My second interview with the paid search management agency with a specialist focus in retail: CPC Strategy. I have quite an in depth discussion with their CEO and Co-Founder, Rick Backus about Amazon Product Advertising and why it must not be ignored as a paid customer acquisition channel.
We cover pretty much everything retailers need to know about Amazon advertising today.
This is to core difference between both Ad formats available to advertisers on Amazon
Ads that drive a user off Amazon to Product page on a retailer’s website (like Google Shopping)
Ad units that drive the user on Amazon to an Amazon product page)
Ad and content options available product manufacturers that sell their products directly to Amazon are:
(01:03) Introduction of Rick Backus
(07:10) Difference between Amazon product ads and Amazon sponsored ads
(11:00) What an Amazon product ad looks like
(14:59) Text ads
(15:51) Different types of ads
(17:42) Collecting consumer information through product ads
(21:04) Checkout by Amazon
(22:31) Management of a product ads
(24:30) Third party management tools
(25:25) Core metrics
(25:53) Sponsored ad and the buy box
(27:37) Campaigns and Keywords
(38:42) Tips & Keyword data
(44:00) Data scraping
If you know what product you want, then Amazon does an amazing job at just delivering you that product at a reasonable price
So the key metrics are just for you to look at clicks on a per product basis, look at revenue on a per product basis and then adjust relative to your cost of sale goal.
I think we’ve put out the best information about Amazon sponsored products and the fact that we just started learning about sponsored products about a year ago…is an indictment about people who know stuff about Amazon and do not share it
Audio Length: 47 minutes and 57 seconds
Kunle: This is my second interview with a member of the CPC Strategy Team; the page search management agency with a specialist focus in Retail. This time we talk about Amazon product advertising and why it must not be ignored in ecommerce pay cost (unclear 00:18:9) campaigns. We would pretty much cover everything retailers need to know about Amazon advertising today. Do stay tuned and be prepared to take a load of notes.
(Voiceover) Welcome to the 2x e-commerce podcast show where we interview founders of fast growing seven and eight figure e-commerce businesses and e-commerce experts. They’ll tell their stories, share how they 2x’d their businesses and inspire you to take action in your own online retail business today. And now, here he is, the man in the mix, Kunle Campbell.
Kunle: Hello 2x’ers; welcome to the 2x e-commerce podcast show. I’m your host Kunle Campbell and this is the podcast where I interview e-commerce entrepreneurs and online retail marketing experts who help uncover new ecommerce marketing tactics and strategies to help you. My fellow 2x’ers grow metrics. Metrics in your online stores such as conversions, average order value, traffic, repeat customers and ultimately sales. You are in good hands here! Today I have with me again, CPC strategy; they’re a retail focused, paid search agency with specialist expertise in Google shopping, AdWords, Bing ads, Amazon advertising, product feeds, based advertising on comparison shopping engines and they’re well respected in retail in the states; in the world with clients such as (unclear 01:49:4), clacks and pay less. They agreed to take part in a three part series on paid acquisition and today’s episode is all around Amazon product advertising. I have with me Rick Backus; he’s the CEO and co-founder of CPC Strategy; he has spent his entire professional life in the world of online retail; initially with price comparison engine Pricegrabber.com before co-founding CPC Strategy in 2007. Rick is a regular speaker at conferences such as IRCE, SES, Mivacon and search love and is a columnist in publications such as search engine land, internet retailer, he’s contributed to Mixergy and media post; without further ado I’d like to welcome Rick to the show. Welcome to the show Rick.
Rick: Thank you very much; I’m happy to be here Kunle.
Kunle: Fantastic, good stuff. Could you take a minute or two to let the audience know more about you and CPC Strategy please?
Rick: Yeah I think you did an excellent introduction on both me and CPC Strategy; I founded the company eight years ago. We are in an agency primarily focused on Google; we’ve been spending a lot of time in the last year trying to figure out Amazon, how to help our clients and retailers to grow their sales on Amazon which is what I’m going to talk about today. We’re also very interested as an agency in Facebook and how to grow retail sales on Facebook because we see the direct response on Facebook for products increasing pretty rapidly and so on a very basic level the three channels that we’re trying to kind of own as an advertising agency are Google, Amazon and Facebook.
Kunle: On Facebook I’m actually registered for a webinar with you guys at some point next week. We’re recording this for those of you who listened on the fifth of June, but it might be delayed by a few more weeks. Before we go into Amazon; what’s your take on Facebook?
