TRS 004: Amazon Advertising Ins and Outs with Jerica Reddig
It’s was only a matter of time before Amazon grew into the third largest digital advertising platform, and if you are an e-retailer looking to make it on Amazon, a solid advertising campaign can really get your sales going. On this episode, our Marketplace Advisor Jerica Reddig walks us through why advertising on Amazon is a tough nut to crack and how brands can find their competitive edge on Amazon, crushing the threat of competitor intimacy.
Though it may seem like it’s just a game of man vs. machine, Jerica explains the importance of having actively monitored campaigns, especially as automation features continue to shift. If you’re interested in learning how to master your Amazon account, this episode is for you.
Jerica’s blog article Four Things to Check with an Amazon Audit
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Marcus: Hello marketers and business leaders. I’m Marcus Grimm and welcome to The Revenue Stream, the podcast from Web Talent Marketing. Here we discuss everything you need to know to build brands, generate leads, and convert sales from some of the brightest minds in marketing.
Marcus: And here’s a news flash for you. Amazon is bigger than ever. Rather than bludgeon you with statistics, I just want to look at a few regarding Prime Day, Amazon’s annual sales event that happens on July 16th. Well from 2015 to 2017 sales on Prime Day — that’s one day — they nearly tripled from $900 million to $2.4 billion. Oh, and by the way, those Amazon Prime customers, well, they spend an average of around $3,000 each and every year, approximately six times the revenue of non prime customers. But of course, where there’s revenue, there’s competition and where there’s a lot of revenue, while there’s a lot of competition.
Marcus: So today on The Revenue Stream, we’re going to be speaking with Jerica Reddig. Jerica is a Marketplace Advisor for Web Talent Marketing. But more importantly, she is one of the lead team members waging the daily war on Amazon for our clients. And she’s going to take us right down to the battlefield.
Marcus: Jerica, welcome to the program.
Jerica: Thank you, Marcus.
Marcus: Well, let’s start at the beginning here. Share with us a little bit about your background. Where’d you go to high school/ college and I want you to take us up to that point that you said, Huh. Digital marketing makes sense for me.
Jerica: Well, I think that my story is more of that of a small town Pennsylvania girl who didn’t really know what she wanted to do career wise. So she chose a broad major, business, and a broad city to go to school at, New York. But my love of digital marketing really happened during my second internship ever in the marketing department of an email service provider, and I just found the fact that, the combination between data and algorithms and psychology and creativity just fascinating.
Marcus: So it’s interesting you talked about that. You talk about creativity and analytics as well. One of the things that it seems to me is a lot of the sharpest marketers would describe themselves as whole-brain people. Is that how you would describe yourself self? As a whole-brained person?
Jerica: Yes, 100%. I do lean more towards my analytical side, but the creativity is just right there along with it.
Marcus: Outstanding. Well, very, very cool. I know we’re thrilled to have you on the Web Talent Team, and today we’re going to be talking about Amazon, right? Where I know you spent a ton of, of your time. Now my understanding is you got your start in Google PPC and have now added Amazon. So for people that maybe aren’t on Amazon, what are some of the key differences that you see between the two platforms, Google and Amazon, and how do they play out for your customers?
Jerica: Well, for offering such similar services, there is a lot of differences between Google and Amazon. You can’t just take your knowledge of Google and your Google strategies and plop it into Amazon and think that it’s going to work. I find that there’s three main factors that you need to account for when you start developing an Amazon strategy, compared to your Google one. The three main ones are the user intent, the ranking factors, and the basic platform features.
Marcus: So let’s talk about user intent. What does that mean, and how is Google different than Amazon?
Jerica: Well, so user intent, a lot of experts believe that Amazon’s user intent is a lot higher than Google’s user intent. So what this means is that shoppers who start their purchases on Amazon, make frequent and quicker decisions and purchases. So I see this play out a lot even in the search term results. Like on Google, you’re going to get a lot of different queries that are just product focused but are actually question-based queries as well. Right? On Amazon, all of your search terms and all your search queries are just product-focused, right? That’s a lot higher intent value.
Marcus: So by the time I’ve come to Amazon, I’ve made a lot of those evaluation choices. Am I even interested in this category?
Jerica: Exactly. Exactly.
