Digital MarketingEcommerceHow to make the most of your Amazon ad spend

How to make the most of your Amazon ad spend

US advertisers alone spent $7.41 billion dollars on Amazon advertising in 2018, which is a 122.6% increase YoY. Tips for maximizing that investment.

Confession: I have no idea where my moisturizer comes from. I’m a huge fan of Korean beauty brands, and once a month, I go to Amazon to order some eye cream in a tube shaped like a bear. When it arrives, the packaging is covered in writing I can’t read, so I just trust that it’s eye cream and not cake frosting based on my Amazon search, the number of stars the product page had, and the reviews that assure I will be getting eye cream and not buttercream.

I don’t think I’m alone in my habits either, which is why it’s critical to get your product to the top of search results using a combination of paid and organic media so that lazy shoppers like me will see it.

But the market is crowded: eMarketer estimates that US advertisers alone spent $7.41 billion dollars on Amazon advertising in 2018, which is a 122.6% increase year over year. That figure gives Amazon a 6.8% share in the US digital ad market – behind only Google and Facebook.

emarketer top companies ranked by US net digital ad revenue share 2019

With so many brands clamoring for such a small space, it’s important to understand exactly how to optimize your paid, owned, and earned media efforts (known in conjunction as the Amazon flywheel effect) in order to beat your competitors in a race to the top.

Content produced in collaboration with Merkle.

What is the Amazon flywheel effect?

The Amazon flywheel, as coined in Merkle’s “The Amazon Advertising Flywheel Strategy Guide,” is the combined effect of all your owned, paid, and earned media on the site. In essence, it is the cumulative impact of your efforts to get your brand noticed on your overall sales.

Here are the three main parts of the Amazon flywheel:

  1. Owned media: Owned media refers to all the information you include on your product pages to give audiences an idea of what your product is all about. This includes product descriptions, titles, bullets, and all those other little tools Amazon offers to make sure you let audiences know exactly what to expect from your product.
  2. Paid media: These are all those advertising products you buy from Amazon to make sure your brand comes up at the top of search results. This includes things like Amazon’s newest advertising offering, Search Ads, which allows businesses to expand the number of potential ad placements on the site by introducing new automated and manual bidding options.
  3. Earned media: This term refers to the culmination of your owned media and paid media efforts; it includes factors such as detail page sessions, conversions, customer reviews, and organic search ranking.

And if one part of the flywheel is off, the whole effort can fall apart.

It’s impossible to scale an Amazon business through paid search if owned media includes poorly written or incorrect descriptions. At the same time, even the best product page on Amazon probably won’t get much notice without a bit of paid media to raise awareness.

All the parts of the flywheel are interconnected. So here is a guide to getting all the parts in top working order.

Three steps to making the most of your Amazon ad spend using the flywheel effect

1. Make sure your owned media is informative

Before you can think about building effective Amazon ads, it’s critical to nail the pieces the company gives you for free. The secret to great owned media is threefold. First, make sure each one of your product detail pages makes it clear at a glance what you’re selling. Amazon customers have read all about scams on the site, fraudulent knockoffs or products that are different than what they claim to be, so they’re weary of new sellers. Professional, detailed product descriptions go a long way toward assuring customers they’re not going to be ripped off.

Second, if you’re a vendor or seller who manufactures your own product, make sure you register your brand. To enroll, you must have an active registered trademark, the ability to verify you have the trademark, and an Amazon account associated with Vendor or Seller Central. Once in the program, you gain access to tools that allow you to share authoritative product information with Amazon to proactively prevent violations and fraud.

Finally, make your Amazon Store a virtual showroom that’s every bit as inviting as a physical storefront by showcasing your brand and value proposition through lifestyle images and added content. It’s also a smart idea to organize products by category and subcategory pages to enable easy browsing for shoppers. Note here that brand registry is required in order to get access to Amazon Stores.

2. Boost your brand presence with paid media

Amazon says that the path to purchase for most customers isn’t necessarily linear, but instead typically occurs over series of inter-connected touch points across the Amazon marketplace. So it’s critical to make sure customers are seeing your product at every stage of their journey.

Through Amazon Search, there are three types of Amazon ads: Sponsored Products, Sponsored Brands, and Product Display Ads.

Here are the main differences.

  1. Sponsored Products: These ads use both keyword and attribute targeting (ASIN, category, and brand, prices, ratings, and reviews). They appear almost everywhere you look on Amazon, from the top of the page to below the fold as well as at the add to cart and checkout pages. They’ll take users to your product description page.
  2. Sponsored Brands: This type of ad is based on keyword alone and appears in search results at the top, left hand rail, or bottom of the pages. Sponsored brands will take users to your Amazon store, product page, or custom search results.
  3. Product Display: These ads are based on ASIN, category, or interests and appear alongside product details. They’ll take users to product detail pages as well. These ads are only available for Vendors.

3. Measure the Amazon flywheel effect through earned media

Even the most relevant, well-made Amazon ad won’t be all that helpful if your audience arrives to find your product page lacking in detail without any reviews or useful photo and descriptions.

Likewise, your perfect product page is wasted if no one ever sees it.

It’s true that polished owned media will most likely generate sales on its own. But generating earned media, layering on paid media to generate even more product detail views on your owned media, drives more sales and strengthens the visibility of earned media.

Combined, these efforts boost products in organic results and makes paid media even cheaper, allowing advertisers to spread marketing dollars more widely to capture even more customers. This loop continues to reinforce itself, pushing products upward in a virtuous cycle.

For more information on how to make your Amazon ad spend matter, download Merkle’s white paper “The Amazon Advertising Flywheel Strategy Guide.”


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