Rick: Our take on Facebook is that it currently isn’t driving volume in terms of direct response, that Google or Amazon can drive; it’s actually nowhere near those two channels but what’s really interesting to us about Facebook is that Amazon and Google are great at fulfilling demand meaning that you search for a keyword that indicates you’re ready to make a purchase on Google or Amazon and Amazon especially is the best in the world at just fulfilling that demand. If you know what product you want, then Amazon does an amazing job at just delivering you that product at a reasonable price and they ship it to you extremely fast and they’re going to be very hard to compete with for Facebook or Google at the very bottom of the funnel. What’s exciting about Facebook is that it has potential to introduce your products to people so that’s the challenge right; is fulfilling demand is relatively easy but creating demand is really challenging and that’s something that Amazon has struggled with; Google doesn’t know, Google’s not exactly built to create demand either and so Facebook knows more about us as consumers than really either of those channels’ they know what we like, they know what our friends like, they know what we do, and so in theory if retailers can figure out the right time to promote their products on Facebook and to get them in front of new audiences it can actually create demand and so in theory you can use Amazon at the bottom of the funnel to fulfil demand, you can use Facebook at the top of the funnel to create demand and then Google is somewhere in between essentially those two channels but that’s what’s exciting to us about Facebook.
Kunle: Fantastic, so I guess it would be down to getting attribution modelling right so retailers are able to see the fact that this is a team, you know you’re being; someone’s starting out, the (unclear 05:46:6) and you know they’re passing the client or the ball you know to the (unclear 05:51:7) to actually you know score pretty much so Facebook is right at the start and then he passes them through to Google or Amazon.
Rick: Yeah I like the sports’analities, yeah that’s a really good way to put it. Amazon is your forwards, Facebook can be your defence and Googles your midfielders.
Kunle: Fantastic, good stuff. I was actually going to make episode three, the three part series of this to be shopping comparison engines but I think Facebook advertising might be a better pick for third but we’ll talk about it after anyway.
Rick: Yeah I would agree with that from not only today, but moving forward; Facebook as a channel I think has a lot more potential whereas the comparison shopping engines; their models are pretty much just arbitrage that is slowly dying and so there’s a lot of retailers that still participate on comparison shopping engines but moving forward; Facebook is much more likely to be a real source of revenue that grows.
Kunle: Mm very fickle. Ok; right ok let’s jump into Amazon product advertising. Let’s start off with major clarification from what I gathered from a blog post of yours there’s Amazon product ads and there’s Amazon sponsored product; could you please tell us what the key differences are?
Rick: Yeah it’s a pretty huge difference; I think that the confusion comes just from the name sounding so similar but Amazon product ads are the ads that drive a user off of Amazon directly to a product or page on the retailers website and so Amazon product ads work very similarly to Google shopping or PriceGrabber or any traditional comparison shopping engine whereas Amazon sponsored products are the advertising units that drive the user on Amazon to an Amazon detail page of the product so product ads are for external websites; sponsored products are for marketplace listings.
Kunle: Got you so they’re like featured; the sponsored ads are almost like enhanced to increase your visibility within AdWords, sorry within Amazon and product ads will pretty much adverts that would take you out of Amazon.
Rick: Yep you got it.
Kunle: Ok right good stuff. Where should retailers get a bigger bank for their box? Sponsored products or product ads?
Rick: So it’s a very loaded question in terms of the fact that there are dramatic differences right so sponsored products is the lever that you use to grow your own Amazon sales; Amazon product ads is a lever that you can use to grow your off Amazon sales and so we have you know, out of our two hundred and fifty plus clients they all have standalone e-commerce websites and we’ve been managing the product ads programme for well three plus years now and we would use that as a source of traffic to go back to our retailer site but for the most part our retailers are relatively mature e-commerce sites; they have a really built up site, they have email marketing setup, they have their own sales funnel like really built out and they’re relatively sophisticated and so in that scenario product ads can be another external source of quality traffic the same way that Google shopping or PriceGrabber could be; sponsored products are relatively new and they are used to grow your Amazon specific sales and so it really just depends on what your business strategy is. IF you’re trying to drive more volume through your e-commerce store then product ads is the better option. IF you’re trying to drive more volume through your Amazon store then sponsored products is the better option.
Kunle: Ok how do products ads actually compare to go shopping (unclear 09:40:9) given all the data can you see from two hundred and fifty clients?
