Why Amazon Advertising Is a ‘Must Have’ In your Commerce Media Mix
by Alyssa Holland

Apr 12, 2021

You have your product listings loaded in your Amazon marketplace. Now what? Getting a Sponsored Ad campaign up and running is the best way for brands to become discovered while generating an influx in sales. 65% of the U.S. population visits this e-commerce site at least once a month, reinforcing the critical need to create a robust keyword strategy with competitive bidding, to stay relevant. Amazon produces said sponsored ads to feel natural, in conjunction with organic listings, across search results and product detail pages when in reality, they are the first listings that a shopper sees when they complete a search– which can be difficult to achieve organically. 

Performance results speak for themselves.

We consistently see these ads blow performance out of the water with an impressive return on ad spend. Amazon shoppers are in the lowest part of the purchase funnel — they know what they want, they’re just looking for the seller with the perfect deal– and sponsoring your products helps them stand out. We have seen campaigns generate a ROAS of 9.3x by promoting client’s products across this platform. We’ve also experienced inventory sellout by launching a Sponsored Ads campaign while the client continues to increase their supply for Amazon. 

Amazon has two key performance metrics to measure when running a Sponsored Ad campaign: ROAS and ACoS (advertiser’s cost of sale). ACoS is a metric unique to Amazon that analyzes how efficiently the ads are performing. Optimizing this to stay on the lower side to ensure profitability is essential. We have found that executing a creative targeting strategy leveraging a combination of targeted keywords, products, and specific categories all work together to increase overall performance by reaching the shopper at different touchpoints on Amazon, all while outshining the competition. 

One client that previously ran Sponsored Ads has seen an increase in their overall Amazon revenue by 19% year over year since Arm Candy started managing their campaigns. For another client, we have increased ROAS by 52% and decreased ACoS by 32% by introducing various campaign types and improving keyword strategy. Alongside an increase in performance, we have generated 83% more in sales month over month since managing their Sponsored Ads campaign. Every Amazon campaign that Arm Candy manages bates the same question – “how can we increase spend?” indicating excellent performance on both ends. 

Good news – the risk factor is low. 

The great thing about Amazon’s Sponsored Ads offering is that they are on a CPC model, meaning it provides total flexibility to scale up or down, guaranteeing profitability is maintained. Equally as beneficial, clients only pay when a shopper clicks on the ad. We’ve seen on average 15-20% conversion rate from campaigns that we’ve managed, which, to put in perspective, is higher than Google’s 8% average conversion rate for shopping campaigns. We have seen a single keyword generate a ROAS of 169.05x in a given campaign

If you have products, Amazon has buyers, and a well-strategized campaign will help capture qualified eyes. Promoting your products also helps increase overall organic rankings as their algorithms analyze two important overall metrics when determining how products are ranked: CTR and conversion rate. Since Amazon doesn’t evaluate these by how clicks and conversions are created, the more you’re able to gain from Sponsored Ads, the more relevant your brand becomes on the platform. By increasing orders (contingent on good products), comes the opportunity to create more verified reviews that will tremendously help sellers.