As I noted in my last post on prep for Q4 on Amazon, inventory and operations will play a huge role in your ultimate holiday sales in 2020. Today, I’m turning to the other big piece that will be critical to your success this holiday: Amazon Advertising strategy.

Budgeting for Prime Day 2020 & Black Friday 2020 on Amazon Ads

In previous years, you’d increase your Amazon Ads budget for one or two weeks before huge Amazon shopping events like Black Friday/Cyber Monday (BFCM, or Cyber 5 including the weekend) or Prime Day, and again for one to two weeks after these events to capture the increased traffic.

In 2020, because of the impact of COVID-19 pushing shoppers to begin planning holiday shopping well ahead of previous years, we’re recommending a budget ramp-up period at least three weeks before and after the big sales events. With the rumored Prime Day in early October, you’ll want to plan far ahead with expected budgets, and then react to the data you’re seeing each week to adjust the plan as needed.

You can get a full schedule of suggested weekly and daily budget expectations in our customizable 2020 Holiday Shopping Planning Calendar for Ecommerce Marketers!

Additionally, you should plan to run at an elevated budget for the entire month of January to capture Amazon shoppers using gift cards from the holiday season, and use sales growth from the holiday this year to project how much higher it should be than last year.

Optimize Amazon Sponsored Products Ads to Battle Rising Costs

Historically, Sponsored Product Ads have been the go-to ad type to quickly scale product sales, but as things have settled in after the early stages of the pandemic, these CPCs have doubled or even quadrupled in some product categories. In response, many brands are shifting their strategy to invest where the traffic is less expensive – in Sponsored Brand and Sponsored Display ads. But, don’t panic! You’ll still need Sponsored Product ads, so don’t shut them off altogether, but the time is now to refine their targeting.

Optimization Tips for Sponsored Product Ads:

  • For automatic targeting, pull search term reports weekly to identify keywords and ASINs with high spend and no sales and/or a low CTR to add as negatives
  • Tools like Helium10 can be useful to help with competitor discovery for ASIN targeting, but make sure you’re either beating them on price or rating
  • Break out ad groups and new campaigns for keyword targeting and ASIN targeting
  • Add long-tail keywords in your manual targeting campaigns to maximize your budget, so you don’t cap early in the day
  • Amazon Sponsored Brand Ads

    Over the past few months, Amazon has made incredible progress on improvements to Sponsored Brand Ads. As always, you can direct traffic to your Brand Store or a list of your products with only your offers and no third-party offers. We highly recommended sending traffic to Brand Stores, where we’ve seen increases in conversions from 20-50% depending on the product category. Including lifestyle imagery with product listings on your Brand Store landing pages will help increase conversions by giving life to your product line.

    This approach to Sponsored Brand is becoming more popular, and CPCs are naturally rising here too. However, by expanding your ad creative types to things like custom lifestyle images and videos under 15 seconds, you can lower CPCs and delight more shoppers at the same time. To add them, you’ll want to start now. Approvals for them will take longer the further into the season we get, and testing in mid-September will allow you to exit the learning phase by the beginning of October and the possible Prime Day.

    Amazon Sponsored Display Ads

    Amazon has also been doing an incredible amount of work with Sponsored Display ads since the original launch in October 2019, so if you tried them before and stopped, we’d encourage testing again. Just check and the ASIN’s activated for it and update to ones that are driving the majority of recent revenue, or similar products to what drove the most revenue in Q4 2019.

    Product Attribute targeting will allow you to reach prospective customers based on your previous Amazon customers. Again, we’ve seen lower CPC for this targeting method, with a strong ROAS. This ad type allows you to target not only customers on Amazon, but off Amazon as well so you reach customers at different points in their journey.

    Amazon DSP Advertising

    Much like Sponsored Display, Amazon DSP will help you reach shoppers off-Amazon using audience characteristics that match your customer profile. Whereas Sponsored Ads focus on the low-hanging fruit of shoppers already in the search bar, one step away from making a purchase, DSP ads reach prospects that have not shown signs a purchase is imminent. Even so, reaching, engaging, and converting these audiences is important for your long-term growth.

    If you’re interested in launching Amazon DSP, you should do so ASAP, because it can take 60-90 days to gather learnings. During this time and beyond, it’s important to keep in mind that eventual purchases are still most likely to come from a Sponsored Brand or Sponsored Product ad, which will receive “credit” for the sale. The display ads served via DSP will have had some influence, and you can see its impact via related stats like branded searches.

    Obviously, there’s more to cover with Amazon Advertising strategy for the 2020 holidays than we can get to with a blog post, but we hope you at least found some ways you can expand your reach and exposure, lower your CPCs, and have a smashing holiday shopping season. For a full strategy and help making it all happen, you can always talk to our team!