Advertising on Amazon is a great way to drive sales. It's increasingly necessary for both vendors and sellers alike. In fact, Amazon keeps increasing the number of sponsored search results, which means a higher share of product page views come from ads. If your brand is not advertising, you could get left behind as competitors siphon off your traffic.
Most brands start by bidding on category keywords. These are generic words that describe your products (earphones, blanket, soap, etc.). There are a lot of resources online that can help you to find the right keywords and optimize your bids.
But there is a very special type of keyword to consider: your brand's keywords. Think for a moment about the name of your brand and the names of your products. Should you bid on these? Because Amazon will let you do it. What happens if you do? What happens if you don't?
Should you advertise on your own brand name?
In a perfect world, you shouldn't have to. If your product pages are properly set up (with your brand name as the first word of the title), they show up first in searches for your brand’s terms.
Additionally, advertising is not free. If you advertise products that were already doing well organically, you're essentially turning your margin into ACOS (advertising cost of sale). And paying for traffic you could get for free seems like a bad idea.
However, if you don't advertise on your brand’s name, you may face a few different problems, such as:
- The products that show up first are not your most profitable;
- New products with low sales velocity can take a while to start performing;
- Competitors may start bidding on your brand and steal the first few slots; and/or
- Competing products will make their way into the search results.
You may also have noticed that top brands are now sponsoring their own brand name. So what are the benefits of bidding on your own brand?
Sponsor your brand to control search appearance
By sponsoring your own brand, you get a lot of control over what your results page looks like.
Sponsored Brands is a type of Amazon advertising where a brand is featured on a banner-like ad. Unlike traditional banners, the three products displayed are dynamic. If your brand is present across several product categories, being a Sponsored Brand is an easy way to present your three bestsellers from across those categories.
In the example above, Nivea uses both Sponsored Brand and Sponsored Products for the "Nivea" keyword. This lets them introduce some messaging elements on the page ("Revitalize Your Grooming Routine") and choose three specific products to display above the fold.
Notice how they use it to promote a bestseller (Nivea Crème), a pack of two and a more profitable product, the gift set. The organic position of the gift set is 28th, so it does make sense for Nivea to bring it to the top.
The link in the banner ad leads to Nivea's custom brand store, which is a great way to promote the brand.
Brands that rely heavily on e-retail channels give up some control over their brand image. They have little say over the environment in which their products are displayed. Using on-site advertising is a way to keep driving brand equity in an e-retail context.
Sponsor higher-end products to upsell loyal customers
Shoppers who search for your brands are further down the sales funnel. They are much more likely to purchase from you than from a competitor. You can leverage this by directing them to your cash-cow products and not your loss leaders.
In the example above, Seagate promotes its higher-end IronWolf range above its more competitively-priced Barracuda range. This opens the opportunity to upsell loyal Seagate buyers into pricier product ranges.
Prevent competitors from stealing your customers
If your brand is popular, sooner or later, someone will take advantage of your success. Amazon does not explicitly allow brands to sponsor competitors' keywords. But they do seem to let it happen.
If you don't sponsor your own brand name, a competitor might. But there are a few things you should know. In our experience, advertising on a competitor’s name leads to low conversion rates. As Amazon Advertising is PPC (pay-per-click), your competitors will need to pay for a lot of clicks before they get a sale.
So really, this strategy is only viable if the bid cost is low, which is rarely the case when there is more than one bidder. When the bid cost rises, ACOS skyrockets and the strategy does not work anymore.
If your only concern is fighting off predatory advertising, all you have to do is introduce a low bid on your brand name. Most of the time, this should take the ACOS of your competitor to a level they cannot sustain.
Ramp up new products with sponsoring
Sales velocity is a big part of how Amazon's algorithm chooses which products to show first. When someone searches for your brand, your products are essentially ranked by sales velocity. This creates a chicken-and-egg problem when launching new products.
Achieving great product launches is key to driving profit in a competitive environment. You want to rack up as many sales as possible before the intra-brand competition kicks in and starts eating away at your margins.
In this example, GoPro bids on their newly released GoPro Max. The organic ranking for the Max is low on the second page, which is not where you want to see your newest release.
By sponsoring the first few weeks of a new product, you are actively ramping up its sales velocity. This will help it climb up the organic rankings. At that point, you can slow down on the marketing efforts and cash in on the profits.
In conclusion, bidding on your own brand may not seem ideal at first. But in some cases, it might be a good way to compensate for the shortcomings of a full e-retail distribution strategy. It can help you gain more control over your brand image, capitalize on your most loyal customers and achieve great product launches.