Amazon advertising represents one of the most cost-effective tools to advertise products. Experienced sellers and marketers know that every opportunity you get to optimize your ad spend and keywords is a way to increase your bottom line. This means it’s extremely important to manage your Amazon ads properly. Due to the time and complexity of ad management, many businesses outsource their Amazon advertising to a third-party, such as a marketing agency, contractor, or freelancer. The amount of third-party Amazon advertisers is growing, and the market is getting crowded. The large number of choices can be overwhelming for anyone, let alone a brand entering the Amazon advertising space for the first time.
When you’re paying someone to manage your ad campaigns, you should know if they’re worth their price. Unfortunately, too often, they’re not. They may be charging you hundreds of dollars per month when they only check on your campaigns monthly. That’s not okay.
The problem is, it can be hard for business leaders to assess their agency’s or contractor’s true performance if they’re not versed in Amazon advertising fundamentals. To help, we’ve put together this blog post to help you determine if your Amazon search marketer is worth their salt.
Watch the video to learn how to create high-performing Amazon Sponsored Product campaigns.
5 Questions to Ask Your Potential Search Marketer
1) How Often will Bids, Budgets, and Search Terms be Optimized?
Is it every day, every week, or every month? Is it every six months? Frequency of optimizations is a critical consideration. Some folks are going to be affordable, but they may only log in to “optimize” your Amazon advertising campaigns once a month. The reality is that’s not optimization. The Amazon landscape fluctuates too greatly and too frequently to implement optimizations that rarely.
On the other hand, some may say that they will optimize your advertising campaigns every day. At that point, they may be over-responsive and over-managing. Amazon changes frequently, but it takes time to see what effect your previous optimizations are having. The sweet spot is somewhere between these two examples, in many cases being two to three times per week.
2) What Cadence will We Receive Performance Reports?
Your Amazon advertising agency or freelancer should provide reports regularly. As with the frequency of optimizations, there’s a sweet spot. Checking reports too rarely can result in poor performance and missed opportunities. Conversely, checking reports too frequently can lead to unnecessary stress and micro-management. Optimizations take time to take effect, so your reports should be spaced far enough apart to provide a true picture of what your last optimizations did.
Performance reports are like your child’s report card. If you review their report card only once per quarter, it may be too late to implement the changes needed to bring the grade up from a D to an A. Likewise, if you review their report card every day, there won’t be enough of a difference to suggest what, if any, changes are needed.
To start, we recommend a monthly cadence for performance reports. This prevents overreactions, while still being frequent enough that you can make strategic adjustments.
3) How Do You Plan to Manage Budget and How Will We Hold You Accountable?
Your budget may be based on a percentage of sales, or you may have a $10,000/month marketing budget. How is your Amazon advertising agency going to manage and optimize your budget effectively? Are they using an ACoS target? Are they going to try to reduce costs as much as possible? Are they going to be targeting only sales? Your Amazon advertising agency should have well prepared answers backed by data for these questions.
One type of relationship to watch out for is pay-for-performance oriented relationships. While your sales may increase, you may be increasing your ad spend by an inordinate amount, diminishing efficiency and ROI.
4) How Much of Our Budget is Spent on Branded Keywords?
Are there any high-value keywords that you’d like your products to place higher on the SERP for? Is it a branded term, a competitor’s term, an industry-specific term, or a category-term? If so, you should discuss that with your potential Amazon advertising agency or contractor because those types of targeted keywords may have a higher cost or higher conversion rate.
It’s easy to spend more than 50% of your budget on branded terms, but that can inhibit your advertising campaigns’ ability to reach new shoppers. Ask your partner how they will manage and optimize between your branded terms and non-branded terms. Ultimately, you’re trying to find consumers who aren’t only searching for your brand because that’s how you reach new people and acquire more customers.
5) What Organic Sales Lift can be Attributed to Your Marketing Efforts?
When you’re paying someone for a service, you have a right to know what results you can reasonably expect from their work. Excellent Amazon ad management products, used with reasonable effort, proper inventory, good positioning, and excellent logistics, should raise sales by 30%. Some people will claim they can go even higher than that. If they say they can increase organic sales by 35%-40%, thatI’s not too crazy, but if any agency or marketer says they can guarantee 50%, 60%, or 70% organic sales growth, you should be worried.
Here at Kaspien, we offer AdManager to help businesses optimize their Amazon advertising campaigns. If you want to use it yourself, SaaS is available. If you want us to manage your ad campaigns for you, we can do that too.
6 Telling Factors You Can Check On
Once you have hired an agency or freelance search marketer to manage your Amazon advertising campaigns (or if you already have one currently employed), you should continue to monitor their work. We recommend checking the following 6 factors as a way to assess how well they’re managing your advertising campaigns.
1) Are All Campaigns Set to Automatic Targeting?
If they are, that means your search marketer is not actively managing the campaign. They’re letting Amazon’s autopilot handle the work while they collect a paycheck from you, and your campaigns are missing significant optimization opportunities.
2) Are Automatic Campaigns Greater than 20% of Total Spend without any Search Terms being Added to Other Campaigns?
You should always be running both automatic and manual campaigns. However, if your automatic campaigns are generating significant parts of your spend, you should be worried because it indicates your manual campaigns are not being properly optimized. (One caveat to this is if it’s a new campaign. For new campaigns, automatic campaigns may account for the majority of spend while they build relevancy.)
3) Do Automatic Campaigns Have Negated Search Terms?
Negating search terms in automatic campaigns after migrating them as keywords in manual campaigns is a matter of good hygiene. Negating search terms from automatic campaigns prevents them from competing with your manual campaigns. If your search marketer is not doing this, that should be cause for alarm. Not doing this is bad etiquette and muddies your metrics, making it harder to manage the given manual campaign, your specific ideal customer acquisition rate, and ideal cost-per-click.
4) Are Small Groups of Products Utilizing the Majority of Spend?
If a majority of your spend is from a small list of high velocity products, then you’re missing opportunities for your other products. Your search marketer should be attempting to spread your ad spend across your whole catalog, rather than focusing it on a small group.
5) Are Branded Keywords Accounting for the Majority of Spend?
Branded keywords accounting for a majority ad spend is a huge red flag because it indicates your campaigns are not targeting new shoppers. Consumers will never search for your specific brand if they have never interacted with it before. For example, a consumer might search for “dog toy” or “soft dog toy”, but never “ZippyPaws” unless they have interacted with “ZippyPaws” before. Spending your money on branded keywords to attract new customers is wasting money.
6) What are Your Highest Performing Keywords?
If you have a high cost-per-click (CPC) but you’re winning the bid for your generic competitive keywords, you’re in good shape. It does make you a target for competitors, but it’s a good problem to have.
Find the Right Amazon Advertising Agency
Don’t let someone take advantage of your trust. If you’re paying someone, make sure you have mechanisms in place to hold them accountable. Ask prudent questions and check on your campaigns.
While you’re here, here are some other resources you can use to educate yourself on Amazon advertising:
- How To Create A Sustainable Amazon Advertising Campaign
- 3 Reasons To Run Amazon Advertising Even During The COVID Crisis
- How Statistics Can Help Optimize Your Search Marketing Campaigns
- Amazon Dropshipping 101: How to Dropship on Amazon - November 9, 2020
- 6 Tips for Defending Against Competitors Undercutting Pricing on Amazon - October 30, 2020
- Amazon Brand Registry Roles: What Are They and How to Use Them - October 27, 2020