Amazon Marketing: The Complete Guide & Strategies [2023 Update]

Amazon marketing is blowing up and your e-commerce store can’t miss out on all that revenue! Amazon is a trusted and popular online marketplace where millions of buyers and sellers make and spend money.

More than 50% of US shoppers start their product searches on Amazon. There are over 300 million Amazon shoppers worldwide, and 66% love this marketplace because they can find anything they need.

But if Amazon marketing is so wonderful why isn’t your business getting rich from it?

Well, with all this profit potential there comes a handful of challenges. Amazon is saturated and the competition is high and the algorithm is always changing.

So, how do you get around these Amazon marketing setbacks and drive your e-commerce sales through the roof?

We thought you’d never ask!

Thanks to extensive research, we’ve developed the ultimate guide on what Amazon marketing is, the different advertising channels and the top hacks to capitalize off this marketplace.

Ready to take advantage of Amazon marketing?

Here we go!

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    What is Amazon Marketing?

    Amazon marketing is the process of promoting your products on Amazon. This e-commerce platform is a global marketplace, and you can buy and sell just about anything on it. If businesses aren’t too careful, they can fall into the background noise and lose out on Amazon’s super-high revenue potential.

    Similar to other marketing platforms, leaving your business on Amazon and waiting for a boost in sales without taking strategic marketing steps and understanding this landscape won’t work. You might attract a few buyers and get good reviews, but your business won’t get the attention and revenue you want. 

    Summary: What is Amazon Marketing?

    It’s the practice of promoting your business on Amazon with ad campaigns, search engine marketing (SEM), and in-depth tracking and analytics.

    Source: Ian Smith

    Amazon Marketing: Opportunities and Challenges

    Building a thriving Amazon store requires a tactical marketing strategy. Below are some of the marketing opportunities and challenges for Amazon marketing:

    Amazon Marketing Opportunities

    As the biggest e-commerce platform in the world, the marketing opportunities are endless. Here are some of them:   

    1.Huge Online Sales

    It’s no secret that online sales are growing; in fact, 43% of US residents shop online weekly. During Thanksgiving, businesses on Amazon gathered over $1 billion in sales. Customers spend over $9.12 billion on Black Friday, while Cyber Monday sales bring in $11.3 billion.

    Clothes and accessories are a top category for online shoppers because users can easily shop on their smartphones (which they take everywhere). With an opportunity to tap into a market with high digital sales, you have a greater chance of reaching your ideal audience and converting them as most of the purchase intent exists in buyers already.

    Plus, as I mentioned earlier, consumers use Amazon as a search tool. These amplifies your reach to target shoppers as Google Ads would. Because think about, Amazon has almost become it’s own search engine, meaning another channel to funnel buyers to your product listings.

    2.Data-Driven Decisions

    Amazon allows you to make data-driven decisions that you can use to optimize your products and e-commerce merchandising strategies. You can track, measure, and record data such as your spend-per-click and the number of sales that result from each click. This gives you an idea of what is working and what isn’t.

    With this acquired data, you can optimize your ads and personalize them to your most frequent buyers. A simple example is when you notice lots of clicks on your landing page but few conversions to actual sales. You can make changes to the product description, images, and other content to convert interested buyers into consistent revenue.

    Amazon uses in-depth analysis for accurate ad targeting too. In other words, you get to benefit as Amazon has the necessary data to put your products in front of buyers that are most likely to convert.

    Amazon marketing stats
    Source: Influencer Marketing Hub

    3.E-commerce Opportunities

    As earlier mentioned, Amazon is a tough nut to crack but if your marketing strategy is good enough, you’ll have great profit potential in e-commerce. Using Amazon ads will improve your sales and visibility, and help you find the best ways to attract customers and gain valuable insight on how to optimize campaigns to suit consumer habits. 

    Summary: Amazon Marketing Opportunities

    1. Huge Online Sales
    2. Data-Driven Decisions
    3. E-commerce Opportunities

     

    Amazon Marketing Challenges

    While there are a lot of opportunities on Amazon, there are a couple of challenges as well. Here are some of them:

    1.Competition

    With 142.5 million Amazon Prime subscribers in the United States alone, e-commerce marketers are flocking to Amazon to get consumers’ eyes on their products. However, with more users comes more competition. It’s a double-edged sword. Amazon promotes growth, creativity, and innovation and puts businesses in front of thousands of targeted buyers. But the competition on Amazon is stiff, and many brands struggle to keep their heads above water. As a result, visibility is limited, and search formats are saturated.

