As an Amazon 3rd party seller, you probably have strong feelings about the Amazon PPC Advertising model. Navigating Keywords, Campaigns and Clicks has become a feature of any long-term Amazon seller’s skill set.
Keeping on top of different advertising options, new features, and the latest PPC trends is almost a full-time job. Today we’re going to make it a little bit easier for you by sharing some of our thoughts on the Top Amazon PPC Trends in 2021.
Trend 1: More Competition Across All Categories
Last year, 2020, saw the fastest e-commerce growth rate yet. Covid 19 convinced more and more buyers to stay home and shop with online retailers. Amazon’s ad revenue grew by over 30%, a reflection of the changing online shopping landscape.
This means there is alot more competition for Amazon sellers in 2021 on and off the platform. Buyers didn’t just flock to Amazon; Amazon sellers did as well. New sellers are seemingly desperate for a leg up and predictably turn to Amazon PPC advertising to stand out. As well, veteran sellers have had to increase their Amazon PPC ad spend to maintain their pre-Covid success.
Thankfully, due to the same online shopping renaissance, there is enough demand to go around, but as a seller, you have to be diligent in optimizing your Amazon PPC ad campaigns. This brings us to our second trend; Automation.
Trend 2: Automation, Programmatic Advertising, and Machine Learning
Manual campaigns can be a lot of work. There’s a steep learning curve for new sellers running their one Amazon PPC campaign, and once you’ve figured out the basics, there is still continuous optimization to be done. Keywords and phrases, negative keywords, need to be tested and modified constantly. It can be exhausting.
New Automation options, however, are constantly appearing this year. Amazon itself has made a push towards using programmatic advertising. This type of advertising optimizes the way your Amazon PPC ads appear to potential customers. The program segments the market and refocusses your Amazon PPC ads directly to the people who are most likely to click them. This is based not just on customer’s keyword searches but also on their shopping and buying habits.
As a result, your ads are even more targeted; this makes your Advertising Cost per Sale (ACoS) much lower and your campaign more efficient.
Another form of Automation that will make a massive difference for Sellers is Machine learning-based campaigns. Several companies are already using machine learning to optimize seller’s campaigns. These Amazon PPC campaigns are very successful and far less time-consuming for sellers, allowing sellers to focus their energies elsewhere.
Machine Learning refers to artificial intelligence that learns best practices and strategies while it runs campaigns. The more campaigns it runs, the more efficient and cost-effective it can be. As more and more of these types of A.I.’s enter the market, more sellers will have to use them to be successful.
Trend 3: Moving from PPC to PPI
Amazon is driving this final trend with its Sponsored Display program. Sponsored Display does a few things that the other Amazon Ads don’t. First, Sponsored Display isn’t limited to Amazon.com. Instead, sellers have access to potential customers on all Amazon affiliate sites. This includes IMDB, Twitch, and Fire TV, to name a few. This opens sellers up to massive new advertising markets. Amazon also uses its Programmatic Advertising technology across these platforms, ensuring your ads are seen by the right people.
A second difference with Sponsored Display is that its focus is on video advertising. You can also use images, but the video option was launched in Q3 of last year, and it has been growing rapidly ever since. A significant reason for this is that Gen Z has entered the online shopping market in a substantial way. This age group extends from 6-24 years old, and the majority of them agree that videos are one of the best ways to connect with them. The predictions in early 2020 were correct; video content is king. This is a major new demographic that sellers need to pay attention to, and Sponsored Display is a great way to do it.
The third significant and most crucial difference with Sponsored Display is that instead of charging Amazon FBA sellers per Click (PPC), it charges them per Impression (PPI). At first glance, this might seem like a negative change that doesn’t benefit the seller; why should you pay for every time your ad is shown to a potential customer? What if they aren’t even interested in your product? What if they don’t even engage with the content?
Well, remember that Amazon is using its Programmatic Advertising. This powerful tool uses so much data about potential customers, data gleaned from all of Amazon’s sites. With all of this information, Amazon can ensure that your ads are being shown to the right people at the right time. This is the future of Amazon Advertising and offers a big push away from Amazon PPC and towards PPI campaigns in the future.
Making your Marketing Count in 2021
To recap, the three major Amazon PPC trends are that a more competitive saturated market means higher ad spends are the norm. Automation means manual Amazon PPC campaigns will be less effective than in the past as they will eventually be unable to compete with machine learning and cross-platform data analysis. All of this leads to a push towards Pay Per Impression and away from the traditional Amazon PPC.
Running your Amazon Advertising Campaigns can be time-consuming and take you away from other essential aspects of your Amazon business, including ensuring you are getting the reimbursements you are entitled to when using FBA.
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