Amazon’s advertising not only helps stimulate marketplace sales, but also helps sellers start a virtuous cycle of revenue growth.
To some extent, the Amazon marketplace is driven by momentum. Unlike Google and Bing, Amazon is not interested in providing informative or entertaining search results; what Amazon wants to do is make sales.
Therefore, Amazon prefers products with high conversion rates on its search results pages. One way to increase product conversion rates and sales is to advertise on the platform. The higher the sales of a product, the greater the chance that the product will be included in organic search results, and a virtuous cycle begins.
(Amazon’s organic search results are good for querying related best-selling products. As shown in the figure, the first organic search result is “protein bars” with sales of 9,000.)
Market Search
“You can spend all your money on Google Ads, take the No. 1 position and get a ton of clicks, but it’s not going to impact your organic search ranking,” said Evan Facinger, Amazon’s director of paid advertising.
"Amazon is a closed ecosystem where search engines can influence product sales and sales velocity. Amazon wants to show actual products that sell well, so you can directly influence your organic ranking through advertising." It is understood that Evan Facinger will give a speech on Amazon advertising and organic search at the Pubcon conference this year.
Advertising and Amazon SEO can work together to increase sales.
(Buying ads on Amazon can increase sales of targeted products. When sales increase, those products move up the organic rankings. When products rank higher, sellers can reallocate advertising investments to other keyword phrases and other products, creating a virtuous cycle of revenue growth.)
New Products
The ad-search cycle is especially helpful for new products.
Let’s say your brand just launched a plant-based protein bar and you list it on Amazon’s marketplace. It might not show up at the top of search results for “protein bars,” but an ad promoting that product could be a driver of organic rankings.
This virtuous cycle then continues as good organic search performance can reduce advertising costs for some keyword phrases, allowing the saved advertising dollars to be invested in another set of keywords that can be used to sell other products of the company.
Advertising promotes sales
To be clear, Amazon Advertising not only drives search rankings on Amazon, it may also help sellers increase sales directly.
For small and medium-sized e-commerce businesses, Evan Facinger recommends starting with Amazon Sponsored Product ads, which appear alongside search results.
(Sponsored product ads look almost identical to organic search results. They’re identifiable only by a tiny “Sponsored” label.)
Sponsored product ads usually appear in the first row of search results, in the middle, or even at the bottom of the page.
Clear attribution
“Sponsored Product ads offer a pretty good, trackable ROI, which is a big thing for smaller brands,” said Evan Facinger. “You can understand real ad performance, clicks, and ACoS (cost to sales). You can measure how many sales those clicks led to. How much is each click costing you? You need to keep an eye on these numbers to make sure your ads are making money for you.”
This direct attribution could make it relatively easy to optimize Amazon advertising for sales.
For example, if your sponsored product ads are sending traffic to your product detail page but not converting, then you may want to improve your product page.
Maybe you need better content, which might mean you need better product descriptions or additional product specifications. Maybe your existing product images don’t do your product justice, and you may need to improve your photography.
Brands and Dealers
Your ability to control product detail pages depends on whether your company has its own branded products or sells products from other companies.
Traditional retailers need to work harder to optimize product detail pages than direct-to-consumer brands.
Another issue for resellers is the ability to purchase sponsored product ads. Your company must be awarded the “buy box” for a given product, which means you need to effectively become the default seller for the product.
So you can start a virtuous cycle, if you will, with promoted product ads, which will bring you better organic rankings and potentially advertising investment for other keywords and products.
