Amazon Marketing Services (AMS)Strategies and Guidance

EDITORSMARC AUFZUGDOMINIK BORS

MEMBER OF

Q1 2017

GO STRAIGHT PAST GO: MONOPOLY 2.0Why Amazon Marketing Services (AMS) is the new and improved Google AdWords, and how brands and manufacturers can secure the key competitive advantage.

ENG

Contact details

factor - a

The Global Marketplace Group GmbH

Brüsseler Str. 89 – 93

50672 Cologne, Germany

Telephone + 49 221 177 337 10

Email info@factor - a.com

TABLE OF CONTENTS

Preface ..................................................................................................................................... 3

About factor - a – The Global Marketplace Group ............................................................................ 4

About the Editors ....................................................................................................................... 5

About the Author ....................................................................................................................... 6

CHAPTER 1 AMS: Properties, Houses and Hotels ............................................................................ 7

CHAPTER 2 Amazon Marketing Services: Three Types of Advertisements for Maximum Success ........... 14

CHAPTER 3 How to Strategically Utilise AMS Advertising Campaigns .............................................. 23

CHAPTER 4 Tactical Tricks with AMS Products .............................................................................. 36

CHAPTER 5 The AMS Rocket ..................................................................................................... 43

Expert Interview ...................................................................................................................... 44

3

PREFACE

Amazon Marketing Services is currently the most effective

digital marketing tool.

Today, the greatest percentage of product searches on the internet starts

at Amazon, while Google increasingly loses ground. That makes Ama-

zon the #1 search engine when it comes to shopping. The majority of

Germans have an Amazon account and an ever - growing amount of on-

line shoppers purchase their products on Amazon several times a month

via Prime. If product searches are mostly conducted on Amazon and

Amazon concurrently attains the highest conversion rates, then the log-

ical conclusion is that sales and marketing budgets are most effectively

spent right there. Via Amazon Marketing Services and its various forms

of advertisements, manufacturers and brands present themselves exactly

where customers get their information about products – and purchase

them. At the same time, Amazon Marketing Services is still in its infan-

cy, like Google AdWords and other online marketing methods from the

early 2000s. Manufacturers who get involved right at the beginning and

position themselves professionally obtain a significant competitive ad-

vantage, secure the relevance of their brand and instantly increase their

e-commerce sales.

Go straight past Go! factor - a will show you how it works.

Yours truly,

Marc Aufzug,

Marc Aufzug, CEO of The Global Marketplace Group GmbH

Marc Aufzug

CEO of The Global

Marketplace Group

4

ABOUT FACTOR - A – THE GLOBAL MARKETPLACE GROUP

factor - a is part of The Global Mar-

ketplace Group GmbH (TGMG)

and councils manufacturers and

brands in every operational as-

pect of sales increase, brand lea-

dership and quality management

on Amazon. factor - a is the leading

consultancy firm in this field and

describes its own approach as

holistic, international and techno-

logy driven. Holism comes from

the synergy of product data and

Contact details

factor - a – The Global Marketplace Group GmbH

Brüsseler Str. 89 - 93 | 50672 Cologne, Germany

Telephone + 49 221 177 337 10

Email info@factor - a.com

Visit www.factor - a.com and www.tgm.group

content optimisation (MPO), mar-

ketplace advertising (MPA) as well

as the entire data-driven account

management (MPI). Operational

excellence across all three areas

leads to a genuine competitive

advantage and thus to a signifi-

cant increase in sales on Amazon.

factor - a offers all its services for

every relevant language region,

provided by native speakers on site

in Cologne. Additionally, factor - a

realises technological solutions in

the context of Amazon with its own

team of developers and thus gives

manufacturers and brands a head

start.

Under the umbrella of TGMG,

brand manufacturers can also

profit from specialised full-service

Marketplace Management on eBay

as well as on the Chinese online

marketplaces JD and Tmall via the

subdivisions factor - b and factor - c.

Nils Zündorf Head of Paid Advertising

Speak with the authorSchedule a free phone consultation today!

+ 49 221 177 337 10

info@factor - a.com

5

ABOUT THE EDITORS

Marc Aufzug is an executive director of The Global Marketplace Group

GmbH and a consultant for manufacturers and brands regarding operatio-

nal marketplace management on Amazon via the business division factor - a.

Marc has long - term entrepreneurial experience and expertise in the fields

of e-commerce and agency setup. By means of more than eighty successful

consultancy projects in the areas of Amazon content optimisation, e-com-

merce marketing (Amazon Marketing Services, among others) and Ope-

rational Excellence in continuous growth management, he and Dominik

Bors have established factor - a as the leading service provider in supporting

brands and manufacturers on Amazon.

Dominik Bors (qualified computer scientist) is an executive director of The

Global Marketplace Group GmbH and a consultant for manufacturers and

brands regarding operational marketplace management on Amazon via the

business division factor - a. Dominik has long - term experience and expertise

in the setup of software development teams, in the field of e-commerce and

in entrepreneurship. factor - a considers itself a technology partner with a fo-

cus on scalable and data - driven solutions for manufacturers and brands on

Amazon. The technology - based counselling process is the foundation for

sustainable growth in online marketplaces.

Marc Aufzug

marc.aufzug@factor - a.com

+ 49 221 177 337 10

Dominik Bors

dominik.bors@factor - a.com

+ 49 221 177 337 10

6

ABOUT THE AUTHOR

Nils Zündorf manages the Amazon marketing division of factor - a. For

more than ten years, he has acted as a consultant and specialist in

e-commerce, especially concerning the development and scalability

of paid advertising campaigns. Doing so, he interconnects the startup

culture with the corporate world, online with offline businesses and

new paths with established patterns. With his focus on online market-

ing and customer touchpoints, he pursues the objective of making the

most of every single penny – regardless of the available budget. With a

degree in Business Information Management, he is able to reinforce his

concepts with respective technological frameworks and thus can de-

monstrably achieve recurring and persistent successes for his clients.

He is particularly interested in the marketing channels and campaigns

which are continually optimised and fostered, like Amazon Marketing

Services and the Amazon Advertising Platform.

Nils Zündorf

Head of Paid Advertising

nils.zuendorf@factor-a.com

+ 49 221 177 337 10

7

CHAPTER 1 AMS: PROPERTIES, HOUSES AND HOTELS

What Amazon Marketing Services has in common with

the real estate industry

“They really made a good bargain

back then. Now their flat is worth

double what they paid!”

“I should have nabbed that place

when it was still cheap…”

“I know it’s too expensive, but we

had to buy it quickly before the

price went up even further.”

Who has never heard these sen-

tences in a circle of friends and

acquaintances? Real estate prices

are constantly soaring, for several

reasons: not enough properties

are available on the market, rent is

increasing and other investments

are not as profitable anymore.

More and more, the acquisition of

property is considered to be the

only reasonable option – even if

the prices are already steep. Con-

sequently, prices will continue to

rise even further, which will in turn

fuel the entire process. It is no co-

incidence that the media frequent-

ly utilises the metaphor of the

game of Monopoly in its myriad of

reports about the rising real estate

prices. If you take a look at the de-

velopment of Google AdWords,

a similar structure becomes appa-

rent: as Google soared to beco-

me the indisputable global mar-

ket leader of search engines in

the early 2000s, the competition

and thus the prices for Google

advertisements increased to the

same extent. Suddenly, classified

advertisements became highly

competitive for many keywords

and had to be bought due to the

ever - advancing cost per click. The

supply – in this case, the number

of relevant keywords for a specific

product, service or information

– remained constant despite the

increasing demand. Subsequent-

ly, the prices for keywords such as

holiday and life insurance were so

expensive that booking them only

made sense in a few business mo-

dels.

Nowadays, companies and

corporations – just like real estate

buyers in German metropolises –

must draw up huge budgets and

pay the proverbial heavy price for

Google AdWords campaigns. You

cannot blame real estate buyers

for wanting to turn the clock back

ten years. They wish they were

at the beginning of the 2000s

when entry level prices were still

affordable and they could build

a solid competitive position from

that foundation. The players long

for a situation that is similar to

that at the beginning of a game

of Monopoly, when properties are

cheap, income comes from rent,

property colour groups are attain-

able and the financial foundation

for building houses and hotels is

laid.

It is exactly this situation and

unique opportunity in e-commerce

and online marketing that is now

available for brands and manufac-

turers on Amazon. Search engine

marketing is the most promising

marketing channel because the

potential buyer is confronted with

a tailor-made advertisement in

the moment of a consumer’s max-

imum willingness to purchase. The

success of Google AdWords rests

exactly upon this principle. How-

ever, the ever-growing numbers of

product searches (or transactional

searches) are no longer conduct-

ed on Google, but rather direct-

ly on Amazon. Today, Amazon is

the #1 product search engine in

8

the US. When brands and manu-

facturers address their potential

customers here – in the search re-

sults on Amazon – the probability of

purchase is exponentially higher

and unmatched – neither by retail

shops nor by other e-commerce

platforms. Amazon SEO has sup-

planted Google SEO and Amazon

Marketing Services is supplanting

Google AdWords. The difference

is that the companies now hold the

cards: due to the similarities bet-

ween Google AdWords and AMS,

brands and manufacturers can an-

ticipate future developments and

avoid mistakes made in the past.

The cost per click within Amazon

Marketing Services is still consi-

derably cheaper than within the

Google Ads system. If brands and

manufacturers utilise Amazon

Marketing Services efficiently, they

will also achieve a better position

in the “free” organic search results

and thus procure the competitive

advantage in the long run. It is

almost like being able to buy rea-

sonable flats in Hackney, London

again.

Why AMS is going to become

the next Google AdWords

How can Amazon attack Google’s

supremacy in search engine adver-

tising (SEA)? The simple search

entry field below Google’s colour-

ful logo seemed to be the unrival-

led gatekeeper to the internet a

few years ago. It answered every

question one could think. It has

even become its own verb – “to

google”– which is used when look-

ing for information and content

on the internet. This is the cross-

road where a new junction has

been formed. While content and

information are still searched via

Google, Amazon is already the #1

player when it comes to product

searches. Customers have learned

that Amazon’s assortment is uni-

versal and it provides the most

comprehensive range of products

including information and reviews.

Amazon gives customers informa-

tion about whether a product is

available and which price range is

realistic.

Amazon benefits threefold

from this development. Firstly,

sales numbers increase because

Amazon’s assortment often has the

best value for money. Secondly,

modified search behaviour boosts

customer loyalty. Amazon shop-

pers have complete faith in the

site and have stopped checking

other offers. Lastly, this growing

supremacy gives Amazon the op-

portunity to harvest a new revenue

stream: the more Amazon is used

as a search engine, the higher the

value of the advertising spaces. For

advertising corporations, brand

manufacturers, as well as for re-

tailers, Amazon Marketing Services Where did online product searches start in 2015 and 2016: Amazon dominated 55% of product searches. Source: BloomReach survey, 2016

Where do online product searches start?

0%

40%

70%

2015 2016 2015 2016 2015 2016

Amazon Search engines Retailers

55%

28%

16%

44%

34%

21%

9

is emerging as a welcome and

attractive alternative to the simi-

lar infrastructure that helped Ad-

Words strike gold for Google.