Rick: They don’t convert as well as Google shopping, realistically for Google shopping for external traffic being driven to your website is the best converting source that we’ve found at scale meaning you can get, you know, two or three orders from a random blog but to actually scale out your traffic Google shopping is the best converting source. Product ads in our experience for conversion rates are about fifty percent of what you would see from Google shopping and so if you’re converting four percent on Google shopping, Amazon product ads will be more likely closer to like two percent; which is in line with the conversion rate that you’ll see from a lot of the shopping engines like the PriceGrabber or a Next tag or shopping.com. Products ads converts a little bit better than those other channels but not nearly as well as Google shopping.
Kunle: And I guess they’re in buy mode in Amazon, no one’s hanging on Amazon to have a conversation with their friends; that just gives that extra boost compared to other platforms. Ok let’s delve deeper into Amazon product ads. What are the fundamentals? Could you breakdown what an Amazon product ad looks like? Is it driven by a product feed or is it driven by keywords?
Rick: Yeah its driven by both so the product feed has the keywords that Amazon is going to use to display your products and the way that it works it’s always been a little bit of a confusing experience for users; I think that users are actually really surprised when they click through a product ad and go to another website. There is a link that Amazon says available external websites and so if you read that and you process that information you would know that you’re about to leave Amazon but most people, everything else that you click on on Amazon takes you to another Amazon page and keeps you within that experience.
Product ads has always been a little bit of a weird experience in terms of the product ads look the same as the customers who buy this also bought this ads and so it looks very similar to other functionality for cross promotions on Amazon but you click through and you go to another website and so fundamentally it performs very similar to Google shopping in terms of you send Amazon a feed, you upload the feed, you can bid on a per product basis but the challenge is from a user experienced point, it still is kind of weird when users click through and they go to another website and not really expecting it and often times they will just go right back to Amazon.
Kunle: Oh so I was going to ask you a question about the format because right from my head I was actually thinking that the ads were; you know when you scroll the bottom of an Amazon product page sometimes you see some text adverts there that are powered by Amazon but product ads your saying they’re actual images with the title, some description and then you click through with the tag saying you’re going to be taken to an external site so has Amazon enhanced its inventory of what it can offer advertisers, are products that are relatively new to Amazon and are there to clear format?
Rick: No, so they’ve been around for four plus years. I should know the exact date but they’ve been around for a while and from Amazons perspective they want to have coverage of every product that exists right like that’s their goal and so product ads are a means to an end meaning that they’ll make product ads available and they’re using product ads as backfill in categories where they don’t have a lot of coverage and so product ads are; they’re available to almost every category but the exposure of your product ads is very dependent on how much coverage Amazon already has on a particular SKU of a particular category and so Amazon doesn’t really want to drive people off of their site to external websites but if you’re doing a search on Amazon for a product that’s not currently being sold by Amazon it’s a better user experience to at least have that product in the Amazon catalogue; have you click through, charge the advertiser for that click and then train the user that even if the product is not available on Amazon, we’ll be able to find somewhere else on the internet where you can purchase the product therefore you should still start your search on Amazon.
Kunle: Absolutely which is direct competition to Google really when you think about it; I actually interviewed Nir Eyal; the author of Hooked yesterday on how to build habit forming products and he was talking about the fact that the only reference to e-commerce in his book was Amazon and it was exactly what you just said. They put it there to get people to come back and back again and it’s a retention tool and it’s a win win retention tool. They get more customers to come back again and then they make money off of the fact that when you click on the adverts you, you know your taken to another site; it’s quite clever of them.
So what about the text ads at the bottom of product pages; are they part of the product ad inventory or do you buy them separately through another sort of package?
Rick: No so the text ads they’re part of what’s called Amazon marketing services which are advertising units that are available to vendors and so those text ads will drive you to a vendor page on Amazon and to be honest the different advertising units on Amazon are very confusing and I can go through each of the individual advertising types but often times it just becomes more and more confusing so the text ads are not available as product ads. Product ads are just that; they are just images of products that drive to external websites but text ads are only available to vendors to drive traffic to their vendor page.
Kunle: Ok; then so we have text ads, we have product ads and then we have sponsored ads, sponsored advertising. Are there any other ads we should know about?
Rick: Yeah; so AMS in available to vendors; what a vendor is; is just a product manufacturer that sells their products directly to Amazon and so Amazon has to or they choose to try to entice manufacturers to sell directly to them as opposed to the manufacturers selling as a third party seller and so there are advertising options and content options available to vendors that aren’t available to third party sellers and so those include those text ads, they also have banner ads that are available to vendors, they have what’s called e-commerce ads which are basically product ads under the buy box; and so the buy box will be to the right of the product where it says buy now and underneath the buy box there’s e-commerce ads which are only available to vendors which work very similarly to sponsored products but they’re only available to vendors. There’s also a plus content which is only available to vendors which means that your; essentially Amazon allows you to use html on your landing pages and just create a more beautiful landing page and so whenever you see a landing page that seems like its unique relative to the rest of the offers that almost always a plus content.