Marcus: Okay. So that’s intent what’s the second one?
Jerica: The ranking factors.
Marcus: Okay, so talk, talk us about how those are different.
Jerica: So this kind of bases around what Google defines as a good after click experience versus what Amazon defines a good after click experience. So Google will use things after you click on an ad. They’ll use things like: How long you stay on the website? Do you bounce quickly? Do you visit multiple pages on the website? to determine, “Okay, this ad and this keyword are highly correlated.”
Jerica: Now Amazon, on the other hand, they don’t just know if you click on an ad. They know if you purchase the product, and they don’t just make money when you click on an ad. They make money when you purchase that product. So they are incentivized to not just show the highest bidder, but they’re incentivized to show the product that’s most likely to convert.
Marcus: So that’s kind of interesting. So one of the things to really think about, if you’re listing your products on Amazon, is Amazon really wants that product to sell. Of course they want every other product to sell as well. So we’ll be talking about competition then. And what’s the third thing that you think about on the platform?
Jerica: Just the basic platform features. Amazon, for being as big of a company as they are, their platform’s actually very rudimentary.
Marcus: So talk to me about some of the things that you know from Google that, even being as smart as you are and as clever as you are on Amazon, things that you wish you could know on Amazon that you don’t know.
Jerica: Things that I wish I could know. Oh, I, so recently, actually this past year, Amazon came out with a graphing functionality which sounds very basic, and it kind of is. But it was a game changer for a few of my clients where we were able to discover that their ACos (advertising cost of sale), which is Amazon’s ROI metric, increased a lot higher on the weekends than on the weekdays.
Marcus: Interesting. So let’s do every everything we can to explain the buzzwords. Let’s, let’s unpack that. ACos. Let’s go through that again. That’s Amazon’s cost of sale and what goes into that?
Jerica: So you take your spend divided by your ad sales, and that gives you an ROI metric. But it’s inverse where you want it to be smaller versus an ROI when you want it to be bigger.
Marcus: Got It. So Jerica you know, one of the things that I know is that there were some changes to Amazon that happened a few years back when they allowed foreign resellers to come onto the platform. And it seems to me that that, for a lot of your clients and for you, it’s kind of changed the way the business works. How is it different now than it would have been say five years ago?
Jerica: Yeah, I mean Amazon’s international expansion was a game changer. So now companies, regardless of where their headquarters are at, now have the ability to take their market from 100 million US purchasers to almost 250 million worldwide, right? Now, a bigger thing than this is now they can take their US market, which is highly saturated, really competitive, to less saturated markets. Right? Big Deal.
Jerica: This also came with a lot of challenges as well. I’d never recommend any of my clients to just decide we’re going to sell internationally and see whatever problems rise up, right? You have to take in a lot of considerations to whether your product’s going to sell well in this new market and all of the different changes about this type of demographics. A basic thing that most companies forget to do is something rudimentary like changing your packaging and your instructions of how to set up the product or whatever it is to be in the native language. And you don’t even want to lean towards a machine translator. You want to lean towards a native language speaker that can convey what you’re trying to convey in the colloquial mannerisms.
Marcus: Now, what you said there is really interesting, but I really want to unpack why that is. So are you saying, for instance, that if I sell a product to another country and they can’t read my instructions, does Amazon not want me to do that or are there just ramifications because now I’m going to get negative reviews and it’s going to impact me? So let’s say I do that, I’ve got English instructions and I sent it to a non-English speaker. What are the ramifications?
Jerica: So you can do that and Amazon’s not going to prohibit you from doing that, but you will get a lot of negative reviews. People who don’t understand how to use your product, right? And that’s going to decrease your sales, that’s going to decrease your organic rankings. That’s gonna hinder your business as a whole.
Marcus: So let’s talk about that. So that’s really interesting. So I get a negative review and of course that’s bad. But by the same token, you’re also telling me that Amazon knows it’s bad. And so my product will not show up as much because of those negative reviews.
Jerica: Because remember we talked about the ranking factors. So Amazon is going to reward your product for selling well. They’re going to rank it higher organically, and they’re going to charge you less per click if you’re a product selling well. The inverse is true. If your product is not converting, they’re going to rank it lower organically and they’ll sometimes even pause your campaigns if it’s not converting.
