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Why advertise on Amazon? Pros & Cons

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Although the figures in terms of advertising revenue are far from comparable, Amazon has positioned itself, surpassing Twitter, as the third most important advertising platform worldwide behind the giants Google and Facebook. This growth has not ended and, as can be seen in the following graph provided by combined study of Statista&BuyDissertation consultants, it is expected that Amazon will give much to talk about in the following years. It is estimated that your advertising revenue will increase 26.4% this year.

Throughout this article, we will try to explain the reason for this success and show the possibilities offered by Amazon as an advertising platform.

Advantages and disadvantages

Like any advertising platform, Amazon has advantages and disadvantages. Some of the pros that have helped and will help the success of this platform are, for example:

  • Users who come to Amazon do not seek information, but want to buy.
  • Amazon has a large amount of data on the behavior of usersthat other platforms lack (for example, how they convert or buy), data that uses in favor of advertisers who decide to use it.
  • By advertising on Amazon and increasing sales, SEOwithin the Amazon platform also improves.
  • The CPC is lowerthan in AdWords or Facebook.

 

But Amazon Advertising also has disadvantages and some of them are:

  • Selling through Amazon accounts for 20% less profits, a percentage that remains the platform.
  • More and more sellers are wanting to have a presence in Amazon and this makes the competition tougher.
  • Amazon can prioritize its own productsover others.

Types of ads

The ads on Amazon are mainly aimed at achieving three objectives:

1. Increase sales of the advertiser’s products.

For this purpose, the ads will appear at the top of the search results page.

This type of advertisement is perfect for those advertisers who, in addition to increasing sales, want to increase brandawareness or, even to publicize a new brand or product line. In addition, it allows you to display several products at the same time.

2. Generate traffic outside of Amazon

This type of ads is aimed at those advertisers who prefer that users make the conversion outside of Amazon.The formats offered to achieve this are not innovative, but Amazon is still betting on traditional display formats, such as banners, video, etc.

3. Increase Downloads of an App.

If the objective is not the sale, but to achieve the increase of downloads of an app, Amazon offers this format. With it, users will see the ad prompting them to download the app when they are using the Marketplace application itself.

One of the drawbacks of this format is that only ads will be shown to users who use a Fire or Android operating system.

How does Amazon Advertising work?

After knowing the advantages and disadvantages and the different types of ads that the Amazon advertising platform offers the question that arises is: how does it work?

Well, in terms of the account structure, the operation is similar to that of AdWords or Facebook, which, if you have already used any of the above, surely facilitates the work. The structure would be:

Account> campaign> ad group> ad> keyword

Unlike the mentioned platforms, in Amazon Advertising all ads refer to a specific product, that is, there is no possibility to make brand advertisements globally. The platform, to help those who have a large number of products, will automatically generate these ads. In addition, all ads must be linked to a product sheet as a landing page.

It is necessary to make a preliminary study of keywords to know which ones work best and which do not offer an interesting return to the advertiser. For this, there are several possibilities. On the one hand, you can use some specific software for Amazon that offers this information (Vander, e-Commerce consultant at floral bomber women jacket, recommends) and, on the other hand, there is the possibility of creating test campaigns.

Finally, we must mention that the platform uses a bidding system to fix the price of your ads: it ponders the quality and quantity of the impressions and the advertiser sets a maximum price to which he is willing to go. In this way, the advertiser only pays for the clicks that your ad has.   

Due to all this, more and more advertisers trust Amazon to advertise their products and achieve their goals. One thing is clear: Amazon has become an effective advertising channel that advertisers and agencies must keep in mind and that will give a lot to talk about.