They also have a vine programme which is available to submit your products to get reviews from Amazon reviewers who are like highly rated and have a long history of reviewing products on Amazon so a lot of the confusion is around what’s offered to vendors, for third parties, the main form of advertising is sponsored products and usually when people say Amazon PPC that’s what they’re talking about.
Kunle: Ok, ok thanks for clarifying. How can retailers collect consumer information from checkout through product ads?
Rick: So product ads, Amazon product ads will drive the consumer back to your website so if they check out through your cart you get all of the information; sponsored products are the ads that drive people to Amazon in that case for any seller on Amazon you don’t get the customers email, you do get their phone number and so that’s one of the big downsides to selling on Amazon is that you’re not able to retarget that customer; the only email communication goes through Amazon and it’s an email that doesn’t show you the name of the person that purchased from you and so essentially your communication is limited to just did you receive my product? Are you happy with my product? And that’s it.
Kunle: Have any of your clients used the Amazon buy box on their landing pages when they connect to say their Amazon product ads just to see if there were any conversions or any better conversions off the back of it?
Rick: So no, not that I have direct experience with but it is something that we want to test; not in the way that your describing it, in the way that your describing it I think it wouldn’t work out that way; what I mean by that is: if the users on Amazon and there is a marketplace page, there’s an Amazon offering for your product, Amazon is not going to show the product ad for that same product cause its already on Amazon and so essentially if you were to use Amazon product ads the user would start their search on Amazon, they would click on a product ad, they would go back to your website and then on your website they would have a buy on Amazon button which would send them back to Amazon and it would be a weird experience but for Google shopping I have not seen a lot of retailers doing that at all where you have your add to cart button and you have the buy on Amazon button; you’re not allowed to promote Amazon products through Google shopping but you are allowed to have a buy now next to your add to cart button and so for a lot of users I would say the majority of users; if they had the option of checking out on Amazon that may lift your conversion rate enough for that Google shopping traffic to actually justify the fifteen percent fee that you’re going to have to pay to Amazon and what I mean by that is if your normal conversion rate on your e-commerce site is one percent and you add the buy on Amazon button and that lifts your total conversions up to three percent you can justify the hit that your taking on your margin because now your conversion rate tripled cause you offered that option.
Another big factor there is mobile. A lot of our clients they just turn off the mobile traffic for advertising because their site just doesn’t convert on mobile. IF you were to give your customers the option to click through from a Google shopping page to go to your site and they had the option to buy on Amazon, first of all the Amazon mobile experience is excellent and most customers already have all of their credit card information stored on Amazon so it makes that Amazon checkout very seamless and there’s very low friction with an Amazon mobile checkout and so that’s something that I haven’t seen a lot of retailers testing with and we’re actively in talks with a couplet of our clients to see if that would work.
Kunle: Ok, I think what I meant was, I think that Amazon has realised almost like a PayPal service where the products don’t necessarily need to be on Amazon but you could checkout with your Amazon account.
Rick: Yeah that’s checkout by Amazon.
Kunle: Yeah so what I was thinking was if you can correct me if I’m wrong here, if I had my product ad on Amazon and then took the search or the customer to my site and instead of just seeing a normal ad (unclear 21:17:7) they just see a buy with your Amazon account spot on there; do you think it will help or?
Rick: Yes and the clients that have implemented checkout by Amazon.
Kunle: Ahh checkout by Amazon.
Rick: Yeah that’s what it’s called. The clients who have implemented it, it has become a larger source for the percentage of their checkouts than they were anticipating and so I actually think that that’s not only a good idea for product ads but that’s probably a good idea for all of your traffic sources because even if the customers not coming from Amazon the likelihood that they have their credit card information stored on the Amazon is very high and so if you have a PayPal option or an add to cart option; if you were to only select one other option that wasn’t directly just adding to your cart and paying through your payment processer then checkout by Amazon is a really good idea but I do know a lot of developers have run into issues with the integration of checkout by Amazon; it’s not as easy as adding PayPal which is a pretty simple process for sellers but yeah I think it’s a good idea not only for product ads but just in general for other traffic sources who would like to check out that way. It’s relatively easy to test.