Like Google, but more

powerful

Regarding structure and imple-

mentation, Amazon’s AMS is quite

similar to Google AdWords. Ad-

vertisements based on keywords

are displayed prominently above,

in between or under the organic

search results. Advertisers only

pay when customers click on their

ad. A budget is drawn up and

the advertising spaces are then

sold per keyword via a bidding

process. Although the process

sounds like Google’s, advertising

via AMS have at least one crucial

advantage: the majority of those

searching on Amazon already have

a clear disposition to buy, are regis-

tered users, and have had positive

purchase experiences on this plat-

form. Thus, the trail from search-

ing – via the search results – to the

shopping cart is considerably

shorter than it is on Google, where

customers might be led to an un-

familiar online shop and must first

register or create a new account.

The conversion rate, i.e. those who

actually make a purchase after their

visit, is considerably higher on

Amazon than with traditional Ad-

Words marketing and its respec-

tive online shops.

The Monopoly Venture:

act early

Amazon Marketing Services (AMS)

as a search marketing channel is

still in its initial stages of develop-

ment, but Amazon is pursuing a

leading role in paid advertising.

It was already deemed compe-

tition by Google’s former CEO,

Eric Schmidt, back in 2014: “Our

biggest competitor in search is

Amazon.” This game of Monopoly,

which becomes apparent in light

of the past AdWords boom, is still

up in the air, and the competition

for advertisements on Amazon is

still low. However, the game has

already begun. For the first time,

manufacturers and vendors can

be locked into a single corpora-

tion not only through sales, but

also through marketing activities

as well. This is due to the fact

that potential competitors – other

e-commerce platforms with mar-

keting ambitions – are choked off

by Amazon’s purview and infra-

structure, in the same way Google

outstripped Yahoo and AltaVista,

among others.

It is understandable that brands

and manufacturers intuitively hes-

itate at the idea of exposing them-

selves to this kind of market power.

At the same time, however, this de-

velopment is set in stone and from

the digital developments of the

past, one can draw the conclusion

that the perfect moment to deal

with issues has already passed.

The competition has already start-

ed gathering pace. Established

brand manufacturers who under-

estimate the importance of this

particular issue will have to accept

heavy losses later on, caused by

faster competitors and newcomers.

Presently, there is still precious el-

bow room: manufacturers and ven-

dors can increase their sales for a

relatively low price, and also bet-

ter their Amazon search algorithm

ranking and acquire strategic

know-how for the upcoming revo-

lution in e-commerce marketing.

In today’s e-commerce environ-

ment, scaling a company while in-

creasing profitability can best be

done through AMS. To use the

Monopoly analogy: the properties

are currently being sold and the

first rental income has been gener-

ated, which in turn is being invest-

ed to build houses and saved

for later use on hotels. In many

categories, Google has already

expended itself in terms of price;

Amazon, on the other hand, still

has lots of attractive categories

with affordable keywords and little

competition. Therefore, enormous

impacts can be yielded with very lit-

tle budget, especially when it comes

to new product line launches. Po-

tential shoppers are addressed

where they frequently search for

products and where their data is al-

ready on file. Another good reason

10

for acting now is Amazon’s increas-

ing growth rate, which is not likely

to subdue in the coming years.

Since a higher number of people are

using Amazon as a product search

engine, more customers translate

to an increase in sales.

The AMS Fund: visibility,

turnover and knowledge

How do I increase the visibility of

my products on Amazon? What

can I do immediately to have a sig-

nificant increase in sales? Which

keywords work especially well and

should be integrated into the con-

tent of my product? All these ques-

tions can be answered by using

What is ACoS?

ACoS (“Advertising Costs of Sales”)

is the proportion of advertising

costs for a certain campaign or key-

word and the Amazon sales gener-

ated with it.

Attention!

The costs of sales calculated by

Amazon (“Advertising Costs of

Sales” or ACoS) refer to the sticker

price (incl. VAT), not the purchasing

price Amazon pays the manufac-

turer. If manufacturers within the

vendor program do not take this

difference into account, AMS data

can appear distorted. (For more

information see Chapter 4, Step 2:

Analyse and continuously optimise).

Amazon Marketing Services. AMS

enables brands and manufacturers

to quickly resolve the most relevant

issues of their Amazon activities,

which is crucially important for

staying in the game. For one, ma-

nuf ac turers c an learn how to

precisely control their sales via

Amazon search ads. Secondly,

AMS users can become more in-

dependent of the organic search

results on Amazon. Brands and

manufacturers can still quickly

and signif icantly increase their

visibility in organic search results

through search engine optimisa-

tion on Amazon (“Amazon SEO”).

Even if content is the basis for

successfully selling on Amazon,

this alone will not be sufficient in

the future to differentiate oneself

from the competition.

Equally important is the edge

in experience and knowledge

that AMS provides: Corporations

which learn their lessons with Ama-

zon Marketing Services early and

optimise their budget according-

ly, will have already advertised

successfully and profitably when

competitors start using AMS. To

use the Monopoly analogy once

more: the capital for more dif fi-

cult times must be saved up early.

When all the properties of a colour

are sold, they can be built upon,

while late entrants pay high rents

and can only purchase single pro-

perties.

The Main Pillars in the Amazon

Marketing Mix: AMS and AAP –

the perfect instruments for an

increase in sales, visibility and

external traffic

As Amazon Marketing Services is

still a young marketing tool, corpo-

rations can currently increase their

chances and shares within a grow-

ing market for a relatively small

price. No other marketing tool on

Amazon has such a profound im-

pact on sales and turnover.

In addition to Amazon Market-

ing Services, Amazon provides

a variety of other marketing op-

portunities – from automatized

mailings to certain Amazon target

groups (Email Marketing) via dis-

play marketing campaigns control-

led by Amazon and individualised

shop websites (“Brand Shops”)

to the so-called Vine programme,

with which manufacturers and

brands generate customer reviews.

Another milestone in online

marketing, and the entire field of

media, is the recently launched

Amazon Advertising Platform

(AAP), which provides the oppor-

tunity to individually and specifi-

cally modulate display campaigns

and scope campaigns. Via AAP,

advertisers can access Ama-

zon-owned inventory, like the

Amazon platforms (i.e. amazon.

com), Kindle or FireTV, as well as

all relevant display networks wor-

ldwide. The revolutionary part of

1111

AAP is that media range relates to

Amazon’s anonymous user data.

No other company has better and

more accurate information on the

buying behaviour and interests of

online shoppers around the globe.

This opens up new horizons of ran-

ge and visibility in e-commerce and

will permanently change the who-

le media and display marketing

sectors. By relating media reach to

this data treasure, the efficiency of

display marketing campaigns can

be elevated to a whole new level.

Via the Amazon Advertising Plat-

form, brands and manufacturers

can specifically book marketing

slots to advertise to target groups,

thus driving external traffic to their

product detail pages on Amazon.

This simply means that media

budgets can be used much more

efficiently, measurably and directly

for the sale of products on Ama-

zon. The enormous potential that

AAP has to offer is still, like Ama-

zon Marketing Services, in its in-

itial stages of development. The

specific applications and functio-

nality of the Amazon Advertising

Platform will be thoroughly dis-

cussed in the next white paper.

The Objective: Quick first

steps and strategic setup

Amazon Marketing Services cur-

rently is to the e-commerce busi-

ness what urban districts like Kreuz-

berg, Berlin or Hackney, London

were to the real estate industries

at the turn of the millennium, a rela-

tively unknown area with enormous

potential. Today, real estate in these

districts is comparable to certain

keywords in Google AdWords:

The Amazon Advertising Platform (AAP) combines the full media range with Amazon’s user data. Source: Own illustration

Amazon Advertising Platform (AAP)

Access to premium content (Amazon and all other

premium content sources)

Exclusive Amazon first -party data and cross device ad targeting

Amazon Advertising Platform (AAP)

12

they are overpriced and thus far from

being efficient. At the turn of the mil-

lennium, some people recognis-

ed the charm and future value of

a flat in an old building in need of

redevelopment and jumped into

uncharted waters. The modest

prices allowed them to buy real

estate and to learn which were

profitable and where demand was

high. In the field of Amazon Marke-

ting Services, the relevant keyword

can only be bought temporarily.

Therefore, it is key to test and filter

out the most profitable options.

Testing search terms on Amazon

occurs currently within a relatively

keen market environment, which

translates into being able to take

on the competition with the advan-

tage in knowledge and optimised

listings.

Selecting the best keywords,

whose value will increase later on,

for a specific product is a multi-

layered process. Corporations

should keep an eye on how they

allocate resources to have the best

possible impact in the short term.

Even more important is setting the

course for being well-positioned

compared to one’s competitors.

When you own complete colour

groups in Monopoly, you can build

houses and hotels on them and

make your opponents pay up. The

same applies to AMS: worthwhile

investments are now being made

in the form of improved organic

search result rankings. If you have

the best performing keywords, you

can strain the competitor’s results.

Which strategy is best to start

with, what corporations should

keep in mind and which objectives

are realistic will be discussed in

the third part of this white paper.

Furthermore, success stories from

the field will be presented before

elaborating on tactics for the day-

to-day work with AMS. We will also

provide detailed tips and tricks on

how brands and manufacturers

can successfully integrate these

ideas. The following chapter will

comment on the various types of

ads included in Amazon Marketing

Services.

13

The positioning of Sponsored Products, Headline Search Ads in the search results and Product Display Ads on the product detail page (f.l.t.r.). Source: Amazon

CHAPTER 2 AMAZON MARKETING SERVICES:

THREE TYPES OF ADVERTISEMENTS FOR MAXIMUM SUCCESS

The Structure of Amazon Marketing Services

Amazon Marketing Services (AMS)

mainly consists of three different

display types, all of which fetch the

customer in various stages of the

search and buyer decision process:

• Headline Search Ads (HSA)

• Sponsored Products (SP)

• Product Display Ads (PDA)

Headline Search Ads are presented

to the customer at the beginning of

the buyer decision process and en-

able the advertiser to inform custo-

mers about the brand and to lead

them to a specific land-ing page.

One step further in the buyer‘s deci-

sion process, Sponsored Products

Ads are listed next to the organic

search results. They are the equi-

valent to classified advertisements

on Google and the only thing dis-

tinguishing them from the orga-

nic search results is the tiny hint

“Sponsored Product” or “Sponsor-

ed” above or below the ad. SPAs

are the most ef fective display

type when it comes to increasing

sales on Amazon, since the promi-

nent placement of a product can

be achieved independently of

the organic ranking. Both Headline

Search Ads and Sponsored Pro-

ducts Ads are based on keywords.

On individual product detail

pages – i.e. at the end of the buyer

decision process – Product Display

Ads can be utilised. These are ban-

ners which are mostly displayed

above or below the Buy Box or at

the bottom of the product detail

page. In this case, potential custo-

mers are not directly addressed

within the search process, but

rather immediately before the pur-

chase decision. This display type

is best suited for cross-selling and

up-selling within a particular pro-

duct range – or, alternatively, to

advertise your products on your

competitor’s product detail pages.

Whereas Sponsored Products

and Product Display Ads are linked

to a specific product detail page,

Headline Search Ads can lead to

three different pages: a product de-

tail page, a targeted selection of

14

products – i.e. a brand page or a

best-sellers list, or another web

page defined by the advertiser

inside of the Amazon ecosystem.

Thus, an individual list of search

results with in-house products, as

well as a brand page, can be hy-

perlinked. Moreover, customers of

Amazon Marketing Services (AMS)

can be directed to a specifically

designed campaign page, the set-

up for which is complimentary.