    2.Fast-Growing Market

    What works today on Amazon might not work tomorrow. The algorithms and marketing trends change fast, and it’s hard for some businesses to keep up. As a result, it can be challenging to stay ahead of Amazon, and remain a best-seller on its platform.

    Amazon marketing stats
    Source: FinancesOnline

    3.Complex Advertising Plan

    Advertising your product to everyone, everywhere would be a waste of precious resources. Your advertising plan must be directive and structured and include clearly defined goals and objectives, a defined target audience, and your key KPIs. Developing such a high-level marketing strategy is often complex for the average seller who’s just trying to get their products out there.

    Summary: Amazon Marketing Challenges

    1. Competition
    2. Fast-Growing Market
    3. Complex Advertising Plan

    What Does Amazon Marketing Cost?

    Marketing costs on Amazon aren’t so clear-cut. Amazon ad costs differ based on a couple of factors, such as your budget, your target audience/niche, the type of ads, your bids, your advertising campaigns and niche.

    Amazon’s Pay-Per-Click (PPC) uses an auction-based model. Therefore, you can set the maximum amount you’re willing to pay when users click on your ad. The average PPC ad costs for Amazon falls between $1 and $6. But most businesses spend $0.97 every time a consumer clicks on their Amazon ad. 

    You can set your advertising budget at $5 to $10 daily, but it is advisable to start at $50 to $100 daily. Keep in mind that there is no correct budget as long as it works for your business.

    But how do you pay for Amazon advertising?

    Amazon sellers can secure ad placements through an ad auction. This means you’ll go up against your competitors and bid on specific keywords. Regardless of how high you bid, you’ll always pay $0.01 than the next highest bid if you want to win.

    Summary: Amazon Marketing Cost

    There aren’t exact costs for Amazon marketing, How much businesses and solo sellers spend rely on several factors. But the ballpark for your daily ad budget should be around $5 to $10. Ideally, you want to move those figures up to between $50 and $100 daily.

    What is the Amazon Marketing Service?

    Amazon Marketing Services (AMS) was the one-stop shop for everything having to do with advertising on Amazon. It was Amazon’s first central portal that sellers could use to view advertising tools and organize, manage & run their marketing strategies.

    Sellers could access several marketing solutions, such as Headline search ads, where they could bid on keywords on Amazon’s search bar and bring products right to their prospective buyers. 

    Another helpful tool was Product Display Ads which allowed product ads to show up on the Amazon homepage, search result pages, product detail pages, and even third-party websites.

    AMS was retired in 2018 alongside Amazon Media Group (AMG) and Amazon Advertising Platform (AAP). Amazon did this to simplify its advertising solutions. All their advertising product offerings were unified under the name “Amazon Advertising.”

    Amazon also made changes to some of its legacy products:

    • Headline Search Ads (HSA) became Sponsored Brands,
    • Amazon Advertising Platform (AAP) became Amazon DSP
    • Product Display Ads (PDA) became Sponsored Ads and
    • Product Display Ads (PDA) became Sponsored Display

    Summary: What is Amazon Marketing Services?

    Amazon Marketing Services (AMS) was an all-in-one marketing platform by Amazon. Now, Amazon offers “Amazon Advertising” as the umbrella term for AMS and it’s other marketing platforms.

    Amazon marketing stats
    Source: FinancesOnline

    Amazon A+ Content

    This is one of the best tools sellers can use to capture the attention of shoppers, as it allows them to show off their products with fancy images and graphics. Amazon A+ is a tool within the Seller Central portal on Amazon that allows sellers to create beautifully designed product descriptions for their Amazon listings.

    Instead of reading through boring and long descriptions, sellers can use relevant infographics, descriptive text, and highlight the key features of their products.

    Here’s an example of Amazon A+ content by Nivea:

    NIVEA AMAZON EXAMPLE
    Source: Remazing

    A+ content was originally an exclusive offering only available to vendors (first-party sellers), while Enhanced Brand Content (EBC) had fewer features but could be accessed by third-party vendors. Recently, Amazon combined these two tools, creating a module that all sellers and vendors could use.

    You can add logos, images, carousels, bulleted lists, comparison charts, videos, and much more to your Amazon listing content and it can be customized to look however you want.

    Let’s take a look at 2 of the benefits of A+ Content:

    • Higher Conversion Rates: According to a study conducted by Changing Minds, after three days, a user retains only 10-20 percent of written or spoken information but almost sixty-five percent of visual information. A+ Content lets you use descriptive text and high-quality images on a custom layout to position your product as the best option for the customer.
    • Demonstrates Your Product’s Unique Selling Points: A Unique Selling Point (USP) is how you can stand out from your competitors and convert more shoppers.. Amazon can be very competitive as there may be thousands of other listings similar to your own. Amazon A+ Content helps you utilize custom layouts, high-quality images, and descriptive text to highlight your product’s key selling points.