Marcus: Because at the end of the day, Amazon is there to make the most money for Amazon. And so if my product is not performing well, I’m going to pay for that. One of the things that I want to talk about, which I find really interesting about the difference between the Amazon platform and the Google platform, is the concept of — and this goes back to what you do all day — you manage paid accounts for people on Amazon. Now, we’ve always talked about this battle of church and state on Google where the more ads that I buy on Google don’t necessarily help my organic ratings, or Google says they don’t help my organic ratings. What’s the story on Amazon?
Jerica: That is exactly the opposite on Amazon. There’s this flywheel effect where your organic sales and your paid sales both help each other out. It’s almost like they build each other up, right? So if you sell a lot organically or maybe you’re not selling as much organically and you start putting paid dollars into it to increase your sales. Amazon’s now going to recognize that, “Hey, this product does convert on these specific keywords. So maybe we want to rank it higher organically on those specific keywords so we can make more money. ”
Marcus: So your organic traffic very much gets rewarded on Amazon in a way that it doesn’t on Google. Now I want us to take a step back and ask a very tactical question because I know there’s a lot of people who, they’ve gotten on Amazon and they say, “Hey, this is really simple. This is easy to do.” And why do they think it’s easy to do? Well when you come on Amazon, they simply put their bids on automatic. And you know what? I have to be honest, it sounds like a really, really simple thing to do. Amazon’s a pretty smart company, and you’ve been telling us for the past 15 minutes that Amazon just wants to move product. But from watching you and the other people at Web Talent Marketing, when you manage these Amazon accounts, it seems like one of the first things you usually do is turn off automatic. So what I want to know is, Jerica, what do you know that Amazon’s algorithm doesn’t?
Jerica: That’s a fair question. And I do want to start off by saying that I do appreciate automatic campaigns. In fact, in every one of client’s accounts that I manage, I have at least one automatic campaign because automatic campaigns shine in their ability to monitor how customers’ search queries change over time. That’s something that manual campaigns, where you set the keywords, they can’t do. But the power of manual campaigns come from my ability to now target keywords and ACoS on that keyword level. So, for instance, as a marketer, I am willing to bid say a dollar for the search term “Nike soccer cleats men’s size 13.” That person knows the brand they want, they know the size they want, they are highly intended to purchase.
Marcus: That’s what they want. They’re there. They’re there to make that purchase.
Jerica: But I might only want to pay 30 cents for “soccer cleats.” Right? Less intent. So manual campaigns give me the ability to bid higher on longer tail, higher intense search queries and less on broader search queries. So now I can really strategically refine that advertising cost of sale we talked about earlier.
Marcus: Is there a little bit of gamesmanship there too? Do you keep that one automatic account running because you want to truly see are you better than the machine?
Jerica: A little bit, but the majority of the data shows that the manual campaigns just outperform every time.
Marcus: Yeah, that’s outstanding feedback. So one of the aspects that I know many people discuss is the idea that for a lot of us, most of us didn’t start out as e-tailers. Most of us started out with brick and mortars. You know, I had the ability to decide where my products are sold and I had this thing where, you know, I had exclusivity.
Marcus: You know, you’ve got some stores and say, “Hey listen, if I’m Nike I’m not going to sell Adidas here.” Well it’s totally different than on Amazon; I’m going to be right beside my competitors. And I know you and the team talk about that a lot, but I mean my competitors are right there. So what can I do about that on Amazon?
Jerica: That is such a big question and such a big challenge that a lot of our Amazon sellers face. Because on Amazon’s platform, you are consistently one click away from losing a sale at every minute. And a lot of those competitive differentiators you used to have, you don’t have them anymore. You have that same two day shipping option, you have the same simple ship, simple checkout and much more. So one way that our clients will tell you is an efffective way to combat this competitor intimacy is by drawing shoppers into your own Amazon-branded ecosystem.
Marcus: And how do you do that?
Jerica: So Amazon actually offers you a tool to do this called Amazon storefronts. This is a relatively new thing within the past year where it’s basically, an Amazon storefront, is an online mini e-commerce website housed on Amazon? How you get to it is if you’re on a product detail page, you click on the brand and it brings you to the storefront. And suddenly now shoppers, all they see are your products. Your competitor’s products are nowhere to be found.