Kunle: Ok what is the management; the day to day management of a product ad, an Amazon product ad look like to you; do you bid on a daily basis, do you look at performance metrics such as CTR, like with your AdWords campaign or is it more or less an automatic plug and play thing?
Rick: So it depends on the size of your catalogue. They way that most retailers approach it is that it’s pretty automatic meaning that if they’re spending under five hundred dollars a month and they don’t have a huge product catalogue, product ads isn’t going to be this crazy huge source of traffic for you, you know maybe ten to twenty percent of what you’re doing on Google shopping and the way that you manage it is that the same way that you would manage any other product catalogue; you’ll be able to track ROI, return on investment, you see the revenue on a per product basis and you would just, your bids based on your goal cost of sale.
And so that’s how we approach it; if it’s a larger campaign it requires us to make daily bid adjustments; for most retailers who don’t have a huge catalogue it is more of a you know send your feed, check back once a week to see what products are doing well, adjust your bids manually and it doesn’t have to be a huge time slog for you.
Kunle: Ok, ok and I believe its limited to specific number of categories than Amazon is; is that correct?
Rick: That is correct, they are just I think re-introducing product ads for apparel but it hasn’t been available apparel, electronics. Basically whenever there’s a lot of product coverage on Amazon, they don’t need the product ads anymore. Like I said; Amazon product ads is not a flagship product for Amazon; it’s a means to an end and the end role is coverage and so once they have full category coverage they’ll just close down the category for product ads.
Kunle: Wow, so (unclear 24:21:0) as an advertising and formatting on Amazon if they keep on their expansion plans as scheduled. Ok are there any third party management tools that you guys use or that you’d recommend out there to manage your product ads or do you think what Amazon provides is sufficient enough.
Rick: What Amazon provides is sufficient. If you know how to upload a product data feed and you are tracking the revenue; once our clients are tracking revenue through Google analytics and so they’ll (unclear24:55) skip the revenue data on Google analytics to make adjustments to the bids on Amazon product ads. It’s not necessary to have a third party tool just to manage an Amazon product ads feed and we don’t use a third party tool we use our in house platform but I mean there’s a ton of retailers that don’t use any specific technology and they just send the feed to Amazon, they track in Google analytics and they make the adjustments accordingly.
Kunle: Ok just to wrap up on Amazon product ads, what core metrics should our listeners keep an eye on when they managing their Amazon product ads?
Rick: you just want to have an idea of what your cost of sale goal is going into it and then you want to associate the revenue on a per product basis and adjust bids accordingly and so the key metrics are just for you to look at clicks on a per product basis, look at revenue on a per product basis and then adjust relative to your cost of sale goal.
Kunle: Ok sounds good, sounds good. Ok let’s move swiftly into Amazon sponsored products; there are more or less enhanced product listings within Amazon. Would using a sponsored ad help you win the buy box?
Rick: No. Well not directly so you win the buy box based on a ton of variables but mostly your price and your fulfilment method but sponsored products don’t display unless you’re in the buy box. What I mean by that is that there’s ten of us and we’re all selling on Amazon for the reason and we all have the same price, the buy box will rotate and it will essentially give us each ten percent of the buy box throughout the day.
Sponsored products; if I’m bidding on sponsored products, Amazon will only display my sponsored products during the ten percent of the time when I’m in the buy box and so there’s no risk of you using Amazon sponsored products and buying traffic that is then going to your product page when you’re not in the buy box.
Kunle: Right so you should; win the buy box first and then use a sponsored product ad.
Rick: So your actually not eligible for sponsored products or products were you don’t have some buy box ownership so yes you should win the buy box first but even if your rotating the buy box and you’re not in the buy box one hundred percent of the time; you can still use sponsored products and they’ll only display when your actively in the buy box.
Kunle: And what does bidding look like based on the products you actually have so do you log into your account and say ok check check these products; I want to feature them on Amazon or how do you see it working?
Rick: Yeah so you essentially; there’s two different types of campaigns; there’s automatic campaigns and there’s manual campaigns and you set up your bidding on the per product level. What most advertisers do with sponsored products is they’ll set up an automatic campaign which essentially is like broad match on Google where your letting Amazon use the keywords that are in your title and your search terms and your bullet points and your description. Your letting them use those keywords to help figure out what sponsored products they should display your product for and so it’s on a per product basis if you’re doing an automatic campaign you just set a maximum bid for you to get into the auction and then you’ll start to, then Amazon will show you the keywords that your bidding on. If you set up a manual campaign then you have to associate the product with the individual keyword that you want to bid on and then set a keyword bid level and so yeah it depends on the format that you’re using.