There are templates available

for presenting complete product

lines in a visually pleasing manner,

as well as text intensive options,

which are best suited for longer

brand and product descripstions.

Consequently, it is not only

important to completely com-

prehend the respective display

types within AMS and to apply

them purposefully, but also to link

the most suitable landing page

with its respective product detail

page. Corporations which want

to make potential customers awa-

re of their brand should choose a

combination of relevant keywords,

coordinated Headline Search Ads

and a visually appealing campaign

page. Companies which want to

drive the sales of a certain product

should, on the other hand, adver-

tise this specific product by means

of Sponsored Product Ads.

Best Practice

The landing page of the Headline

Search Ad (HSA) should be tailored

to the exact wording of its respective

keywords. HSAs booked on general

keywords like “Speedo” or “Lego

toy” should, for example, be linked

to an overview page, like the brand

or campaign pages.

Meanwhile, HSAs booked on more

specific search terms like “Speedo

bathing suit” or “Lego castle” should

at best drive customers to a page

with an overview of the respective

products or even to one specific pro-

duct detail page.

Display Types Sponsored Products Headline Search Ads Product Display Ads

CostsCost per click,

Auction principleCost per click,

Auction principleCost per click,

Auction principle

Display ConditionsBased on keywords or auto-

mated output by AmazonBased on keywords

Based on target groups, categories or ASINs

Ad locationAbove or beneath the

organic search results & on product detail pages

1 Ad above the search results page

Ad beneath or next to the Buy Box; banner on

the search results page

Customisable noLogo, title and ad copy; up to 3 product images;

landing pageLogo, title and ad copy

Ad Efficiency

Advertising-Sales Ratio (ASR)

AMS Display Types at a Glance

AMS display types at a glance – Sponsored Products have the best advertising-sales ratio (ASR). Source: Own illustration

15

This secures them a good rank-

ing while using a few important

keywords to guide the customer

directly to the respective product

detail page. A matrix of the most im-

portant strategic objectives and

the associated AMS activities will

be presented in Chapter 3. The

campaigns are sold by means of

an auction principle which is quite

similar to the one used by Google

AdWords: Advertisers place

a cost per click bid on a specific

advertising space. On the basis

of the chosen maximum bid – and

other factors, including relevance

and availability – Amazon decides

when and where the advertise-

ments will actually be displayed.

Campaigns can be set up starting

from a budget of 100€ or a daily

limit of 1€. We recommend a me-

dium four-figure budget, depen-

ding on the product category and

the range of goods, as a starting

point, which provides the oppor-

tunity to test and optimise diffe-

rent campaigns and thus to attain

the necessary knowledge about

the performance of isolated cam-

paigns.

Hereafter, we are going to take

a closer look at the three display

types. Plus, we are going to dis-

close best practice tips for the set-

up and adjustment of the individu-

al display types. It should be noted

that the optimisation of the product

data and the content should al-

ways precede the maketing activi-

ties on Amazon. Products that are

being advertised through AMS

should already have optimised pro-

duct titles, feature bullet points,

product descriptions, images and

keyword sets. Otherwise, enor-

mous potential and the advertising

budget are wasted. Another thing

that can increase the conversion

rate significantly is A+ content,

which is an enhanced product de-

scription with rich images, charts

and narrative copy. Likewise, you

should check customer reviews

and answer customer questions to

help shoppers make an informed

buying decision and to increase

your conversion rate. Poorly rated

and displayed products adverti-

sed within the context of AMS are

not very efficient and – at worst

– for nothing because customers

addressed via display ads are very

likely to turn away from a poor pro-

duct detail page. In these cases,

the conversion rate is very low and

the just campaign was for nought.

Headline Search Ads

Headline Search Ads are displayed

directly beneath the search bar

and above both the organic search

results and the Sponsored Prod-

ucts, which makes these ads the

high-end real estate of all the dis-

play types.

HSAs provide the opportunity

to select an image as well as an ad

copy of one’s choice. The ad copy

can be phrased according to a cer-

tain target group, which usually in-

creases the click-through rate (CTR)

significantly. Advertisements with

an extremely low CTR (ca. 1%) with-

in a certain campaign will be cut

off by Amazon and cannot be acti-

vated again. Headline Search Ads

are eminently suitable for brand

promotion and using them makes

the most sense in cases when the

shopper has not yet voiced their

preference for a particular brand.

When customers are looking for

“sunscreen,” they most likely do

not have a specific manufacturer

– much less a certain product – in

mind. Due to its prime location,

the prominent positioning of this

display type is best suited for draw-

ing the attention of the potential

customer.

Apart from a product image

and a brand image on the left side,

as well as a customised ad copy,

three products from the product

range can be selected to be dis-

played in the HSA.

Best Practice

The different AMS display types can

be booked for the same keywords si-

multaneously. Since the campaigns

within the same account do not

compete, one can easily experiment

which approach and which display

type yields the best results.

16

After clicking, the user is unre-

strictedly forwarded to a favou-

red landing page within the Ama-

zon cosmos. It is necessary for at

least three products to be fea-

tured. Otherwise, Amazon will not

allow you to start the campaign

or will stop it if less than three are

shown. This way the target is a

pre-filtered search results page,

a specifically designed campaign

page or an already existing brand

shop. Headline Search Ads, which

also display individual products, al-

low the advertiser to provide up to

four different links. Apart from the

link redirecting the customer to a

specific brand shop or campaign

page on the left side of the adver-

tising space, the user can get to the

product detail pages of every sing-

le product being promoted in the

respective Headline Search Ad.

HSAs can only be displayed for

specific long tail keywords or pre-

cisely matching search requests.

Unlike Sponsored Product Ads,

they cannot be automatically dis-

played by Amazon, which means

that advertisers have to custo-

mise their HSAs. On the upside,

Amazon does provide related

search terms with appropriate

search volumes in this format,

making the creation of a wide-

coverage keyword set quite easy.

Best Practice

Currently, Amazon disregards word

variants!

Thus, advertisers must enter varying

terms manually and possibly even

have to defer to common misspel-

lings within a product segment.

Apar t f rom the word “vacuum

cleaner,” it is worth including re-

gional versions like “ hoover,” as

well as terms l ike “vacuum” or

“vac” in the campaign.

Example: Headline Search Ad

The Headline Search Ad for the keyword “cat food” using the example of Whiskas – customised ad copy as well as three freely selectable products. Source: Screenshot Amazon

17

As mentioned, HSAs are very

popular and thus often on. There-

fore, keywords which do not

match the HSA perfectly can lead

to unprofitable campaigns. For

this reason, the start of a HSA

campaign should always follow

a detailed analysis of the imple-

mentable keywords.

The advertising spaces for this

display type come at a premium.

Consequently, Amazon cycles

through various campaigns, up

to four, at a time. Additionally,

Amazon provides an indicator

for the minimum bid price on the

most popular keywords, which

displays the correlation between

the bid price and the frequency

with which the advertisement is

displayed.

Brand manufacturers

in a tight spot

Headline Search Ads have strate-

gic significance for brand manu-

facturers. The prominent position-

ing of these ads creates fantastic

opportunity as well as the biggest

risk. Manufacturers are increasing-

ly compelled to create Headline

Search Ads for their own brands

and use product line keywords

before their competition has the

same idea. Apart from attracting

new customers and introducing

product innovations, this display

type is well-suited for protecting

one’s own brand. Manufacturers of

sunscreen can, for example, occu-

py brand-oriented keywords such

as “Nivea sunscreen” or “Garnier

sunscreen” to ensure that shoppers

looking specifically for that brand

are led directly to their own pro-

ducts without getting distracted.

Nonetheless, advertisers should

also increase their range by inclu-

ding occasion-related and brand-

oriented keywords. As a result of

the current negligibility of the

competition, cost per click bids of

only a few cents can already yield

enormous results. The current

cost-benefit-ratio of this display

type is very positive, especially

for high-potential niche brands

which still snatch an exceptionally

low ACoS for their respective se-

arch terms. Since sellers also have

their foot in the game by using

HSAs, the cost per click of this

display type will probably rise in

the future.

Sponsored Products

This is the AMS display type

which can be utilized by both ven-

dors and sellers. Sponsored Prod-

ucts is the crown jewel of Amazon

Marketing Services – or, to use the

Monopoly analogy again, it is the

most profitable short-term proper-

ty in the game. Of all the ad types,

this is the one that is displayed

most often. The great part about

these ads is that they are displayed

like the organic search results – the

only difference being an unobtru-

sive “sponsored” tag in grey let-

ters. Many users and customers do

not even realize these display ads

are advertisements. If the selec-

tion of relevant keywords fits their

search criteria, customers will un-

knowingly allow an advertisement

to influence their purchase. If ap-

plied correctly, Sponsored Prod-

ucts is certainly the high-selling dis-

play type within the AMS portfolio.

Sponsored Product campaigns can

be set up manually by the brand

manufacturer or automatically by

Amazon. In the case of automatic

campaigns, algorithms allocate

an advertisement’s respective

keywords. The manual control, on

the other hand, allows for a precise

displaying of the ads matched to

certain search terms. Both cam-

paigns can run simultaneously.

The likelihood of these ads

being displayed in the organic

search results can be increased

by adjusting the bid prices. Bid+

allows for additional bidding on

ads with the best positions above

the search results. In the real esta-

te industry, this is comparable to a

well-situated property in the prox-

imity of local transport and shops.

Another important location for this

display type is on the individual

product detail pages where Spon-

sored Products Ads are embed-

ded in the recommendations

(“Sponsored products related to

18

this item”). Analyses show that ads

on product detail pages represent

a significant part of the turnover,

especially when they are auto-

matically displayed by Amazon.

Great purview and intense

competition

When the price and the reviews of

promoted products are compel-

ling, Sponsored Product ads – with

their various possible positions

taken into account – provide an

enormous product presence with-

in the organic search results. Poten-

tial customers who are presented

products independent of a brand

are more likely to click on the ad

because they perceive it as an or-

ganic search result. This advantage

has its own drawbacks as it great-

ly influences the cost per click.

Sponsored Products is undoubt-

edly the AMS display type with

the most intense competition for

the hottest product segments and

Sponsored Products within the “pen” category. In this case, there are actually three Sponsored Products above the organic search results and several on the side. Source: Screenshot Amazon

Best Practice

The keywords won in automatic cam-

paigns can be integrated and further

optimised in manual campaigns.

Amazon then automatically and

autonomously takes over the basic

keyword research.

The respective search terms should

also be designated to the appropri-

ate product detail pages to increase

the relevance of these listings.

Example: Sponsored Product Ads

19

keywords, particularly since sellers

can also participate in the bidding

with attractive individual offers.

The best-placed bids (resp. Bid+)

should nevertheless only be tested

within campaigns with empirically

established figures to guide the

decision if an additional invest-

ment, based on reference values,

is worthwhile. In our tests, Bid +

always leads to better results

because the conversion rate of

the top placed products was sig-

nificantly better, which also increa-

sed the ACoS. Here, a bidding war

can be triggered very quickly, the

result of which nobody will like.

Similar to the Headline Search

Ads, Sponsored Products can be

utilised either defensively or of-

fensively. If you do not bid on the

relevant keywords for your brand,

remember that in many cases the

competition will try to steal your

potential customers by occupying

keywords relevant to your brands.