Marcus: So at least on that page then it, it truly is my store. And what do you find that are most brands using the storefront feature right now?
Jerica: Most brands don’t even know it exists.
Marcus: And, and what, what type of results have you seen when you deploy a storefront properly? Is it immediate?
Jerica: It builds, but you have to use it strategically as well.
Jerica: Navigating to that is harder on its own, but if you make it discoverable, that’s a game changer. And you can make a discoverable in two big ways. One is through something called a sponsored brand, it used to be called a headline search ad. So this is a banner ad that shows on the top of a search results page, and it can link directly to your storefront. Another way is through Facebook advertising. So Amazon doesn’t allow you to link your Facebook ads to a product page, but they will allow you to link to your storefront. So now you can drive other traffic to your storefront.
Marcus: And it would make sense that you would do that on Facebook anyway because, I’m guessing, your storefront is more for brand-loyal people. You’re not pushing a product on that particular page per se. You’re actually pushing the brand.
Marcus: Outstanding. So the storefronts a great way to reduce that competitive intimacy. But I want to talk about what there is to do beyond that. You know, so one of the questions I really have here is you’ve got a lot of products on Amazon that nobody is doing ads. I mean, you know, I’ve seen you Jerica you and your team work really, really hard, but you’re not working 24 hours a day. So clearly there’s a lot of products on Amazon where people aren’t buying ads. What does the data show? Can I be successful on Amazon without buying sponsored ads?
Jerica: Well, Marcus, if you’re like me, you probably don’t click on sponsored products or ads in general. Amazon, just like all other mediums, shows that organic clicks actually have the potential to drive the majority of your sales. A good rule of thumb, that is used in the industry, is that organic clicks have the opportunity to make up to 60% of your product sales while paid ads have opportunity to make up to 40% of your product sales. If that’s very skewed, heavily towards paid, then maybe it’s time to start looking at some Amazon SEO optimizations, title changes, backend keyword research changes, anything to try and boost that up.
Marcus: That seems like a really good metric, and we’ve talked about metrics before and what Amazon makes available to us. Is that one pretty simple to in the platform? Am I at that 60/40 number?
Jerica: So Amazon actually makes it very difficult to see a lot of the data. One reason why a lot of companies come to Web Talent Marketing is because we can offer that SKU level reporting, right?
Marcus: SKU level reporting. So let’s pretend I’m not with Web Talent Marketing. Let’s start there, and then we’ll talk about the difference. Can we use your shoe example? So without SKU level reporting, what would Amazon tell me about the shoes that I’m selling on Amazon?
Jerica: So Amazon will tell you overall sales and overall product viewing sessions, items like that. Just really overall. It doesn’t break down by paid versus organic. And they’ll tell you in your campaigns what the ACos is per SKU, but it doesn’t show it side by side doesn’t break down how much am I relying on paid versus how much am I relying on organic.
Marcus: Which sounds like you’re saying that that’s a really good way for you to figure out if you’re maximizing your potential on the platform, right? So we’ve talked about, and you said it yourself, I mean you can sell a lot of stuff on Amazon without sponsored messages, but wow, there sure are a lot of opportunities to buy sponsored messages on Amazon. So I’m going to ask you a tough question first. Do you know exactly how many different sponsorship opportunities that are on Amazon?
Jerica: Yes. There are three.
Marcus: There are three. Let’s go through them.
Jerica: Okay, I do want to say something first cause what you said reminded me of something. One of the differences between Google and Amazon is Amazon ads are always going to have a lower click through rate than Google ads. Because there’s so many opportunities and impossible places you can click on an Amazon results page, not just even add wise, but even the different brand, what size, what category you’re going to be in even in the top navigation bar it’s just a lot of data.
Marcus: So, I always try to operate in generality, so I know sometimes on, you know, a Google paid click campaign, 2% is a good number, right? That’s when you pat yourself on the back and you did a good job? Is that, generally fair.
Jerica: I’d say so.
Marcus: 2%. What’s a good one on Amazon?
Jerica: If I see a 1% click through rate, I would be surprised. If I see below a 0.1% click through rate, then something’s wrong.
Marcus: So a quarter percent click through rate, which on Google, you’d be like, “I gotta do something better here” on Amazon is not bad.