Kunle: Interesting. So does Amazon provide anything like the Google keyword tool that gives you keyword intelligence basically so you know what keywords to target?
Rick: Yes; there’s a couple of different tools we actually still use the Google keyword tool to inform a lot of our initial decisions but the beauty of sponsored products and why a lot of Amazon sellers use it; even if sponsored products are not like profitable for you, it’s a great source of keyword information because when you set up those automatic campaigns, Amazon is giving you the exact searches that are displaying for your products and so that’s really powerful, is something that Amazon just completely captured that information form the public, they never shared it with anyone and usually this is similar to Google, usually advertising is the incentive to get that keyword data and so sponsored products are doing exactly that so initially you have to guess but if you set up an automatic campaign and you let it run, you’ll start to see the keywords that are being associated with your product and you can actually adjust your strategy from that point forward to maybe reflect some of those keywords in your content or go more aggressively towards a few keywords that you think your competitors aren’t really aware of and so yeah that information will usually use the Google keyword tool during the initial phase before we launch sponsored products to inform our initial keyword strategy but once we start using the automatic campaigns you can use the actual Amazon data to inform your strategy.
Kunle: That’s clever, very very clever. Ok are customers seeing success with this ad format from a conversion stand point cause you still need to pay that in a fifteen thirty percent, whatever Amazon want you know you to pay with regards to their fees and then you’d still need to pay per click to your adverts using the sponsored product ads so advertisers seen returns you know actual return on investment or are they just breaking even; is it an expensive platform to actually advertise now; is it saturated? IS there lots of competition?
Rick: So, there’s a lot of different questions in there; I think it depends on who you ask. From our perspective, coming from the Google AdWords auction world Amazon sponsored products convert extremely well and they have very low CDCs and it is an extremely immature blanket. If you were to talk to sellers who have been selling on Amazon and using sponsored products for the last year they would say sponsored products are way more expensive now, competition is through the roof and it’s so much more physical than it used to be and so it really just depends on the perspective of the seller or the agency and their relative experience.
I will say though that for most retailers, sponsored products are performing very well, meaning that they are giving around a ten percent of sales so for every one hundred that there investing, they’re giving back a thousand in return but your right, you definitely have to factor in your fifteen percent to Amazon if your using fpa that usually push your total percentage up to like twenty two percent and so even if you’re getting ten percent costs of sale on sponsored products you’re essentially paying thirty two percent.
Kunle: I mean the categories like jewellery that thirty forty percent on Amazon.
Rick: Yeah and so the real reason that sponsored products are getting so much attraction is because it gives your product exposure right, and so the Amazon flywheel, the way it works is, once you start to get sales and you start to get reviews and you start rank organically for keywords your able to maintain that organic ranking as long as you have a product that’s getting positive reviews and that the effective conversion rate is high and so it creates this problem for new product or for sellers who aren’t getting exposure; they simply can’t keep up with the conversion rates of their competitors or they’re not getting enough reviews on their products cause they’re not ranking organically and so if you can figure out how to increase your review count and you can increase your sale count then you can rank organically and then the problem is for your competitors to try to keep up with you and so sponsored products are a way to start to build the momentum in terms of both sales and reviews and the goal is to rank organically for your key terms and that’s when you make your profitable sales. So that’s the real reason why if sponsored products didn’t lead to any organic boost; sellers would probably not invest very much into it but it’s actually one of the few levers that exist to get your products initial exposure and it’s kind of like throwing your product in the air and you hope that once it’s in the air, there’s enough conversion rate that it can float on its own but you need that initial momentum because if you’re not getting sales and you’re not getting reviews there is no way for your product to grow an organic ranking.
Kunle: That’s amazing insight Rick; because I can imagine if Google was like that where you’re putting money into the shopping ads and then you eventually write organically based on feedback but that’s not the case. Right well Amazon is doing something right there.
Ok what about reporting. What does reporting look like? What kind of metrics do you look at on a regular basis and does Amazon provide sufficient reports or do you have to use third party tools to view reports and you know; get the real juice from a metric stand point form your campaigns?
Rick: So you actually have to use Amazons reporting because the checkout is on Amazon and so they are the source of the revenue so obviously you can’t put a tracking pixel of anything on your Amazon landing page cause you can’t alter the source code on Amazon but yeah for sponsored products you’ll see your bid on the keyword level, you’ll see the keywords, you’ll see the return by keyword and so there is sufficient data within seller central to manage your sponsored products campaigns.