The grass is certainly greener on

the other side; however, keep in

mind that stealing customers away

from your competition by using

the same approach could actually

backfire. The extent to which this

is a profitable approach should be

evaluated in each case by means of

a potential analysis.

Sponsored Products Ads are

especially advantageous when it

comes to increasing sales of newly

introduced products or those with

long standing low rankings. Not-

withstanding new or previously

disregarded listings, this type of

display helps products reach top-

listing status, thus improving their

visibility and increasing their sa-

les. Moreover, it is a convenient

tool for finding the hidden top-

sellers in a specific product ran-

ge: if f ive products undergo a

Sponsored Product treatment

under equal conditions, some

of them yield better results than

others, even though they have

the same budget.

Within the scope of a so-called

twister, i.e. the bundling of sever-

al versions of a product onto one

product detail page, those pro-

duct versions can all be promo-

ted with a single advertisement.

Twisters increase the chance

that potential buyers f inding

their preferred produc t and

thus decreases the number of

users backing out of the purchase

process.

Best Practice

Defensive and offensive campai-

gns should be set up separately

from other campaigns so that the

Average Cost of Sales (ACoS) can

be evaluated according to its re-

spective objective.

Product Display Ads

The appearance of a Product Dis-

play Ad is extremely customisable

and enables advertisers to address

potential customers in a later stage

of the buying decision process.

PDAs are currently only available

to vendors, not to sellers. Nor-

mally, they are displayed directly

beneath or next to the Buy Box on

a product detail page, but a spot

under the navigation menu on the

search result page is also possible.

The strength of this display type

is that Product Display Ads draw

the interest of potential customers

already interested in the product.

Visitors to a product detail page

whose eyes are wandering towards

the Buy Box have clear intentions.

Since they are already planning on

buying specific product, shoppers

could also perceive these display

ads as a mere distraction and over-

look them completely.

Product Display Ads are the

only display type within the AMS

portfolio to provide the opportuni-

ty to address target groups inde-

pendently of their current online

search and the product detail page

they are momentarily on. There are

three options available: they either

address a previously defined tar-

get group (“interest-based target-

ing”), or a specific product (“pro-

duct targeting”) or target a whole

category.

20

For interest-based targeting,

Amazon uses the purchase history

as well as the general surfing be-

haviour of its users and visitors.

Thus, very nuanced target groups

can be selected and combined

when setting up a campaign. Un-

fortunately, these previously de-

fined target groups are a black

box, meaning that only Amazon’s

algorithm knows how visitors have

been allocated to the various tar-

get groups. Likewise, the surfing

and purchasing patterns of cus-

tomers on the website are also

kept secret. If matching segments

for in-house products are missing,

the Amazon Advertising Platform

(AAP), with its fine-grained modu-

lation options, may be the more

efficient alternative.

Product targeting is another

modulation option of Product Dis-

play Ads and works based on ASINs

(the article number used by Ama-

zon). The centre of focus changes

here from the customer to the

buyer’s decision process. The pro-

moted product either substitutes

or complements the planned pur-

chase. Typical examples of this are

the less-expensive generic prod-

ucts to brand name products and

vice versa, as well as commodities

and accessories which can be

advertised on the product detail

page of its matching main product

(cross-selling, up-selling). Compa-

nies that have a suitable product

in their range and want to create

campaign setups with low expen-

ditures can place an ad in related

categories. For example, it is pos-

Two types of Product Display Ads used for cross-selling which target the high traffic Apple iPhone. Source: Screenshot Amazon

Best Practice

Within this display type, the prod-

uct title can be customised and a

logo can be added. This has the ad-

vantage that longer product titles

which are often optimised in terms

of keywords can be exchanged for

shorter and more informative titles

without being curtailed.

Example: Product Display Ad

21

sible to run an advertisement for

cat food in the entire “cats” or “pet

supplies” categories without having

to check and choose every single

ASIN manually. Unfortunately, this

option has not yet been enabled for

all categories and products.

A blessing and a curse

For brand manufacturers who con-

sider product and brand aware-

ness a top priority, Product Display

Ads can be a very powerful tool.

Owing to the extremely wide pur-

view and the relatively low cost

per click, a high number of custo-

mers within a certain target group

can be addressed almost immedi-

ately. In this way, it is possible to

generate a few million impressions

very quickly.

Seeing as the buyer decision

process is almost at its end when

Product Display Ads are shown,

it is necessary to think about the

actual benefit of advertising the

specific product at this point

as well as about the matching

(customised) ad copy. It is also im-

portant that there is a clear refe-

rence in the working of the ad to

the product whose detail page

is used to display the advertise-

ment. This can be accomplished,

for example, by indicating that

the promoted product is a co-

ordinated accessory to the pro-

duct featured on the detail page.

When it comes to ink cartridges

on the detail page of a matching

printer, the connection is fairly

self-evident, but this is not al-

ways the case. For interest-based

targeting, the wording of the

ad copy influences higher click-

through rates.

Similar to other AMS display

types, the permeability of the Prod-

uct Display Ads is simultaneously

a blessing and a curse. Using exam-

ples from product detail pages of

well-known brand manufacturers,

it becomes clear that the com-

petition is attacking established

category leaders and popular

brands. Often an ad for a company’s

direct competitor appears below

the Buy Box on their page. Rever-

sing this process is possible th-

rough clever cross-selling campa-

igns which increase sales through

Product Display campaigns and

keep the competition away from

one’s own product detail page.

Another option to turn the tables

is advertising the brand product,

including extended warranty

and other service advantages,

on the product detail pages of

no-name substitute products.

Product Display Ads provide a va-

riety of opportunities, but cut both

ways. On the one hand, they en-

able advertisements on the pro-

duct detail pages of the competi-

tion; on the other hand, adverti-

sements for complementary pro-

ducts influence customers to buy

more. Every company can become

a victim – or an offender (see Chap-

ter 3, Strategy, “Defensive mar-

keting vs. offensive marketing”).

Moreover, Product Display Ads

can throw the lever for cunning

campaigns based on the pro-

found knowledge of certain tar-

get groups. If you know that the

owners of products A and B have

looked at product C and are very

likely to purchase D, you can

achieve the respective target

group accuracy. If your compa-

ny purchases ARA Premium (the

advanced analytics solution from

Amazon), you will get a lot of use-

ful data to build your segments

and targetings.

No matter how one looks at it,

Amazon simply has the best re-

turn on investment ratio. No other

means of advertising offers the

cheapest CPC ratio and the hig-

hest amount of precision in the Ama-

zon portfolio as Amazon’s Product

Display Ads. Just keep in mind that

Best Practice

Please note that Amazon deactivates

campaigns with a click-through rate

below 1% since Amazon labels any

below this rate unprofitable. Thus,

the relevance of the promoted prod-

uct for a certain target group has to

be obvious.

22

the target group needs to be

well-defined for maximum effect

– interest-based targeting can

result in much bigger scattering

losses than product or keyword-

based targeting.

23

CHAPTER 3 HOW TO STRATEGICALLY UTILISE

AMS ADVERTISING CAMPAIGNS

How to win the game of Monopoly

Anyone who has never played

Monopoly – or is just no good at

it – spends way too much money

early on by buying every property

landed on and losing control over

the budget and figures per square.

When it finally becomes possible

to purchase Park Place, the coffers

are empty. The same is true of AMS:

campaigns lacking a clear objective

are not efficient and do not provide

reliable data, the basis on which

vigour could be increased. Cur-

rently, experimenting with AMS

on a small scale while yielding

competent results is quite easy

and affordable, but exploiting the

whole potential of a campaign and

display type is significantly more

speculative. One of the most dif-

ficult challenges for international

brands is scaling large assortments

and sales reasonably with the right

campaigns.

A holistic AMS strategy for the

entire range of goods is not neces-

sarily mandatory. Depending on the

lifecycle of a product and the com-

petitive context, the differentiation

of campaigns on the level of the

assortment may be recommended.

Apart from the superior account

strategy, there are a variety of pos-

sible campaign strategies with dif-

ferent objectives. Possible objec-

tives of campaigns for specific

product lines include increasing the

market share, brand awareness, as

well as sales or margin-directed

objectives. In the following, various

campaign strategies and their re-

spective tools will be explained in

detail.

Campaign Strategies

by Comparison

Within daily business on Amazon,

event driven sales campaigns are

consistently foregrounded, which

makes corporations lose perspec-

tive. The superior objective of com-

panies selling on Amazon should al-

ways be to become as independent

as possible from the retail giant’s

search algorithm A9 as well as from

the competition to attain the best

possible ratio between marketing

costs and sales. The following chart

shows how diverse the approach-

es can be, depending on the cam-

paign objectives. For reasons of clar-

ification, the key features of most

campaign strategies are included.

Depending on the initial situation,

the budgeting and past results,

a slightly adjusted setup can be

more expedient. Thus, the setups

displayed in this white paper are

meant to be templates which can

be adjusted and built upon on a

case-by-case basis.

Increase in Sales

The classic objective of advertising

campaigns is increasing sales to ma-

ximise turnover. When having this

objective, concentration must be fo-

cused on the sales growth rate of the

promoted products. The respective

costs are limited by a fixed budget

or a maximum ACoS. Meanwhile,

focus lies on the keywords with

the greatest range, which should

have bids above the current market

standard. Apart from the manually

controlled Sponsored Product and

Headline Search Ad campaigns, the

automatic campaigns adjusted by

the Amazon algorithm should be

switched on. Amazon then covers

the longtail keywords to ensure the

largest possible range. This range,

in addition to the ROI, is continual-

ly optimised like within any other

campaign. The exact strategy for

this kind of optimisation is going to

24

be explained in detail in Chapter 4.

ROI driven campaigns also increase

sales, but here the focus lies on

doing so while spending as little

money as possible, thus achieving

a minimum ACoS. In practice, this

means gradually creating the ideal

ratio between range and sales from

experience with past campaigns or

with start bids below the market

standard. By optimising individual

bids and detailed keywords sets,

Campaign Objective

Keywords Bidding StrategyKey Performance Indicators (KPIs)

Display Types

Increase in Sales Generic + Automatic Aggressive Growth Rate SP, HSA

Return-Optimised Sales

Longtail Low and IncreasingReturn on Investment

(ROI)SP

Trademark Protection

Brand + Product Lines

Aggressive Auctions Won HSA, SP, PDA

Increase in Market Share

Competitors Aggressive Auctions Won HSA, PDA, SP

Cross-Selling/Up-Selling

Brand + Product Lines

Market LevelShopping Cart Size

+ ROIPDA, SP

Product Launch Generic + Automatic AggressiveRanking

ImprovementSP, HSA

Utilising Event Driven Effects

Combination of Event Keywords +

GenericMarket Level Increase in Sales HSA, PDA

Increasing Brand Awareness

Generic + Competitors

Low and Increasing Impressions + Clicks PDA, HSA

ClearingGeneric +

CompetitorsLow

Return on Investment (ROI)

SP

Keyword Research Automatic LowNumber of New

KeywordsSP

Comparative depiction of AMS campaign strategies (HSA: Headline Search Ad; SP: Sponsored Products; PDA: Product Display Ad) Source: Own illustration

25

the ROI continually improves and

sales increase with a steady bud-

get. The binary contrast between

the main focus of those two cam-

paign objectives shows why there

is no middle ground: Individual

products, assortments or brands

are adjusted to increase brand awa-

reness, ranking and ultimately sales

by intense and aggressive bidding.