Jerica: Not too bad.
Marcus: So let’s go through those three different types of ad messages.
Jerica: So first you have your sponsor products. These are the ads that show up next to the organic listings in the search results page. They show up in the top, the bottom, and the middle, and they also show up on the carousel ads on a product detail page.
Marcus: What’s a carousel ad?
Jerica: So if you’re on a product detail page, right below you’re going to see two different lines of different products. Probably one is going to say “similar to the products you’re looking at” and one’s going to say “sponsored products similar to the products you’re looking at.” That’s where they show up.
Marcus: Okay. And even if organically, I would be similar, I’m not going to show up there if I didn’t pay for that privilege?
Jerica: Not for the “sponsor products similar” ads.
Marcus: Okay. And then the third category?
Jerica: Well, the second type of category is what we talked about earlier: the sponsor brands, that previously were known as the headline search ads. So again, those are the banners where you can actually have a headline, a little phrase right there. You show your brand logo on the left, three different products on the right and they can link to either a storefront or a curated product detail page.
Marcus: Interesting. And I’m curious, the third category is…?
Jerica: These are product display ads. So these show up on the product detail page right below the add to cart button. These are your last chance to advertise before something is added to the cart.
Marcus: So you are grabbing somebody who’s pretty much said, “I think I’m interested in this,” and you’re like, “Whoa, you might be interested in something else.”
Marcus: I’ve got those three different types of placements. The reality is, can I get by with one of them? Is there, is there one that you feel like, ah, you know what, you don’t need this one. I mean, how do you decide which of those three to recommend, or does it depend on the product or category?
Jerica: So each ad type has its place, and a good marketing strategy should be a holistic one and should include all three. That being said, if I’m running on a limited budget, I want to spend most of that, probably all of that on sponsored products. Sponsored products will move the most inventory; they have the highest click volume and should be your biggest focus when optimizing your campaigns.
Marcus: I’ve also noticed, and tell me if this is always true, I feel like when I search on mobile, those sponsor products get a very prime position on mobiles. Is that generally the case?
Jerica: Yes, absolutely.
Marcus: And, I can’t believe we’ve gotten this far in the program without saying the word mobile, but there’s a lot of Amazon happening on mobile these days, right?
Jerica: Oh yes. But you can’t even really see reports for mobile versus desktop in Amazon. That’s another thing I wish I knew.
Marcus: You can’t see that data? So when working with a company like Web Talent, we don’t even provide that? We don’t know it.
Jerica: Amazon doesn’t even give anyone access to that nor are there third party tools that will allow us to do that.
Marcus: Well it seems like that that would be something that we would ask Amazon to do if they are actually listening to this podcast, which I hope they are. Now we’ve kind of approached this entire Amazon story backwards. We started with storefronts and we started with sponsored ads, but we didn’t really talk about products until now. Why did we leave products till last for this program?
Jerica: Honestly, Marcus, products are the most important part. Everyone knows that a sale is much more important than a click. And so we’re seeing some of the biggest innovation on the product side.
Marcus: On the product page itself? So tell me about that. I mean the product page; what do you got? You’ve got the size, you’ve got the price it, you know? What matters on the product page?
Jerica: So there are a couple of things that matter on the product page. And the big overall point that I want to draw out here is that when you create a product page, you want to optimize it 50% for Amazon’s bots and 50% for the actual shopper.
Marcus: Now, that’s outstanding. Let’s unpack that. What does that even look like on a regular basis?
Jerica: So first, I want to start with Amazon’s bots. So Amazon’s A9 algorithm is the algorithm that chooses to rank your products in the organic search results. It uses four things to rank your product. The first and most important is the title, product title. Secondly is the bullet points. Third is the product description, and the fourth is the backend search terms. So product title is the biggest one. And this is the most opportunity for improvement. So you want to include things like your brand, their product type, your size, your material, but you also want to include target keywords. Now you don’t want to keyword stuff because Amazon’s bots will catch that and they will suppress your listings, but you do need to show Amazon that your product is highly relevant to those valuable keywords.
Marcus: So that would, and I’m guessing, some ways to do that would be, like you’re saying you don’t want to stuff it, but it could be moving that keyword around in the headline. Right?
