of 4 weeks if you plan your Amazon Lightning Offers.

Amazon Coupons

Amazon Coupons
Figure 14: Example of an Amazon Coupon

With the help of Amazon Coupons, both sellers and vendors can also generate additional sales. By awarding your product more attention and sales of selected products can be increased. Once you create a coupon, it is automatically promoted on Amazon's product detail page, coupon landing page, and search results. It is also possible to create a coupon especially for certain target groups, e.g. for prime customers.

Amazon Coupon Landingpage
Figure 15: Amazon Coupon Landingpage

A coupon reduces the price either by a fixed euro amount or by a percentage value. The customer can be guaranteed a discount of 5%-80%. It appears in orange below the item price with the text "Redeem discount coupon and save X-€ or X-%%%".

If the customer places a check mark in the checkbox, the coupon is automatically activated and deducted. If the customer clicks on DETAILS, he/she will receive further information on the validity and another link to a special landing page on which all valid coupons on Amazon are listed. Sellers must make sure that their product price is reduced by at least 1€.

A coupon can be redeemed either once or several times – it’s up to the seller. When creating a coupon, you must allow 1-2 hours lead time. In addition, a coupon can be planned 1 year in advance and a duration of 1 to 90 days can be set.

The Amazon Coupons belong to the fee-based advertising offers on Amazon. Sellers and vendors have to pay a maximum amount of 0,50€ per product. To create a coupon for one of your products, you do not have to meet any requirements.

In order to attract more customers to the campaign, you should consider entering into cooperation with deal platforms that collect and publish discount campaigns.

Exclusive prime discounts

In addition to the coupon codes and discounts, it is also possible to create exclusive discounts for prime customers. You can only use this promotion as a seller. A discount of at least 10% is regular and at certain events, such as BlackFriday, a discount of 20% is provided. The discount will appear on the product details page after the discount is set. However, to be eligible for exclusive prime discounts, your product must have at least 3 stars and be an FBA product.

Events (e.g. Amazon Prime Day)

Prime Day, which was launched in 2015, is a shopping event where only Prime customers can benefit from special offers. Amazon only announces exactly when Prime Day will take place shortly before, but the date is usually in July. After over 100 million products were sold on this day in 2018, Prime Day has become one of the biggest shopping events.

This fee-based campaign is also carried out via lightning offers. In this case, the products for the campaign must be submitted to Amazon in advance, before they are then offered at a special price for Prime members on the day of the campaign. While this campaign was free of charge until 2017, a fee is now charged per lightning offer. If both the advertising budget and the product fit for the Prime Day, you have the opportunity to participate in one of the shopping events of the year, which breaks its sales records every year.

Summary pricing measures

In addition to Amazon Advertising, Amazon Promotions also offers you various possibilities, both as a vendor and as a seller, which you can use specifically as additional sales instruments.

Since not all sales instruments for sellers and vendors overlap, the following tables provide you with a brief overview of all important information on the respective pricing measure.

Pricing measures Amazon Seller
Figure 16: Overview pricing measures – sellers
Pricing measures Amazon Vendors
Figure 17: Overview pricing measures - vendors

Amazon Brand Stores

Amazon Brand Stores
Figure 18: Example of an Amazon Brand Store
.

With the free tool Amazon Brand Store you can design your own store on Amazon as a vendor or seller with elements predefined by Amazon. With a Brand Store you can advertise product categories, new products, specials and top sellers in a targeted manner. In addition, a Brand Store gives you the opportunity to present your brand better and thus create brand affinity. In order to use the Amazon Brand Store, sellers and vendors must complete the Amazon Brand Registration.

Even though elements are predefined by Amazon, the designs and templates can be very flexible and customized to present your products in the best possible way. For example, product widgets can be inserted and sliders, videos and text elements can be freely combined. Customers can reach your Amazon Brand Store by clicking on your brand above or below your product title.

Link to the Amazon Brand Store
Figure 19: Link to the Amazon Brand Store

In addition, customers can also access your Amazon Brand Store via Google, because your Amazon Brand Store is indexed and listed by Google.

Brand Store pages are also suitable as landing pages for sponsored brand ads and external advertising campaigns, from which you can link to your Amazon Brand Store.

Summary and recommendation

Amazon offers both sellers and vendors many ways to promote their products. This presents you with the challenge of choosing the right campaign for your products. Therefore, you should first and foremost think about your goal. What do you want to achieve with your campaign? Better visibility? Many sales in a short time?

  • Amazon Sponsored Products and Amazon Sponsored Brands help you achieve better visibility. Your products will be displayed on both the search results pages and product detail pages.

  • Amazon Sponsored Display offers you the possibility to easily create campaigns that reach target groups on and outside Amazon.

  • Other promotions on Amazon, such as coupons, help you reduce prices of selected products and thus increase the conversion rate.

The above mentioned instruments can also be combined. It is important that you develop the strategy that suits you best. Amazon also regularly comes up with new instruments. So stay on the ball!

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Just register for a 14-day free trial and we will show you how our Amazon Seller Tool and Amazon Vendor Tool can help you monitor your marketing activities on a daily basis. Start your free trial now
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