The effect of every single dollar is

considered. In daily business with

AMS, these two campaign setups

occur in succession, which is an

extremely effective strategy for

new campaigns without previous

experience or product launches.

In this manner, you can improve

your products organic ranking in the

short run and then in the next step

support its steady advancement

sustainably.

Trademark Protection and

Increase in Market Share

Comprehensive knowledge about

the keywords relevant to your own

product is essential. You should

regularly check to what extent your

keywords are also being occupied

by your competitors. If your objec-

tive is protecting your own brand

against attacks from the competi-

tion, you have to utilise all display

types. Many people believe that

booking Headline Search Ads

for their own trademark name and

products is suf f icient to defend

themselves, but Sponsored Pro-

duct and Product Display Ads are

also indispensable tools for trade-

mark protection. For example, even

if Adidas manages to lead custo-

mers to the product detail page of

a specific pair of black sneakers by

means of Headline Search Ads and

Sponsored Products, competitors

still have the chance to advertise

another pair of black sneakers on

their product detail page near the

Buy Box, at the exact point when

customers are closest to putting

something in their shopping cart.

This aggres- sive approach yields

three main results: firstly, there is

the risk that Nike or any other com-

petitor might steal customers and

sales away from Adidas; second-

ly, Adidas invested resources that

no longer have an effect – apart

from helping the competition; and

lastly, the competitor’s product

has a better ranking since it was

purchased more often.

The Winner takes it all.

To keep using the example of Adi-

das sneakers, what can Adidas do

exactly to prevent these interven-

tions from happening? The defen-

sive approach, in this case, could

not be any easier: the respective

product detail pages should be oc-

cupied by Product Display Ads for

their own products. A customer who

gets to the detail page of those

black sneakers, but is still not en-

tirely convinced and is drawn to

an advertisement beneath the Buy

Box can instead be led to another

Adidas product – maybe a white

version of the same pair of sneakers.

Thus, the customer is shepherded

through Adidas’ product universe

until the perfect match is found.

Another option is the aggressive

approach, which can also intervene

much earlier in the buyer decision

process. Most notably, successful

brand manufacturers who have suc-

ceeded in occupying a whole prod-

uct category with their trademark

are endangered in the conversion

funnel. “BRITA” has become a syn-

onym for the term “water filter” and

is often typed in the search bar in its

place. If no-name brands, like BWT,

manage to occupy the keyword

“BRITA” with a Headline Search Ad

campaign, they can make customers

aware of the price disparity and put

themselves in an ideal position.

The same approach can be used

for Sponsored Products to address

customers searching for “BRITA”

with the respective no-name prod-

ucts. If those are cheaper and get

good reviews, they will appear quite

attractive to potential customers.

An added bonus is that they will

likely be perceived as “best search

results” by quite a few customers,

as described in Chapter 2.

Therefore, it is even crucial for

established brands and manufac-

turers occupy their own brand’s

keywords prophylactically. Defen-

26

sive campaigns should always be

prioritised to prevent giving away

advertising budgets on Amazon

to the competition. It is all about

consolidating the market position.

You can imagine the ideal setup as

a completely bought up colour

group on a Monopoly board – do

not give the opponent any chances

to gain a foothold and the game

has figuratively already been won.

Moreover, the individual squares

back each other. You can immedi-

ately charge double the rent when

an opponent comes across one of

your coordinated streets, and start

building houses and hotels. Trans-

lated into AMS language: if Adi-

das occupies many of the relevant

keywords for their own products

with display ads, they can protect

themselves against Nike, New Bal-

ance, etc., while also efficiently

cross-selling and up-selling. Why

not advertise the matching socks

with Product Display Ads on the

product detail pages? BRITA, on the

other hand, should use Headline

Search and Sponsored Product Ads

to consolidate their market posi-

tion within the search results on

Amazon.

Utilising Event Driven Effects

Like any other commercial enter-

prise, seasonal offers affect Amazon

as well, the consequence being that

the bidding war for the best adver-

tising spaces is most intense when

there is a seasonal event during

Christmas or Easter. Accordingly,

the cost per click is extremely high.

Normally, the higher bids corre-

spond with increased consumer

acceptance, but steeper demand

has to be kept in mind during the

planning of the annual budget.

The same applies to events created

by Amazon, like the Cyber Weeks,

Prime Day or Amazon Easter Week.

On those days, the number of visi-

tors on Amazon increases exponen-

tially. By means of an increased daily

budget, an infinitely greater number

of people can be addressed than

usual. But it should be kept in mind

that thousands of discounted pro-

ducts are used as crowd pullers

for those events. Thus, not only

the overall product environment

changes, but also the purchasing

behaviour of potential customers.

Perhaps products with the vigour to

generate sales all year long should

receive more advertising attention

during the offseasons to avoid the

pre-Christmas spike in ad prices.

This is definitely healthier for the

ACoS.

To clearly demonstrate how sea-

sonal offers and the positioning of

display ads impact the success or

failure of a campaign, typical Ger-

man “lederhosen” is the perfect ex-

ample. Those who advertise cheap

lederhosen in January on the pro-

duct detail pages of a shop called

“Buckskin Breeches” in the price ca-

tegory of 1,000€ or more, will have

thrown money out the window.

Similar to the keyword research for

manually adjusted campaigns de-

scribed above, realistic assessments

and common sense are key when

it comes to selecting the targeted

ASINs. Less expensive lederhosen

are predominantly bought in Sep-

tember right in front of the entrance

to Oktoberfest in Munich. Whoever

really wants premium leather shorts

in the beginning of the year from

the top price category is probab-

ly looking for high-quality leather

and is willing to pay top dollar for it.

Cheap advertising spaces are not a

tool for bending the laws of time,

space and fashion preferences. The

ACoS of the little sales generated

through this kind of strategy would

be way too high and the campaign

would hardly be a profitable inves-

tment. A much more efficient use

of time is utilizing Product Display

Ads on the product detail pages

of equivalent lederhosen to ad-

vertise them in mid-August. With

the addition of an accordingly

adjusted product title like “Per-

fect Octoberfest-Lederhosen,”

the product would be a hit.

Increasing Brand Awareness

Amazon is one the biggest display

marketers in the world and reaches

millions of users every day. The high

market penetration in the segment

of online shopping means that

27

AMS is also suitable for branding.

Although the basic objective of

every AMS campaign is to increa-

se sales, campaigns geared to a

target group can also be used to

incorporate the brand into a set

of potential customers. Regarding

the thousands of targeting opti-

ons for Product Display Ads, the

cost per click only varies by a few

cent values. In this space, millions

of users can be addressed within

a very brief time span, despite an

interest-based targeting scheme.

It must be noted that the more ex-

pensive positioning in the search

process with Headline Search Ad

campaigns can yield very good re-

sults when introducing a new brand

or product line. The ad‘s very positi-

on between the search bar and the

search results amplifies the brand

as well as the ad copy, which are

inevitably noticed by potential

customers. Thus, AMS can also be

an interesting approach for sup-

pliers of fast-moving consumer

goods with strong of fline sales

channels. However, those with

larger branding plans are recom-

mended to use the Amazon Ad-

vertising Platform (AAP) because

it offers more diverse advertising

options inside and outside the

Amazon shopping environment.

Clearing

A special but frequently occurring

campaign objective is the clearing

of in-stock products. These are

mostly outdated products for which

an updated version is available. In

these cases, the margin is quite low

for Amazon as well as for manufac-

turers because the market price has

probably significantly decreased.

That is why Amazon might not al-

low a promotion without Amazon‘s

purchase price being discounted

further. It is very important to know

up front if the listing is going to be

annulled or taken over by the mar-

ketplace sellers, or if the updated

version will substitute the old one

on that listing altogether. In the

former case, the focus is placed

on increasing sales to reduce

warehousing and depreciation

costs. In the case of the latter – when

the old listing continues with the

new version of a product – the cam-

paign becomes an investment for

future ranking and helps the launch

of the updated product. Thus, the

costs for clearing in-stock products

can be considered indirect marke-

ting costs for the new ones.

Keyword Sets and

Algorithm Effects

For a campaign which is focussed

on increasing market share, the first

step is the selection of relevant key-

words regarding the brand or a

product. Those keywords, as well

as their reasonable variations, are

booked manually, therefore having

knowledge about the market and

the products is key. Using infor-

mation about a product’s own ran-

king in connection with different

keywords sheds light on which

keywords are relevant. Creating a

suitable keyword set is laborious

and requires the support of spe-

cialised tools which help discover

the most popular search terms. Last

but not least, keywords from older

campaigns of similar products can

also be included.

Another way to reduce adverti-

sing costs is not to focus on specific

keywords at the start of the cam-

paign, but rather to take a broa-

der approach. For this campaign

objective, automatic campaigns

should be set up, which the Ama-

zon algorithm autonomously enri-

ches with relevant keywords. It is

important to advertise only a few

products with similar features in

these types of campaigns so that

a clear picture can be made of

which keywords work best for the

various products.

When advertising several prod-

ucts with the same keyword, auto-

matic campaigns do not provide

data based on SKUs – stock keeping

units. Moreover, one should start

with low bids in cent amounts be-

fore slowly increasing them. The

objective here is to let the Amazon

algorithm work its magic, which is

why it is not beneficial to start with

high bids. When this occurs, the

algorithm spends the daily budget

28

on the all too apparent and over-

priced keywords (see Chapter 4,

paragraph 2: Keyword Optimisati-

on). It is self-evident that cheaper

keywords are not the big sales dri-

vers, but one can identify the hid-

den champions – those keywords

which cater to exceptional sales

figures in minor investments and

simultaneously provide useful in-

sights regarding the best perform-

ing keywords – for manually booked

campaigns of similar products.

Knowledge of the search terms

is crucial for successfully using AMS

because the bidding war for the

most relevant keywords gets high-

ly competitive very quickly. The ad-

vertiser who knows the keyword

landscape can occupy large ter-

ritories secluded from the great

battle before it even starts. The shoe

segment provides another good

example: “running shoes” is a

keyword which attracts a lot of in-

terest as well as money from strong

brands such as Adidas and Asics.

This method is affordable for these

two brands, but not for the little

guy. Therefore, it is more efficient

for smaller companies to look out

for more specific keywords, such

as “marathon running shoes”, “trail

running shoes” or “Tough Mudder

running shoes”. These keywords all

correspond to different variations

of running which may be relevant

to the advertised product. These

longtail keywords often are the

only viable way for smaller brands

that cannot afford the main key-

words.

What does the opponent do?

Competition Analysis

If the campaign objective is an at-

tack on the competition, the first

step is to get as much information

as possible about them. To just

randomly bid on competitor‘s key-

words is counterproductive from

the viewpoint of the ACoS. You

can more effectively use your time

finding exactly which keywords can

be occupied with minimum effort

and maximum effect. The same

applies to ASINs: the competi-

tor’s ASINs, for which a suitable

replacement exists in your own

catalogue, should be identified as

well as the pages on which Product

Display Ads will be most effecti-

ve. Projected onto the Monopoly

board, the question becomes:

which street should I purchase to

deny the opponent the occupation

of a complete group of streets?

The analysis starts with tradi-

tional keyword research: which

of my competitor’s keywords are

ranked exceptionally well? Here

your own ranking and that of your

competitors should be compared.