    Summary: Amazon A+ Content

    A+ Content is an Amazon Advertising tool that allows businesses to take their product listings to the next-level. You can add images and videos to your descriptions, and include your custom branding.

    How Amazon Advertises Its Products

    Now that you know all about Amazon A+ Content, let’s see how Amazon uses content like that to promote your products. Amazon uses three ways to accomplish this:

    1. Amazon has a massive customer base that it can reach through its various marketing channels.
    2. Amazon uses a variety of digital marketing techniques to reach its customer base and promote its products.
    3. The Amazon A9 algorithm.
    4. Amazon leverages extensive, in-depth customer and market data to match ads with targeted buyers.
    5. The Amazon High Runner strategy.

    Amazon uses PPC, SEO, email marketing (for special offers and deals), and social media marketing (Facebook, Instagram, Twitter). They combine these tactics to  ensure products are visible to targeted customers when they search for relevant keywords on search engines such as Google and Bing. 

    When a customer clicks on an ad, Amazon pays the website owner or search engine a fee. Amazon also has an affiliate marketing program where website owners and bloggers can earn a commission by promoting Amazon products on their websites.

    So, what about the A9 algorithm I mentioned earlier?

    Amazon uses a specialized algorithm called A9 to decide how products are ranked in search results. A9 analyzes keywords and decides which results are the most relevant and should be displayed first. Amazon prioritizes products with a high number of sales and high conversion rates (yep, your performance is paramount!)

    The algorithm ranks these products higher as they are more likely to be bought by other shoppers. So, you need a sound Amazon marketing strategy to best it’s algorithm!

    And what about Amazon’s vast data collection points and the High Runner strategy?

    First, Amazon collects and organizes a wide range of data on customers from various marketing channels. As Amazon has a robust search engine, this welcomes another channel for this E-commerce hub to gather customer insights. With all this information, Amazon can match your products to targeted users based on their purchasing and search behaviour.

    Second, the Amazon High Runner strategy describes featuring the best products on Amazon based on their number of clicks, conversions, interest and engagement. This strategy keeps the lens fixed on businesses who have sound products, and garner excellent customer feedback.

    Summary: How Amazon Advertises Its Products

    • Amazon has a global network of shoppers in all kinds of marketing niches
    • Amazon combines digital and traditional marketing tactics to maximize their reach and credibility
    • The Amazon A9 algorithm
    • Amazon leverages in-depth customer and market data to match ads with targeted buyers
    • The Amazon High Runner strategy

    Amazon Advertising Options

    As the largest e-commerce platform in the world, it’s surprising that Amazon would give business advertising options. But, like many fantastic aspects of this platform, they do!

    The two main advertising options by Amazon are Amazon Pay-Per-Click (PPC) and Amazon Demand-Side Platform (DSP). These options are divided into 3 and 5 types respectively. 

    When used correctly, both PPC and DSP are great ways to gain traction for your online store. Which type of ad you’ll need depends on your product and Amazon marketing goals.

    PPC is the most common type of ad. Each time a shopper clicks on your Amazon ad, you pay a small fee.

    On the other hand, Amazon DSP allows you to programmatically buy ads to reach a new and exciting audience on and off Amazon. Let’s explore these two Amazon advertising options in detail below.

    Summary: Amazon Advertising Options

    Amazon has 2 primary advertising options which include:

    1. Amazon PPC ads and;
    2. Amazon Demand-Side Platform (DSP)

    What are Amazon PPC Ads?

    Amazon PPC campaigns  are available to advertisers such as Small and Medium Businesses (SMBs) and agencies. There are three main types:

    • Sponsored Products
    • Sponsored Brands
    • Sponsored Displays

    Amazon Sponsored Products

    Amazon Sponsored Products are perfect for first-time users. They allow you to create a campaign by generating ads from your selected products and even offer automated targeting. This is  a cost-per-click (CPC) ad, where you only pay when customers click on your ads. All you have to do is choose how much to bid, create your ad, and don’t forget to track your success rate!

    Amazon product ads
    Source: Jungle Scout

    Why You Need Amazon Sponsored Products

    • You can secure the top position in the search results
    • You can easily promote seasonal products
    • As a new business, you get a chance to increase sales for your newly launched products.

    Amazon Sponsored Brands

    With Amazon Sponsored Brands, you unleash your inner creative Amazon entrepreneur!! You can create ads with out-of-the-box ideas to help potential customers discover your products. This is a CPC ad that also includes customized headlines, images, and videos. 