What typically happens; or the bigger challenge form a reporting stand point is your repeat orders from your manufacturers and so what I mean by that is if Amazon sponsor products leads to higher demand for your products that in turn leads to you having to reorder faster from your supplier and if you don’t do that and you don’t keep your inventory at a level that’s consistent you will lose your organic rankings because your product dropped off of the marketplace and that kind of defeats the purpose for the whole activity and so the point is that reporting is sufficient for Amazon sponsored products but you need to pay very close attention to your inventory levels and make sure that you don’t run out of stock because if you do it’s kind of like starting all over from scratch.
Kunle: So my takeaway from this part of the segment of our conversation really is if your new to Amazon start off with sponsored ads, sponsored products ads and then build momentum, make sure you check your inventory and then once you start to get reviews and you start to get sales through you will eventually settle in organically and you have more buy box control. You turn up on the (unclear 36:07:4) and on the resorts you know more often and that’s sort of stabilities your business in Amazon but watch your inventory all the time.
Rick: Yeah that’s the number one problem that Amazon sellers run into who are growing is that they run out of inventory and the Amazon algorithm; it’s like a flywheel and Amazon even; they talk about flywheel a lot but that works both way and so you can rapidly lose ranking if you run out of inventory and it makes it very difficult to get back up to that organic spot that you had before.
One interesting point though that you kind of eluded to in the previous question is you know sponsored products are great for products that are new but once you gain organic rankings we get that caution a lot like ok I’m ranking organically, I accomplish my goal, I’m getting sales, I’m getting review, I don’t need PPC anymore and in that instance, sometimes it still makes sense to invest in Amazon sponsored products just as more of a defensive measure and so what I mean by that is; if your ranking for your top keyword there might be enough volume for that keyword that it’s still worth it for you to pay five hundred dollars or a thousand dollars a month just to defend that position because if you turn off the sponsored products for that keyword it leaves you vulnerable for a competitor to start to increase their sales volume and their review volume and their effective conversion rate on that keyword and Amazon is just going to display the product with the keyword that converting the highest within that time period and so it’s really; when you think about that whole system and what I described, it’s absolutely beautiful for Amazon because he who, you pay to get your products exposure but then you also kind of need the pay to keep that spot and so it’s a tax on organic traffic but yeah like you said if that world existed in Google, people would pay a lot more money on Google shopping, a lot more money on text ads if that actually influenced their organic traffic and for Amazon it does and so in our experience, most of the time that a product goes from not ranking organically to ranking organically well, the seller wants to keep on PPC as more of a defensive move but its relative to the amount of sales that they’re doing organically. They feel like it’s worth it to pay that, yeah it’s a good way to put; its PPC tax.
Kunle: Right ok, we’ve talked about product ads and sponsored ads and we’ve briefly talked about the vendor I think was EMS you said; is there any other thing you; just before we wrap this up, any other tips or any other thing we should be aware of with regards to Amazon, the world of Amazon and advertising in Amazon particularly, obviously to retail?
Rick: Yeah so; specific to advertising there is not a lot of good information out there and it’s weird to us. We come from a Google world where if you want to learn about ranking organically on Google or if you want to learn about Google PPC; you literally can get an MBE on Google in three months and learn everything that you need to know and essentially master the art and science of Google right.
On Amazon that world just doesn’t exist; like that information is just not out there and so there’s sellers that know how to do this stuff really well and they make a lot of money and they don’t share that information with anyone. There aren’t really agencies that are helping sellers on Amazon so a lot of that content will often tend to come from agencies. There are a few technology tools but the technology market is still relatively immature, relative to Google and so you’ll here a lot of; the more that we get involved in the Amazon world you’ll hear a lot of sellers and just everyone involved and calling it like a gold rush. There just isn’t a lot of competition right now relative to Google, it’s that algorithm is so much more basic than Google algorithm. It’s actually ripe for manipulation which is something that Amazon needs to figure out in the long run but specific to advertising I’ll be honest; I think we put out the best information about Amazon sponsored products and the fact that we just started learning about sponsored products about a year ago and we are the best source for that information; I give us credit to be in that position but I also think it’s kind of an indictment of the fact that there’s people that know stuff about Amazon just don’t share it.
There’s not a sharing community that sharing happens in private, in mastermind groups, in workshops, but it’s not you know through inbound marketing and through content marketing and so advertising wise there’s not a lot of great resources.