Next, you should select keywords

for your campaign. It is of the utmost

importance to categorise keywords

into price ranges in order to decide

on which of the words will absorb

the largest part of the budget. After

that, the variations of and additions

to these keywords can be identified

in a process of elimination, which

can be prioritised as cheap alter-

natives to the main sales drivers. In

the end, you have a set of keywords

worth fighting for. You should in-

vest in these keywords aggressive-

ly since they are mostly popular

sales drivers. They can only be oc-

cupied by aggressive bidding –

provided that the previous analysis

was thorough.

Regarding this campaign objec-

tive, one question always remains:

how promising is such an approach?

Well, unfortunately, you cannot

evaluate the ratio between reve-

nues and expenses until the respec-

tive campaign has ended. However,

numerous indicators can be col-

lected and evaluated beforehand.

For example, the sales rank of the

competitors who occupy the same

keywords sheds light on what to

expect for one’s own campaign. A

more refined method is to set up

Product Display Ads on the product

detail page of the respective com-

petitor’s product: the number of

impressions gives a relatively clear

picture on how many potential cus-

tomers visit the product detail pages

of the higher-ranked competitor

in the organic search results. Lim-

ited in duration, such a push on the

competitor’s product detail pages

is certainly affordable and provi-

29

des a reliable impression of the ex-

pected magnitude. This information

is especially important to know in

advance, since a campaign which

is more successful than previously

expected quickly results in supply

shortages, which in turn can have

a negative impact on the ranking

within the organic search results.

Thus, an elaborate plan is needed

so that your competitor does not

profit from your mistakes when you

are trying to overtake their market

shares. In this fashion, one should

also consult external fee-based

tools to assess the potential sales

figures in case of doubt. Unfortu-

nately, the cost structure of campai-

gns with several targeted ASINs

cannot be itemised subsequently.

Thus, a clear groundwork and a de-

tailed itemisation are necessary.

- € 0 %

20,000 €4 %

2 %

6 %40,000 €

8 %

10 %60,000 €

12 %

14 %

80,000 €

100,000 €

120,000 €

Launch of a Product Line with AMS support

16 %

18 %

Jan Feb March April May June

Organic Turnover Turnover via AMS ACoS

The effect of a professional AMS campaign: an increase in sales (AMS and organic), ACoS optimisation. Source: Own illustration

30

TWO SUCCESS STORIES: BEST SELLER RANKINGS BY MEANS

OF TARGETED AMS SUPPORT

In the previous chater, we showed

why increasing your market share

is an extremely important campa-

ign objective when launching a

new product. Here we will pre-

sent two case studies. The first

is about the launch of a product

line, supported by Amazon Mar-

keting Service, in the highly com-

petitive “home & kitchen” category.

The campaign objective was to

establish oneself with the new

assortment in the best seller lists.

The second case study is about

how an already available IoT pro-

duct was made a best seller over

a longer period.

Case Study #1:

From 0 to 1: Product Launch

with AMS Support

The objective of the client was a

quick increase in sales with a new

factor - a contributed to these suc-

cess stories. Feel free to schedule

a consultation for more details on

how we can improve your compa-

ny’s success on Amazon via AMS.

product line of ten products wi-

thin a highly competitive market

niche. The elaborately optimised

and interconnected product de-

tail pages, which had already

been edited by our content spe-

cialists, served as the basis for the

campaign. Within the context of

the tool-based keyword research,

a specific keyword set with max-

imum range and relevance was

created for each of the ten prod-

ucts. Regarding the optimisation

of the conversion, a collection of

crucial reasons to buy the pro-

31

ducts was created for the client

by means of a content relevance

analysis. The titles, bullet points

as well as all other textual ele-

ments were finetuned to suit the

relevant search terms and equi-

valent products were grouped

together as the main product

and variants. factor - a emphasises

the importance of this preceding

step of content optimisation and

SEO because it is simply not

possible to conduct a successful

AMS campaign without laying the

groundwork first.

To increase the visibility of the

products from the start, numerous

AMS campaigns were set up. In

every stage of the buyer decision

process, the customer was made

aware of the assortment with

Headline Search Ads, Sponsored

Products and Product Display

Ads. Only two months after the

start of the campaign, two of the

new products were best sellers in

their relevant product categories.

Although the ratio between orga-

nic and Amazon Market Service

turnover was a bit inauspicious

in the beginning, the ACoS of

18% was still pretty good – and

in March it was tuned down to

12%. That is especially astonishing

considering that March was the

month with the highest propor-

tion of non-organic sales. These

results were possible due to con-

tinuous optimisation and thus the

reduction of unprofitable key-

words and display ads as well as

the expansion of high-performan-

ce keyword sets and display ads.

The increasing sales rank, reliable

delivery and positive customer

reviews also helped improve the

ranking in the organic search re-

sults, which in turn led to an in-

crease in sales. By following this

recipe for success, an ACoS of 8%

was reached within five months

by factor - a.

Even more impressive was the

jump in sales. The monthly turn-

over of the advertised assortment

increased from under 10,000€

to 110,000€. In June, already

80,000€ of the total turn-over had

been generated via the organic

demand. This specific AMS cam-

paign must be understood as part

of an upward spiral. In the begin-

ning, it helped draw attention to

new products which would have

otherwise been under the threat

of being lost in the masses of prod-

ucts on Amazon. Afterwards, the

campaign attained continuous im-

provements in sales – mostly via

highly efficient PDAs that aimed at

cross-selling and up-selling.

The other figures in this cam-

paign also speak for themselves.

Broken down to the single dis-

play types, one can see that even

Headline Search Ads, designed

for the general awareness of the

new assortment, catered to a turn-

over of 25,400€ with costs of only

3,600€. Thus, the ACoS of about

15% was, by all means, acceptable.

Within five months, the total invest-

ment of 13,660€ generated an

AMS turnover of 132,800€. Thus,

the average ACoS of 10.28% was

extremely low. Moreover, it must

be kept in mind that this specific

product niche was highly com-

petitive. Provided that other seg-

ments are not as competitive, the

costs would have been even less

in the respective categories. The

total organic turnover, which was

much higher than the pure AMS

turnover, could not have been

developed without this kind of

Nils Zündorf Head of Paid Advertising

Speak with the authorSchedule a free phone consultation today!

+ 49 221 177 337 10

info@factor - a.com

campaign. Now, clients want to

preserve this solid basis and fur-

ther reduce the ACoS. Of course,

they do not want to lose their

strong position within the organic

search results. This was achieved

by continuously advancing the

keyword sets, integrating new key-

words in the content as well as

timely occupying these keywords

with appropriate AMS display

ads.

Case Study #2:

From Zero to Hero

Our client’s product previously

underperformed in terms of sales

and turnover in comparison to

competitors and the rest of the

portfolio. The turnover stagnated

between 20,000€ to 30,000€

a month and it was clear that the

product would not emerge from

years of stagnation on its own.

The product was complex, requi-

red an explanation and was desi-

gned to be combined with other

products from the client’s assort-

ment, which led to customers

often misapplying or improperly

combining it with other products.

This led to customers giving cri-

tical reviews, which did not help

the cause. As in the first case stu-

dy, AMS setup took place after

the content optimisation. First,

we had to define twisters for the

assortment, so that all related pro-

ducts could be displayed on one

- €

20.000 €

40.000 €

60.000 €

80.000 €

100.000 €

120.000 €

Sep Oct Nov Dec Jan Feb March April May

Increasing Sales by Means of A+ Content and AMS

These two striking charts hint at what is possible with AMS and come from the case studies in Chapter 4. Source: Own illustration

Revision of Product Detail Pages with A+

Content

Start of AMS Campaigns

Optimisation of AMS

Campaigns

32

20,000 €

40,000 €

60,000 €

80,000 €

100,000 €

120,000 €

33

product detail page along with the

main product. This step is about

the pooling of the main product

and its variants. Another neces-

sary requirement was the creation

of A+ content to provide the po-

tential customer with a detailed

description of the product. After

these steps had been completed,

factor - a set up the AMS campa-

igns with the objective of cost-

effectively increasing sales on a

long - term basis.

The revision of the product

detail page in October alone ca-

tered to a significant increase in

sales: the sales in November had

already doubled since September.

After this first boost, the growth

rate slowed down and ended up

stagnating again. As it turned out,

the competition started fighting

for this market standing with a

massive advertising campaign and

attractive markdowns. After the

sales figures decreased between

January and February, targeted

AMS campaigns were set up in

March. In the meantime, the client

had launched two new accessory

items, one of which was also com-

patible with the competitor’s pro-

duct. Those lent themselves nicely

as bait with which customers could

be drawn back to the original pro-

duct. By means of the Product Dis-

play Ads and Sponsored Product

Ads for the accessory items on the

product detail pages of the compe-

titor’s products, factor - a was able

to drive the traffic by implementing

informative and attractively desi-

gned landing pages. These pages

presented the client’s assortment

which had been arranged around

the problematic main product. The

result: a considerable number of

conversions.

By May, the turnover created

with the main product had increa-

sed from a stagnating 50,000€ to

70,000€. Only one month later,

the client generated a six-figure

turnover with the product on

Amazon for the first time. The next

step for factor - a was to start the

optimisation of the campaign, dri-

ven by the return on investment.

This example shows clearly

how important an accurately de-

fined strategy actually is. It would

not have been reasonable to ad-

vertise the product with many

critical reviews and low sales fig-

ures via Product Display Ads as

the substitute for a bestseller. The

strategy was based on the optimi-

sation of the respective product

detail page(s) before attention was

drawn to the client’s assortment

by means of relevant accessory

items. Customers on Amazon have

a reasonable interest in accessories

when making their final purchase

decision and often perceive Pro-

duct Display Ads as a welcome

source for additional information

rather than as a disturbing display

ad. Thereby, the customer directly

encounters the broad assortment

available on Amazon and can be

reminded that Amazon provides

all one needs. Optimised and in-

terconnected product detail pa-

ges and brand pages help build

trust and eclipse potential com-

petitors.

Nils Zündorf Head of Paid Advertising

Speak with the authorSchedule a free phone consultation today!

+ 49 221 177 337 10

info@factor - a.com

member of

Maximise Sales onAmazon!

As part of The Global Marketplace Group, factor - a facilitates significant increases in sales and market share values while establishing an ideal relationship to Amazon

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• Keyword Research and Content Relevance Analysis

• Content Creation and Optimisation (Amazon SEO); A+ Content

• Data Uploading, Quality Monitoring and Management

• AMS Setup, Management und Optimisation

• Selective Campaigns (Today‘s Deals, Special Offers, Vouchers)

• Display Ads, External Traffic and Range (AAP)

• Product Range Configuration and Order Management

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36

CHAPTER 4 TACTICAL TRICKS WITH AMS PRODUCTS

From square to square around the Monopoly board

In the previous chapter, we out-

lined several strategic approaches,

in which we showed how AMS can

be utilised to increase the market

share on Amazon, as well as the

return on investment, on a long-

term basis.

Now, with the turn of the page,

we will change to the tactical level

of campaigns, since even the best

strategies cannot take full effect

when the tactical implementation

is flawed. This chapter is about how

to set up campaigns, define key-

words, evaluate the results and

simultaneously maximise the ef-

fectiveness of the campaigns. It is

about having a cohesive strategy

and daily optimisation routines. In

the end, it is the minor details that

account for the competitive advan-

tage. To use the Monopoly analogy,

a player can occupy whole colour

groups and successfully build on

them afterwards when the game is

played systematically step by step.