    Amazon brand ads
    Source: Jungle Scout

    You can showcase your brand personality and increase brand awareness when you leverage these Amazon marketing ads.. The highlight of this ad is that it’s placed on the top, left, and below the search results page, which makes it hard to miss. 

    Why you need Amazon Sponsored Brands

    • You control the appearance of your ad
    • Provide a special shopping experience for your customers
    • You can gain the trust of potential customers
    • You can create video ads effortlessly and increase your conversion rate

    However, Amazon Sponsored Brands are only available to sellers with an active professional seller account or a vendor central account.

    Amazon Sponsored Display Ads

    With this ad, you can discover and engage your target audience through their shopping experience. This is a self-service ad that allows you to find relevant customers on Amazon and other third-party apps and websites.

    Amazon marketing_sponosred display ads
    Source: Jungle Scout

    Why you need Amazon Sponsored Display Ads

    • These ads offer you auto-generated campaigns that are optimized for maximum conversions.
    • You have easy access to your display inventory
    • Sponsored Display ads make retargeting easy.

    Summary: What are Amazon PPC Ads?

    Amazon PPC ads are best for small to mid-level businesses and come in 3 formats which are:

    • Sponsored Products
    • Sponsored Brands
    • Sponsored Displays

    What is Amazon DSP

    Business owners often find it difficult to fully understand the concept of Amazon Demand-Side Platform (DSP), as it’s an authentic advertising service. Amazon DSP is a software that allows advertisers to buy ads on and off the marketplace.

    With Amazon DSP, you can search and programmatically purchase display ads, videos, and audio across the internet.

    It’s similar to Google Display Network (GDN), where you can purchase ad space for different websites. It means that you don’t have to buy ad space on each website but can display them on a variety of websites belonging to the same network.

    So, how does Amazon DPS work? 

    Amazon automatically bids on the best ad spaces (for your business) based on your budget, target audience, and minimum/maximum bid. Since Amazon has valuable data on the shopping behavior of customers, your ads would be targeted at customers that have previously purchased products similar to yours. Not only that, Amazon DSP is not restricted to the platform alone. It’s a flexible advertising service that grants you access all over the internet.

    There are 5 types of Amazon DSP ads:

    Video Ads (Amazon OTT and Out-Stream Ads):

    Amazon customers are always ready to dig deep into their virtual wallets! One way to snag the interest of your potential buyers is through creative video ads. So, what are video ads?

    Amazon video ads  help you stand out from the crowd and wow your buyers on Amazon’s websites, mobile apps, and the Fire tablet wake screen (advertising platform that displays full-screen ads). Video ads come in two types, Amazon = OTT (over-the-top) and out-stream ads.

    • With Amazon OTT, your video ads are delivered directly to viewers through streaming platforms. These are non-skippable and non-clickable, so they are paid per thousand impressions, not paid per click.
    • Unlike Amazon OTT, out-stream ads don’t appear within video content. Instead, they appear as separate videos in spaces reserved for display ads.

    Custom Ads

    For a truly personalized shopping experience, build your Amazon campaign  with custom ads. With these ads, your ad campaign can include any or all the advertising options available on Amazon. You can create a customized (tailored to suit your business goals) and innovative campaign that engages customers and boosts brand awareness, and conversion rates!

    Amazon Audio Ads (Beta)

    Here’s a chance to put your Alexa-enabled device to good use. With Amazon interactive audio ads, listeners can respond by voice to an Alexa call-to-action. They can ask for more information, add a product to their shopping cart, or set a reminder.

    Audio ads are 10 to 30 seconds long and appear with a banner image on smart devices (desktop, mobile phones and tablets).

    The goal of this ad service is to capture customers at random times and really pique their interests. Whether they are working from home, cooking, or hanging out with friends and family, you can reach your customers during listening times.

    It automatically plays during breaks within songs on first-party and third-party Amazon Publisher services.

    Now you don’t have to worry about your users being too busy to view your ads. Your ads would automatically play even when they’re not looking at their devices!

    Amazon Posts (Beta)

    Capture your customer’s attention with your unique brand story. Instead of relying on other social media platforms, you can share fresh images and product-related content on your Amazon feed. This ad service allows you to show users how to use your products and nudge them toward your brand.

    Amazon Live

    Also similar to social media platforms, Amazon live allows you to collaborate with celebrities and influencers to create compelling content that showcases your brand and products. You can choose to use influencers or create your own personality-driven Livestream with the Amazon Live Creator app. You can also work with Amazon influencers to feature on their livestreams!