Jerica: Exactly. Actually order matters a lot. Amazon correlates higher intent and higher relevancy to search terms that come first.
Marcus: Interesting. So, and then the other 50% is obviously you’re not trying to write for bots. You’re trying to write for the user itself.
Jerica: Right. And I’ll give you a really good example of this. So we have two different items that happen below those carousel ads. One is a product description. Two is something called enhanced branded content. Enhanced branded content can come in a variety of forms. It can be additional images and verbiage. It can be even a comparison chart between you and your top competitors. So where you want to optimize for the bots is in that product description. It is probably the most overlooked, verbiage on that product detail page by consumers, but the bots still use it to rank your product. So you don’t want to leave a blank, and you want to still fill that with those relevant keywords because you have the most space to do so. But the enhanced branded content will not be ranked by Amazon. So you can put as much keywords in there. It doesn’t matter. Amazon’s not going to use it, but who does use it is your shoppers. That’s where the other 50% comes from, right? You want to, you want to include enhanced branded conduct cause that’s gonna help increase your conversion rate.
Marcus: And I’m going to guess that, that these are the types of things that probably are only happening when companies hire agencies. If you’re selling your own product on there, these are real simple things that it seems like they would move the needle.
Marcus: Now it’s really, really interesting. You’re talking about you as an agency, as an SEO, as a PPC person, it sounds like you really kind of want some control of that product page, which, let’s face it, is generally handled by the brands themselves, by the product managers. So does this mean that you find yourself having different types of conversations or should be having different types of conversations with your clients? Because I’m guessing that, you know, historically you haven’t been playing around with product descriptions.
Marcus: So how do you navigate those conversations, or what should a back and forth look like with the agency to figure out, “Hey, you know what, we as the agency really want to have some say over what’s going on in this page?”
Jerica: I think that that is definitely a conversation that people need to be having more and more often. Some clients do SEO and paid because it makes sense for them because it’s valuable for them and they want that holistic strategy. And like I said before, a sale is much more important than a click. Why are we going to spend money on these ads if it’s not going to convert at the end of the day?
Marcus: Right, right. Outstanding. Yeah. I’m curious, there’s so much volatility on the end of the Amazon marketplace. One of the things that I wonder is, you know, and I think I described at the beginning, there’s this war for attention or the war for commerce. How often are you in your accounts on Amazon? Are you looking at them on a monthly basis, a weekly basis, a daily basis? I mean…?
Jerica: Well, the tricky thing here is that Amazon has a two to three day sales lag time. So it’s hard to make decisions the day after because you don’t have a full picture of what happened the day before. Now that being said, as a rule of thumb, I generally would do it on a weekly basis. But as a marketer in this data driven world, I make changes when data says to make changes.
Marcus: Got it.
Jerica: So if my client is making upwards of $50,000 a day, it’s going to take a lot shorter of a time to determine if a new strategy or a new tactic is working. If a client’s making $5,000 a day, it’s going to take more time to build up a strong case.
Marcus: So the data drives the decisions.
Marcus: Well, that sound means we’ve nearly reached the end of the program. Jerica, are you ready to play a portion of the program that we call the Marketing Minute?
Jerica: Marcus, I am so excited to play.
Marcus: Okay, so this is really simple. We’re going to rip through a series of questions, and you can tell us what the answers are for you. Jerica Reddig, Marketplace Advisor for Web Talent Marketing, are you ready?
Jerica: I’m ready.
Marcus: Okay. Question number one: Apple or Android?
Marcus: Ad blocker or no?
Jerica: Ad blocker.
Marcus: Email or text?
Marcus: Facebook or LinkedIn?
Marcus: Snapchat or Instagram?
Marcus: Steve Jobs, Elon Musk or Don Draper?
Jerica: Don Draper.
Marcus: Timex, smartwatch, or bare wrist?
Marcus: And finally, as it relates to your TV consumption, cord cutter or a cable-holic?
Marcus: Outstanding. Hey, thanks a lot, Jerica! Well, you been listening to The Revenue Stream from Web Talent Marketing, and today we’ve been speaking with Jerica Reddig. Jerica is a marketplace adviser for Web Talent Marketing, handling everything for Amazon and beyond for our PPC clients. Hope to see you next time around. Once again, this is The Revenue Stream from Web Talent Marketing.