Step 1: Structuring Campaigns

Generally, Amazon Marketing

Services display types consist of

the following elements: campaign

settings, products (ASINs) and a

key word set with appropriate

keywords.

Campaign:

On the top level, the maximum

daily budgets, as well as the total

campaign budget, are defined.

Here one can also decide if the

campaign shall run automatically

or manually. As we explained in

the previous chapter, you should

always have automatic campaigns

in addition to the manual ones for

the purpose of keyword research.

Furthermore, it is necessary from

time to time to set up temporary

The Creation and Optimisation of Campaigns

Structuring the product

portfolio according to campaigns

Defining the campaign objective

Keyword Research

Defining initial

keywords and bids

Scaling and Evaluating the Success

Adjusting keywords and bids

Adding keywords

drawn from automatic

campaignsThe process of creating and optimising AMS campaigns. Source: Own illustration

37

and specifically adjusted manual

campaigns (regarding the season-

ality of e-commerce, see paragraph

“Analysing and Continuously Opti-

mising”). And of course, the cam-

paigns and respective products

must be structured in a way that

the keywords match every single

product within a campaign.

Products and Keywords:

On this level, individual products

and keyword sets are defined. Ama-

zon automatically generates ads

for every product – Headline Se-

arch Ads and Product Display Ads

provide the additional opportunity

to adjust the ad copy. To achie-

ve the best possible impact or to

draw the attention of customers

to a specific product feature, this

feature should be used. For ma-

nually adjusted campaigns, the key-

words relevant to the respecti-

ve advertisement also need to be

defined. This step can be skipped

for automatic campaigns. While

there is no such thing as the per-

fect campaign setup or just one

typical seller or manufacturer on

Amazon, some campaigns are just

better than others: the structure

and organisation of efficient cam-

paigns are characterised by speci-

fic similar features.

Campaigns:

The Category Says It All

The division of a campaign into

parts allows for creating different

aggregations. Manufacturers and

brands can subdivide their assort-

ments in multiple campaigns of pro-

duct categories, product lines or, in

the best case, similar features. Let’s

look at another example: Lego can

divide their assortment into the

different product worlds: Castles,

Pirates and City. When doing so, it

is important to broaden the cate-

gory names past the main options

and go further into the appropriate

categories for the product lines

themselves. Grouping products

together which are searched for by

potential customers with the same

interests is of the utmost import-

ance. We recommend that you con-

sistently stick to one system while

structuring campaigns to avoid an

excessive assorted classification

of products in campaigns with the

same objective, which can worsen

scalability and cause one to quickly

lose track. Generally, a classification

across categories is not a problem

and may even be intended when

setting up campaigns for seasonal

events or when they accompany

offline campaigns. This practice

remains, however, the exception.

Another crucial factor to consider

is the naming of campaigns. You

should avoid using labels like “Cam-

paign 1” because they will cause

you confusion and lead to Amazon

users losing track of their accounts –

especially when it comes to analysis

and optimisation. It is better to use

expressive names, such as “Wireless

Speaker | Defensive”, “Wireless Spea-

ker | Offensive” or “Monitors | Com-

p e t i t i o n | AS I N s | B e s t s e l l e r |

Quality Ad Copy” and “Monitors |

Automatic Targeting.” The alloca-

tion of distinct IDs and a consistent

naming scheme across all campa-

ign types will make following your

campaigns much easier.

Product Grouping: Birds of

a Feather Flock Together

On the campaign level, each set

of products is connected to a

keyword set. Thus, it is important

that all products within a group

fit all keywords in the respective

set. Depending on the customers’

search behaviour, it is not shrewd

to group the products according to

product lines. Instead, we recom-

mend you assign, for instance, all

non-stick pans to one campaign

and then all stainless-steel pans to

Attention!

Products which are not profitable

for Amazon cannot be advertised.

Since this of ten also af fects best-

seller products, it is fruitful to check

beforehand which products can

be advertised and contact the re-

spective Vendor Manager in case

of doubt. Plus Products, as well as

Pantry Products, are also barred

from being advertised.

38

another. The grouping method for

larger assortments should be as

precise as possible to avoid cases

in which shoppers are looking for

“non-stick pans” but are presented

with the associated pots and casse-

roles instead. Consistency is once

again key regarding scalability and

evaluation of success, especially

when it comes to larger assortments

with complicated interconnections.

Step 2: Defining and

Optimising Keywords

The fact that the selection of key-

words, tailored to a specific prod-

uct, is the decisive factor for the

success of every campaign is obvi-

ous. If customers who are looking

for “men’s jeans” are presented with

„lady‘s pants“, they are not likely

to change their minds and buy the

other product instead. This is where

an advertiser can lose money. If

customers click on the respective ad

before noticing their mistake, the

advertiser still has to pay. When im-

portant keywords are missing from

a set, sales revenues are lost. For

example, if the term “men’s jeans”

is not included in the keyword set

for a Levi’s 501 campaign, quite a

few potential customers will not be

made aware of the product.

At this point, advertisers must

ask themselves the same questions

as in any other search engine mar-

keting environment:

1. How do I find the most relevant

keywords without excessive bur-

den?

2. How do I ensure that my ad-

vertisements are displayed in

accordance to matching search

requests?

3. How do I avoid my advertise-

ments being displayed with odd

search requests?

Apart from having sufficient know-

ledge about the assortments and

products, with the help of common

sense, there are a few tactical tricks

that can provide keywords that may

not be evident candidates from the

start – because the customer moves

in mysterious ways.

Specialised tools create key-

word sets and stagger these

keywords according to search volu-

me and relevance for the respective

products, but the supplier market

is still very fast-paced. The ideal

way is using Amazon itself because

its A9 algorithm knows best what

is happening in the market cos-

mos. Set up at least one manual

and one automatic campaign – si-

milarly structured – for the same

group of products and evaluate the

results after a few days or weeks.

After that, include the keywords in

the manual campaigns catered to a

high sales rate or an advantageous

cost-turnover ratio in the automatic

versions. We assure you, surprises

are usually in store!

Another very important step is

defining, preferably keen, maximum

bids for the automatic and manual

campaigns. If both campaigns bid

the same amount of money on the

same keywords, quite a few clicks

are going to be made with the au-

tomatic campaign, which otherwise

would have been generated by the

manual campaign as well. When the

budget in the automatic campaign

is curtailed, the algorithm will over-

bid on the most relevant keywords

and will be forced to broaden its

spectrum.

If some of the keywords inclu-

ded in the manual campaigns did

not generate impressions, i.e. were

not displayed at all, start the error

search. Here the relevance of the

display ads is extremely important

since Amazon makes more money

off selling the product than off ad-

vertising it. Amazon ensures the

relevance by featuring manually

adjusted display ad campaigns only

when the selected keyword is rel-

evant to the respective product.

The absence of impressions is con-

sequently a crucial indicator when

analysing the product descriptions

and harmonising them with the cam-

paigns. If conspicuous search terms

are not included, the content must

be revised. This also improves the

39

organic ranking of the products

independent of AMS. As we have

mentioned several times already,

optimised content is the foundati-

on of a successful AMS campaign.

If individual ASINs of Sponsored

Products campaigns do not gener-

ate impressions, the reason might

be that the advertiser has lost the

Buy Box for the moment. In these

cases, Amazon has deactivated the

advertisement in order to prohibit

an increase in revenue from another

seller. Attention: the same cannot

be argued for Headline Search Ads

and Product Display Ads.

Step 3: Bid Adjustment

When the keywords match the

search requests (or when the target

group or ASIN matches a Product

Display Ad), the bid on a potential

click is the defining factor on when

and how often an advertisement

is displayed. Furthermore, the bid

amount is crucial for the ACoS. Thus,

apart from the right keywords, the

bid amount is the most valuable

tool for success with Amazon

Marketing Services. The perfect

amount for a CPC bid is conten-

tious. On the one hand, a high bid

caters to an ads frequent display

and increased sales, as long as the

ad is coherent; on the other hand, it

occasions higher costs per sale. Ano-

ther factor is the campaign objec-

tive. For example, if an automatic

campaign is used to find new key-

words, sales become quite irrele-

vant and the cost per click (CPC)

should be as low as possible for

tactical reasons. Nevertheless, the

CPC should be adjusted upwards if

the product-keyword combination

is a known sales driver. Another

thing to keep in mind is the life cy-

cle of the product. If the objective

is a short-term push or temporary

product launch, the campaign will

not have enough impact without

high bid amounts. If the objective,

however, is securing an establis-

hed market position on a long-term

basis, the optimisation of the ACoS

has absolute priority.

To not get worn down by these

two extremes, clear and purposeful

goals for the marketing expenses

should be defined, based on strate-

gic decisions (see Chapter 3). Al-

though marketing expenses mostly

comply with the margin of the seller

or manufacturer, they still can vary

depending on the campaign objec-

tive. For short-term campaigns, the

cap is open: to increase brand awa-

reness, some companies are willing

to invest almost all sales revenue

back in marketing. It is questionable

if this is actually necessary when the

campaigns are well-planned and

implemented accordingly.

A few things to keep in mind:

• For the most part, new keywords

must be tested with market-con-

form cost per click bids so that the

respective display ads are clicked

on often enough to produce va-

luable data in a brief time. Key-

words with a high search volume

and an ever-changing competi-

tor can yield satisfactory results

on in the long term with a CPC

bid below the market standard,

but the respective display ad is

not going to be displayed at the

best possible position on the first

search results page.

• If the cost per sale is too high,

the CPC bid should be reduced

by a certain extent to assess to

which extent the ratio can be im-

proved. Deactivating keywords

should only be the last resort.

• If sales are too low, the CPC bid

should in turn be increased by

degrees to assess if the range

of the advertisement can be

improved without generating

Best Practice

Product Display Ads are not only

booked for keywords, but also for

ASINs and specific target groups.

If these advertisements generate

little or no impressions, the error

search should be started: does the

defined target group even exist? Is

there a relation to the chosen ASIN

(and is the product still available

for that ASIN)?

40

too many costs.

• If the average costs per click is

near the maximum bid, this is a

clear sign that the sales potential

is not being used completely.

All the same, depending on the

type of adjustment and the revenue

dimensions, it can take a few days

or even weeks for reliable results to

be provided. Keywords with a high

search volume but a poor ACoS

even after one or two months of

continuous optimisation should be

deleted from the respective cam-

paigns or be further constrained by

means of negative keywords. Espe-

cially larger assortments should be

managed with specialised tools or

by a professional marketplace ma-

nagement agency since reporting

exports mostly just provide raw data

which must be further rehashed.

Step 4: Analysis and

Continuous Optimisation

Numbers, figures and their analy-

ses are a superordinate issue with

Amazon. Although this white paper

is not the place to go into the report-

ings and evaluation of various data

sets in detail, we nonetheless want

to stress that the Amazon Marketing

Services campaign data should not

be read in a vacuum – thus, it can not

be interpreted correctly without re-

ference to other data sets. Your com-

petitor’s activity, process issues

within your own company, as well

as inexplicable upward and down-

ward sales outliers all affect the

pure AMS key figures.

Thus, regular Amazon data ana-

lysis routines are extremely im-

portant, and the best performing

products should be subject to daily

evaluation. Thereby, you can quickly

react to certain dangers such as

sudden price collapses or supply

shortages. Especially brands should

check their assortment regularly

because Amazon maybe has blun-

dered important content on the

product detail page, or another sel-

ler of the same products has latched

onto your brand product’s content.