We put out a guide on sponsored products that I think is better than anything else that’s out there; in terms of other tools there’s a lot of technology that we recommend for feedback to increase your feedback percentage there a tool called feedback genius from seller labs; to track your organic ranking there’s a tool called AMZ tracker which is awesome to see the impact of you know when you’re buying PPC and you want to rank higher for certain keywords; Amazon doesn’t have those reports and so a tool like AMZ tracker or there’s another one called AMZ shark. There great for keyword level tracking for larger FPA sellers that are doing over one hundred thousand a month in FPA there’s a technology called Tika Metrics which helps essentially to treat your products like commodities and essentially FPA kind of is like commodities trading and so Tika metrics is probably the most advanced tool that I’ve seen when it comes to reordering, figuring out when to liquidate your stock, determining the turn ration of your inventory on Amazon and so for large Amazon sellers all that stuff gets really complicated and Teikametrics is a solid tool.
Also for taxes, anyone that I’ve seen use Tax Jar which I think is like ten dollars a month to deal with all the tax related issues on Amazon loves it and so yeah those are a few just like technology recommendations.
Kunle: Well that’s amazing I’m going to link every one of them on here. I just wanted to ask if you don’t buy ads through sponsored products does that mean you don’t have any keyword data from Amazon. Do you have to pay to get the keyword data from a sponsored ads in Amazon?
Rick: Pretty much, yes but a lot of sellers are private labelling and they actually don’t have a huge number of keywords that they’re targeting and so a lot of research to be honest is done just on Amazon and just keyword search on Amazon, you see the other sellers, you see the other review they have, you see their price point and you try to figure out if you could, if your products could rank higher than their product and its really as basic as that. It gets more difficult when your number of SKU’s goes up dramatically but yeah they keyword data if you want the accurate keyword data it will come from sponsored products. Outside of that your best bet is just doing the search engine on Amazon on your own.
Kunle: Mm mm, so Amazon typically shows the top one hundred in a category, are there any (unclear 43:31:7) to sort of get the longer tail that will reveal the top one thousand or top ten thousand within a category?
Rick: Yeah there’s a lot of scraping tools that essentially can do whatever you want and so pretty much all these Amazon technologies are not integrated with the Amazon API; the Amazon API is very difficult to work with and doesn’t have all the data sources and so all the technology tools are using scraping technology and that sort of information is available through scraping and so if you know any developers that have scraping experience or there’s chrome extensions where you can use to scrape; and so as long as you know the information that you want; its available it’s just a matter of the dead resources to do it but to that specific question; yeah it wouldn’t be that hard to set up a simple scraper to go and set a top one hundred or top one thousand.
Kunle: Ok going back to resources and CPC strategy; what are your top white papers or blog posts you would suggest listeners tap into or go to on CPC strategy.com
Rick: Yeah so the top resources that relate to this particular podcast are essentially there’s two different sides of Amazon; there’s buy ability and discoverability and buy ability is trying to win the buy box, is trying to increase your conversion rate on Amazon, discoverability is how to get more exposure to your products at Amazon and so the levers that impact your discoverability and buy ability sometimes overlap but often times they are different and so the guides are if you have one hundred percent buy box then you want to read the discoverability guide. If you’re not winning the buy box you want to read the buy ability guide but those are the two guides that I highly recommend and then we actually have an entire guide dedicated just to sponsored products which is obviously relevant to this podcast and so I would say those are the three white papers that your readers if they want more information should check out; the Amazon buy ability guide, our Amazon discoverability guide and our Amazon sponsored products guide.
Kunle: Ok I’m on your website now and I’m under learn and it should be under resources; learn, resources and I’m just scrolling down here and I can see research reports, shopping comparison, (unclear 45:47:5), Amazon, ok I’ve found it, product buy ability, it’s a white paper. Awesome good stuff, ok so guys just go to cpcstrategy.com/learn and you will find it.
Fantastic, before you go what’s the best way listeners can get in touch with you and the agency?
Rick: Yeah if there’s any questions they can just ask me direct, my email is Rick@cpcstrategy.com and any Amazon related questions or Google or Facebook; if I don’t have the answers; someone at CPC strategy probably will and we; do our best to try to help you out.
Kunle: Fantastic, it’s been an absolute pleasure having you on the show Rick, thank you for sharing your insights on Amazon product advertising and Amazon advertising. It’s been Amazing.
Rick: Well thank you very much, it was a pleasure being on the show.
Kunle: Cheers, bye.
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