    Why and When to Use Amazon DSP Ads

    Amazon DSP is great for many reasons. For example, it has advanced targeting features that point out potential customers according to location, mobile versus desktop-specific ads, ZIP code, etc. You can even target long-lost customers that haven’t visited your store in a while. Amazon DSP catches onto unexpected changes (for example, Amazon’s marketing strategy during covid-19) and helps you gain new customers.

    You should use Amazon DSP if your brand isn’t visible enough. Not only that, it is great for brands that wish to connect and engage with their customers. If you want to keep customers locked in and loyal to your brand, then Amazon DSP is best for you.

    Summary: What is Amazon DSP?

    Amazon DPS is an authentic advertising solution by Amazon where sellers can reach a wider audience and increase sales through targeted programmatic advertising. There are 5 types of Amazon DSP ads which include:

    1. Video ads (Amazon OTT and Out-Stream Ads)
    2. Custom Ads
    3. Amazon Audio Ads (Beta),
    4. Amazon Posts (Beta)
    5. Amazon Live

    5 Amazon Marketing Hacks 

    Phew! You’ve learned a lot about Amazon marketing and the robust advertising functions. But until you know these top 5 Amazon marketing hacks, you’re not done yet!

    1.Focus on Keyword Relevancy

    Keyword relevancy is vital in any  standard marketing strategy. Since the shopping behavior of customers changes constantly, always stay ahead of your keyword research. Reevaluate your keywords as often as possible to help you reach your target audience.

    Simply stuffing keywords into your copy wouldn’t cut it. Strategically place relevant terms on the product detail page (title, description, and bullet points).

    2.Have a Clear Roadmap

    This definitely goes without saying. You can’t have a successful business (especially on the e-commerce giant) without a clear vision. What are your short-term goals? What are your long-term goals? Are they clearly defined? 

    These are vital questions you need to ask to help you build a roadmap and focus on the steps you need to take to achieve your business goals. 

    Amazon marketing
    Source: FitSmallBusiness

    3.Be Super Niche-Specific

    Amazon is a large marketplace where you can find just about anything from just about anyone. Infiltrating a massive place like that’s (once again) tough! The best thing to do is niche down, be as specific as possible with your target market, and customize your products for them.

    4.Invest in More Advertising

    Investing in more advertising would help your business stand out. It would put your brand in the minds of your customers, like a catchy song that you just can’t forget. Imagine being in a classroom with overachievers and not putting in the necessary effort to make your mark -what happens? You become invincible! 

    The best part about Amazon advertising services is that there are many options to help you boost your brand visibility and stimulate your sales velocity.

    5.Bring in Traffic from Outside Amazon

    Most Amazon advertising services are programmed to help you reach your target market on and off the platform. It allows you to get traffic from other sites (which Amazon calculates).For a successful Amazon business, you want to cast a wide net so you can reach your target audience across the world and the internet.

    Summary: Amazon Marketing Hacks

    1. Focus on Keyword Relevancy
    2. Have a Clear Roadmap
    3. Be Super Niche-Specific
    4. Invest In more Advertising
    5. Bring in Traffic Outside of Amazon

    Conclusion 

    With that, we’ve reached the end of our guide. Amazon marketing is a complex and ever-changing landscape, but the principles we’ve covered (keyword relevancy, data-driven decisions, Amazon advertising options, etc.) should help you get started. Be sure to implement these tips, and you’ll have record-breaking sales in no time!

    Frequently Asked Questions

    What is Amazon marketing?

    Amazon marketing is the practice of using Amazon's marketplace to promote and sell your products. Amazon is a global E-commerce platform, meaning you greatly expand your reach. Read this article for an ultimate guide on Amazon marketing and how it works.

    How does Amazon promote products?

    Amazon does this in three ways: 1)The platform has a network of over 300 million shoppers, 2)They combine digital and traditional marketing, and 3), They use an algorithm called A9. Read this article for more on how to drive crazy sales on Amazon.

    What are the challenges and benefits of Amazon marketing?

    The challenges of Amazon marketing is that there is a lot of competition on Amazon, the software is always changing and you need a complex marketing strategy. The benefits are that Amazon makes billions of online sales and you can make data-driven decisions and uncover strategic marketing opportunities. Read this article for more!

    References

    Jungle Scout: Quarterly Changes in Consumer Behavior and

    Jungle Scout: 15 Amazon Statistics You Should Know in 2022

    MarketingCharts: An Updated Look at the Top Reasons People Shop on Amazon

    FitSmallBusiness: 24 Amazon Statistics Sellers Need to Know in 2022

    Statista: Consumers that Shop Online and Offline on a weekly Basis (US, UK, and Australia in 2022)