Other problems might be that there

was a significant price reduction

on Amazon, or another seller has

dropped their price so drastically

that all the prices for that product

have decreased automatically.

From the perspective of AMS,

it is also necessary to regularly au-

dit the most relevant keywords on

the most important product detail

pages as well as on the search re-

sults pages. Are the ads as arranged

displaying your products or those

of your competitors? Apart from

checking figures, we also recom-

mend viewing your own product

detail pages as a mystery shopper.

Although Amazon’s statistics

and your own tool-based evalua-

tions have to be taken seriously,

they should also be understood

with a grain of salt. If figures vary

tremendously, you should definitely

find out why. Do the jumps in sales

comply with the actual deliveries

and revenues? Keep in mind that

Amazon is not really interested in

providing all the data – especially

since the corporation plays a double

role as marketplace and provider of

the respective advertising surface.

Thus, it is regarded as imperative

to regularly check the detailed

reportings by means of cross-com-

parison:

• Data must be exported regu-

larly from Amazon – either with

the help of tools or your own

spreadsheets and databases

because the information is not

stored infinitely and can only be

exported manually.

• Campaigns should be set up dis-

tinctly from one another because

important indicators are shown

in the data provided by Amazon

only for each campaign.

• Central indicators like the Aver-

age Costs per Sale (AcoS) calcu-

lated by Amazon cannot always

be trusted because they include

brand sales revenues from the

last 14 days. Only through a

cross-comparison to the actual

sales volume will the ACoS be

represented accurately. At this

41

point, you must keep in mind that

the ACoS is based on the net

price for the consumer, not on

the net price Amazon pays the

manufacturer for its products.

At worst, allegedly successful cam-

paigns run for months before their

grievances become apparent. This

is what happens when the data is

not checked regularly. We can

demonstrate the dangers of this

practice with an example from a

hastily conducted campaign ana-

lysis. The company based its cam-

paign solely on AMS figures provid-

ed by Amazon. Take a manufactu-

rer’s Headline Search Ad campaign

that leads customers to the prod-

uct detail page of a strong-selling

premium product. AMS instantly

manifests a very good ACoS and

everybody is happy. However, at

this point, it was not at all apparent

where the sales were generated

from since Amazon included all the

sales of the brand’s product from

the last 14 days into the ACoS of

Headline Search Ads, which also

included the sales of third-party

sellers. Not until after the stock at

Amazon had been checked with a

bit of delay, could it be seen that

although customers clicked on the

ad, they actually ended up buying

the cheaper offer from a third-party

seller instead. Thus, the product

sales had, in fact, not increased

while the campaign was running.

This was aggravated by the fact

that Amazon started purchasing

the product from other countries

because of an increased demand

shortly before the campaign was

started – which was indicated by

the absence of inventory changes.

Not until all these factors had been

considered was the actual ACoS

certain.

Thus, the ACoS figures must

be treated with caution: over the

period of some months, the ACoS

accurately represents the success of

a campaign and thus is indispens-

able for long-term analysis, but the

short-term ACoS figures are not

conclusive and should not be the

basis for Return on Investment (ROI)

decisions. It is extremely difficult

to get the ACoS for specific dates

since Amazon provides data on a

daily basis, yet includes all the sales

generated in the last 14 days. In

addition, there are different factors

affecting the daily figures, including

changes in the price of the adver-

tised product by Amazon, third-

party sellers adjusting their prices,

too many good or many critical re-

views for the advertised products

being featured; etc.

Additionally, you should mind

the seasonality of e-commerce.

Bank holidays, special events and,

last but not least, e-commerce-

specific phenomena like Cyber

Monday can distort the AMS figu-

res. Therefore, an accurate AMS

analysis has to be conducted regu-

larly over a long-term period until

you get a feeling for the halfway

normal from which you can evaluate

the individual figures.

These experiential values, to-

gether with the analysed data, must

be included in the continuous op-

timisation of AMS campaigns to

note sustained improvement – at

best, on a daily basis; at least, on

a weekly basis. Thus, it is regarded

as imperative to:

• Include well-performing key-

words from automatic campaigns

into the manually adjusted ones

• Adjust the CPC bids gradually

for the keywords already inclu-

ded according to the campaign

objective – always in due consi-

deration of the effects of the last

adjustment

• Delete underperforming key-

words (and include them in an

index so that they do not find

their way back into other cam-

paigns later on)

• Include negative keywords and

adjust the degree of correspon-

dence to reduce unwanted clicks

• Include well-performing key-

words in the content of the res-

pective products to improve the

organic ranking as well

42

Reacting to seasonal changes is al-

so part of the optimisation. Espe-

cially in the first months of working

with Amazon Marketing Services,

advertisers tend to underestimate

the effect that special events can

have on the sales on Amazon. When

you start your AMS campaigns in

January, you will be surprised how

fast the budget is exhausted in the

first few bank holidays of that year.

Amazon internal programmes like

Prime Day are also extremely im-

portant: when you increase your

budget by 150% for Prime Day,

you can reasonably expect a 150%

increase in sales – without having

to adjust the campaign any further.

Another reason for taking part in

those events is that sales tend to

decrease afterwards as many cus-

tomers already purchased their

desired products for a cheaper

price while the event was taking

place. Other common mistakes

regarding the budget include in-

sufficient limits that are already

exhausted before the day is done.

Although many customers browse

through Amazon during the day,

most sales are generated after

work. When campaign budgets

are prematurely exhausted, adver-

tisers have paid for the clicks wi-

thout generating any conversions;

at the end of their day, shoppers

click through other advertisements

until they reach their final purcha-

se decision, potentially for a com-

peting product. For this reason,

the performance of newly set up

campaigns also must be checked

in the evening when people are at

home shopping online.

You need to get to know the

effects that such an event can

have as well as the sector-specific

conditions and the buying beha-

viour on Amazon as quickly as pos-

sible. If you gather experience now

and optimise systematically, you

will be one step ahead of the com-

petition – and will have bought into

a promising residential area at the

right time when real estate prices

were still moderate.

Best Practice

Planning the budget based on the

calendar and one’s own experience

is key since the budget cannot be

adjusted for the same day. If you rea-

lise that the standard budget limit

is insufficient one day before Christ-

mas, you are too late!

43

CHAPTER 5 THE AMS ROCKET

What Amazon Marketing Services will have in common

with the real estate industry in the future

The opportunity to increase sales

by means of AMS can no longer

be ignored by big market play-

ers. Amid the complexity which

should have become apparent in

the previous chapters, the chan-

ces of growing by means of AMS

are excellent. That being said, es-

tablished brands, in particular, are

in danger of turning their backs

on this issue and suffering heavy

losses later. Advertisers who act

quickly and understand how early

they can overtake their competition

via AMS, with little budget but a

great amount of energy and moti-

vation, hold the winning hand.

Likewise, the danger that com-

petitors establish themselves quick-

ly on Amazon is real. To reference

Monopoly once more, if whole

colour groups are bought up and

built upon with houses and ho-

tels, it gets very hard on the board

for those who come too late. The

much-cited example of the elec-

tronic retailer “Anker” shows how

that works. If you are looking for

“external battery pack” on Amazon

today, you will probably see lots

of Anker products ranking better

than the equivalent products by

Samsung, Sony, etc. Although the

latter are also available offline, they

have been overtaken by a start-up

company on the most important

online market place in the world

– as well as in the perception of

many customers. The situation

is even more severe when you

search for the latest new topics

like “Bluetooth headphones.”

You will not find products by the

established brands at all on the

first search results page. Brands

and manufacturers who do not act

quickly will miss their chances of

being part of a fast-growing mar-

ket. In the same way that the sen-

tence “I should have scarfed up on

that place in Hackney” became

the litany of a whole generation,

many marketing managers will ask

themselves in a few years: “why

didn’t we start earlier with AMS?”

The Amazon Marketing Ser-

vices environment will become

more and more complicated and

uncomfortable within the next few

years. When Headline Search Ads

and Product Display Ads can be

utilised by sellers as well, there

will be a spasmodic increase in

the necessary amount of CPC

bids, which is precisely the rea-

son Amazon is going to open

that flood-gate sooner rather than

later. When that happens, even

more know-how and even better-

optimised campaigns will be ne-

cessary to be able to address cust-

omers succesfully and efficient-

ly. The rapidly growing importan-

ce of Amazon as the #1 product

search engine creates a paradigm

shift and, ultimately, a budget shift.

After Google SEO came Amazon

SEO. Amazon Marketing Services is

the successor of Google AdWords.

Currently, we are witnessing one

of the most radical changes in

online marketing since Google Ad-

Words hit the market in 2000. Ac-

tively help shape your marketing

environment on Amazon now – for

your products and especially for

the future relevance of your brand!

44

LEDVANCE, with its headquarters in Garching near Munich, Germany is

an international company for lighting products and networked light ap-

plications that evolved from the divestment of OSRAM Licht AG in July

2016. It combines traditional lighting products with modern, pioneer-

ing lighting technologies. The company employs around 9,000 people

in 120 countries around the world.

Klaas Heinrichs is the Sales Director eTail EMEA at LEDVANCE and

is responsible for the Online Marketing sector within the LEDVANCE

e-commerce Unit. In this role, he has defined and organised market

place activities and online marketing campaigns since February 2016.

In doing so, LEDVANCE pursues ambitious sales and internationalisa-

tion targets.

How long have you utilised AMS

and how would you describe your

experience with it?

Was LEDVANCE able to increase

its sales via AMS in the long run?

We at LEDVANCE have utilised AMS since February 2016 in four coun-

tries. So far, I have had positive experiences with it, baring its constraints.

The performance, as well as the increase in market share, have proven

positive, but we as a company still struggle with the AMS processes

and the maturity level of the tool.

Definitely: yes. By means of the respective strategy and continuous

optimisation, AMS draws the attention of potential customers to our

products – exactly when they have the intention to purchase them.

Klaas Heinrichs

45

Would you recommend AMS to

manufacturers who want to launch

new products? What is your expe-

rience?

In which countries do you utilise

AMS, and are there any differences

between the markets?

Do you have any advice for col-

leagues who have just started with

AMS?

AMS is extremely effective for products that are not (yet) best sellers. The

tool enables the highlighting of underperformers and the launching of

new products and assortments. AMS improves the visibility of our smart

home assortment and addresses potential customers with the oppor-

tunity of smart lighting technologies for their homes. We also push our

new design-oriented filament assortment so that customers see the va-

riety of our products. AMS, however, does not provide sure-fire success.

It requires holistic knowledge about the Amazon cosmos, and a weak

product without potential or reviews is not going to be a top seller just

because of AMS.

We use AMS in Germany, USA and UK and we are a part of the Ama-

zon pilot project in France. Bid prices differ from country to country and

depend on the competition. Anyway, a strong brand awareness improves

the performance, but the AMS strategy should be adjusted to the market

and the brand conditions of each country.

A coherent AMS strategy and the integration of AMS into the bigger

picture is key, which means that AMS is not a stand-alone solution, but is

complementary to all online and Amazon strategies. Moreover, I recom-

mend a clear structure of the AMS account and a focus on efficiency and

scalability, especially for international companies. It is also advisable to

get professional AMS support from the start.

NOTES: