Brad Moss, CEO of Product Labs, and I continue our conversation about Amazon advertising. If you haven’t checked out our previous podcast on the topic, check out Part 1 here.
This time we talk about how companies can start selling on Amazon – and what contemporary methods they need to utilize to be successful. One of the first things is to set up an effective keyword strategy… and even consider some paid ads.
But this is a whole different ballgame than how you’ve done that sort of thing on Google. Brad talks about what metrics Amazon is looking for which can place you on top of your category.
We chat about conversion rate – what happens once you get people to your product page. As it turns out, here are four key parts of that page that impact this metric. And Brad also gives us the low down on the broader display ad system inside Amazon – which offers ads spots in many places you wouldn’t think about…
Tune in to get all the details on that, as well as…
- The four parts of your Amazon product page that influence conversion rate
- What you don’t want to do with keywords on your Amazon product listing
- The metric for Amazon sales too many people are focused on… but should forget about
- The KPIs that matter when selling on Amazon
- Up to date methods to place in the top rankings and significantly boost conversions
Mentioned in this episode:
Steffen Horst: Welcome to the Performance Delivered, Insider Secrets for Digital Marketing Success Podcast. We talk with marketing and agency executives and learn how they build successful businesses and their personal brand. I’m your host, Steffen Horst. Today we’re going to continue our conversation with Brad Moss, CEO of Product Labs, about Amazon advertising. Welcome back, Brad.
Brad Moss: Hey, thank you. Glad to be here.
Steffen: Last time, we talked about top-level Amazon advertising. We talked about Vendor Central, Seller Central and the difference there, we talked a little bit about pricing. We talked about the different types of ads that are available on Amazon. Today, I really would love to dive deeper into the Amazon topic and talk about how can companies start on Amazon? What is required? Where should the company or the agency start if they’re interested in either getting their brand or their client onto Amazon?
Fundamental Requirements for Selling on Amazon
Brad: That’s a good question. Well, what are you the answers say just start with us and we’ll take care of everything for you. Because that’s what we do as a firm. Kind of the, let me lay out just a few ways of things to think about as you’re starting, you want to take a brand new brand into Amazon. Some of the key things that you need to look at are one, see if your products already in Amazon, if someone else has taken it and put it up in there. Two, you want to really, you want to go through their brand registry process. The reason you do that is that you get extra protection inside of Amazon when you do the brand registry process through Amazon.
Now to do this, you need a valid trademark on your product. And then Amazon gives you extra brand control and brand protection. And they also give you some extra features when you’re doing some advertising inside of Amazon. And that process is kind of the longest one, that’s why I say start that one right away. Then, you know, if you’re launching a brand new product into Amazon, though, you know you want to go in, you want to do some research around what the competitors are doing. You want to look at some of the keywords that the competitors are using and do some keyword research, whether it’s using Google tools.
Amazon does have some third party seller tools of people who’ve gone in and they kind of scrape some keywords and things like that. You can do a lot of it even manually though, looking at key competitors and downloading how their listings are looking for what they tell us in their title. Most people try and put the most important keywords in their title or in their, the key selling benefits, which are the bullet points on the products. I would go through and map out those keywords because that’s going to help set the right foundation for your products and what you want to be selling.
Or what you want to be targeting inside of Amazon because it’s Amazon’s a little it’s different than Google in that Amazon only cares about what’s selling, really. So if you want to rank number one, you got to sell more than the next guy. That’s it. Amazon’s whole thing is built to optimize everything towards getting the most money as a platform. And so if to get number one, you want to be selling more than anyone else. And I think last time we use the word marker, I think we’ll continue with that term of selling markers.
But if I’m looking at the word keyword marker, whoever’s number one they’re selling the most for that keyword. Now I want to look at strategically, hey, is that such a big brand where I think I can get up to number one, two, or three? Or do I want to look at you know, more specific sub-keywords, which might be like dry erase marker or markers for the office or something like that, where I think I could get number one on those key terms, even though the traffic might be lower. Now I don’t want to go too deep into keywords about, you know, for the questions and whatnot.
But I just want to lay out the foundation of, you know, you need to lay out kind of your keywords, when you’re saying new products and new things. You got to figure out what your keyword strategy is for your products because that’s going to dictate how you set up your listing because you want your listings to be displaying and indicating the top keywords, or the top keywords for your products. And then that rolls into your ad strategy. Because an add, now let me lay out the whole at the general ad strategy, what you want to do is you don’t want to just spend money on ads. You want to spend money on the keywords.
You want to spend money on ads, sure someone will click on it, they’ll buy your product, but you also want to spend money on the keywords that you want to rank better for. And so if I’m dumping a bunch of ad traffic into the word dry erase marker, I might get, you know, my return on ad spend for those particular keywords might be one. But I’m going to, I’m also going to boost my position inside of Amazon when I do that on dry erase marker. And so I’m going to get a bunch of organic traffic. So just natural traffic of people coming in who aren’t even seeing my ads, and they’re going to see my product, and they’re going to click on it.
And so I might get a bunch of traffic to my organic ranking as well. But that’s because I spent a bunch of money on the advertising word of dry erase marker. That’s why you need to understand your full keyword strategy so you can combine those two and you’re not wasting money on just spending money on ads, but you want to spend money on ads that improved organic rank in the positions that you want to improve on. Because then we put all that together, then you’re looking at, okay, I’m doing this for a reason.
I’m overspending on these keywords, that’s fine because the organic sales I’m going to get as a return from that are going to be worth it for the money I’m spending on my ads there. So, you know, setting up things basically that I would say, you know, kind of jumped into a decent bunch of deep concepts there. But you want to look at your keyword strategy. It’s really essential. And trying to figure out what the right keywords are. Now there’s, you know, I can, yeah, I’ll let you ask more questions. But there’s more stuff in there too.
Steffen: So it sounds a little bit like as if you have to buy your way into Amazon. So basically, if I heard correctly, you basically said obviously if you’re selling a lot, you know Amazon will favor you because the company sells a lot Amazon gets a bigger cut, etc. Doesn’t that make it more difficult for new brands, new products to come into the marketplace? And if it’s not the case, how does Amazon leveled the playing field, at least for a period of time?
Does Amazon Implement Measures for Equal Opportunity?
Brad: Yeah, so it doesn’t. So there’s, so every product that comes in has no index. So you can treat like a new product coming in on the net on the organic search results. Say the index goes from one to negative one, right? And I’m kind of have somewhat of an engineering background, so to talk in numbers. But say the index goes from negative one all the way to one, and you’re going to come in at zero. So Amazon, right when a new product launches, you have no history. So you’re coming in at zero. And what that does is actually gives you a little bit of a boost in your position, your ranking position when you launch a product.
So you have kind of a four to six-week window of when Amazon’s gathering data of how well your sales are doing. So someone’s been on the platform for six months or a year, and they get like one sale a month, they’re going to be really low. They’re going to be down to like the negative one of this index, right? If someone’s been on Amazon, and they’re doing the top of their category, and they’re doing, you know, maybe 20,000 units sales a month, they’re going to be one. Now you’re going to come in between right and zero on this whole thing.
So you actually kind of get a boost from people who’ve been on there for a long time. Now, it’s going to be harder for you to get, it’s still going to be hard for you to get up to number one. But that’s kind of the work you do. And that’s what some of the advertising is going to be going for. But that’s the general mechanism of how it all works.
Steffen: From a paid, or from a search organic perspective, there are several elements that define where your page ends up in the ranking. So in the search engine result page, does the information you have on, or brand has on their specific product page have an impact on the organic listing as well?
Brad: Kind of. There’s a few things that you can fill in about the details of your of the back end details of your product that put you in different kinds of categories and subcategories inside of Amazon. Now, no one really searches by those subcategories. People are all searching by keywords. So I think it’s like 85% of all traffic on Amazon done through keyword search. And so you do want to pay attention to where your ranking on those keywords despite, and you got to have those keywords in your products so that you get indexed for those keywords inside of Amazon’s system.
And if you have all that in then it’s all determined by how many people search for dry erase marker? What was the number one selling product for dry erase marker? They’re in rank number one. What’s the second-highest sales for dry erase marker? They’re number two. What’s the third? What’s the fourth? And they update that algorithm every day, multiple times a day. And so you could be shifting, you know, positioning all day on that. But that’s generally how it works.
Steffen: So kind of how ad usually is of the shopping window, right? For someone looking for a product. Then the landing page is kind of the store the shelf unit where the product is displayed. What are the important elements of a product page that help sell a product? Are there specific information? I mean, you mentioned a second ago, obviously more from an engine perspective, from an algorithm perspective that people should cover the keywords that describe, for example, a product. Or that they want to bid on. But are there certain elements of the product page that people should have in order to generate higher conversion rates?
Boosting Conversion Rates
Brad: Yeah, definitely. As I was kind of mentioning last time, there’s four key pieces that we consider vital for your conversion rate. And actually, when your conversion rate goes up or down, that’s what we look at. And we say, hey, someone comes in, hey, you only have a 5% conversion rate. We want to get them in Amazon, we would expect around 10%, by the way. And that’s data, you only get through the seller side also and selling through seller. You don’t get that data when selling to your vendor. But someone comes in and say you have a 5% conversion rate and say, Well, okay, let’s look at all these four factors.
And the four factors are the images, the text that’s describing your product, the price of your product, and then the reviews of your products. You know, some people go crazy over the reviews. They have to have a million reviews, they all got to be five stars blah blah blah. But you know, reviews are only one of four different factors that contribute to conversion rate. And, for example, we had a product that we launched that had zero reviews, by the time it hit a million dollars, right? And it’s because everything else is so well done with the product. So there’s those four key factors. Now, let me talk briefly about images.
We have three types of images that we really focus on. And those are in terms of in our terminology, we say you need three types of images for a product. The first type of images, so you can put nine images on your display page. So the first image type that you put in there we call product images. So those are you’re displaying your product on a white background. And that’s the best-proven through analytics and everything, all my Amazon numbers say you gotta have a product of the white background.
So that’s the you do one to three of those images, maybe a front view, a top view or a side view of your product just displaying that. Then the next one are what we call product feature images. So these are images that you call out specific features of your product. And many times they have graphical overlays saying hey, here’s this widget here. This marker lasts for 24 hours, and they have nice, you know, they have nice graphics on top of the product itself that are calling out specific benefits and features to the product. You can have two to three types of those images. And then the last bucket of images that we call out are what we call lifestyle images.
And so these are what are, these are pictures that showcase how the product benefits the consumer. The consumer’s lifestyle, or what’s the consumers benefit in their life of this product. And kind of showcasing that, right? So it might be selling dog toothpaste and the last image is a dog licking the owner’s face. Right? It’s like that’s the emotional benefit or situational benefit I get out of having this product. The dog’s licking my face, I’m not going to be fussing because its breath smells good. Or the dog’s face looks happier, or whatever.
So those are the three main types of images that we call out that you need to have to really market your product well on that display page. And images are one of the most important. They’re more important than text. And probably equally important as the price and the reviews for that page. And we’ve seen conversion rate jump, you know, 20% or 20 points higher, just by swapping like one image on that page. So I just did a bunch of AB testing as you’re adjusting the images and doing things like that. But it’s pretty cool to see what you can do there.
Steffen: So it sounds like images are kind of the non Plus Ultra, right? Well, the conversion rate is the most I mean, it’s at the end of the day, you know, you mentioned four things, which is price, images, reviews, and gosh, was the fourth one?
Brad: The text. Yeah.
Steffen: Exactly. But you know, we’re all, or most of the people are visual, right? And they want to see the products in context and doing that right already has a good impact on the conversion rate.
Brad: That’s right, and you got to think that you got to remember, over 60% of traffic is coming from mobile too. And mobile is all images, right? People are just scrolling through things on their phone. And Amazon doesn’t even show some of the text on your page until way down later when looking at an item. Because people are just looking through the images because that’s what they care about. So yeah, images are a really big factor there.
Steffen: So let’s talk about reviews. So when on other media channels, whether it’s search Facebook, and all the others out there reviews obviously play a huge role. I guess, the social stamp of approval or the thumb down because the product is not good. Is there a way on Amazon to collect reviews, so to collect more reviews than just organically?
Are Amazon Reviews the Alpha and the Omega?
Brad: So consumers have, or sellers have, they became obsessed with reviews about five years ago. And I don’t know who set people up to it. But just suddenly became super-obsessed with reviews. What happened and Amazon said, okay, sure you can, you can give people a product sample. And they can write a review, as long as you disclose that on the web page and whatnot. Amazon reversed that whole policy and took down hundreds of thousands, no, they took out millions and millions of reviews when they reversed the policy. So the policy is now that you can’t do anything to incentivize your review inside of Amazon.
So the best practice now is to provide A+ customer service. I mean, as frustrating as it is for some and some people do kind of they try some black hat methods and tactics. But the official way of doing reviews is to have a plus customer service. So think of all the ways that you can provide nice customer service. It could be you know, giving product warranties, it can be responding the moment something could be going wrong, it could be following up on a purchase to ensure that everything is exactly as expected for the customer. That’s really the best way of getting reviews. Unless you want to go into some black hat tactics, which we don’t do and don’t condone.
Steffen: How important that ad copies when it comes to convincing someone to go to the product page and what impact do they have in creating a sale?
Brad: So let me tell you two things. One is that there is no ad copy that you have control over inside of sponsored product system, or the Amazon marketing services system. So you don’t have, you can’t put any copy at all inside of your ads. Amazon doesn’t let you all it does is show your product. And it shows the product title. And so it’s easy, right? You don’t have to do any ad copy to do that. especially on the ad. That’s that core system. Now there’s another system that we didn’t get a chance to talk to you about last time, it’s a broader system.
And most people don’t have access to it, some sellers don’t. We do and actually service clients, we can, clients can come in through us and we can get them up on this platform into Amazon and do their ads in this other way. But it’s the acronym DSP. And it’s like the broader display, ad display inside of Amazon. And now this system allows you to have different placement, not just in that search results page. But you could have placement on the homepage of Amazon or in some product category pages inside of Amazon.
There’s a bunch of other places that Amazon displays ads, and you can have control and do ads through this DSP system inside of Amazon. And they’ve limited, they vastly limited who has control and who the gatekeepers are, and whatnot. We’re able to get some, you know, all of our clients in anyone can come into us and just go come through us to do this system. But those kind of add those a little more traditional, right where you’re doing. It’s like cost per view of the ad and not the cost per click. So kind of different system there.
And what people do is they generally use those to build better brand awareness. But we’ve actually seen some really good results, we’ve even said sometimes to the DSP system, you can get just as good or better results on the return on ad spend then you can see the sponsored products, actually. We’ve seen some really, really good results using that system. For some clients, some clients, it doesn’t work as well.
So it kind of depends. But when you’re using that system, then you do have creative, so you got to come up with. And it’s a little, but it’s not very large and a lot more dispersed. But you know, you want them all to be call to actions. And it’s somewhat important in those scenarios, but not near, it’s not as big or heavily scrutinized as I would if I was running from Facebook or Google ads. But I’m looking at my copy.
Steffen: If the advertiser can’t determine what the copy is on the sponsor product side, for example. And the other two ad forms, I would say it is really important that your title on your product page is properly optimized. What needs to go in there into the title to make it relevant, not only from an organic perspective, but also from a paid perspective to not fall behind the in ranking?
Brad: Yeah, that’s a real interesting question that I don’t know if there’s any strong data that says, you know, particularly one thing or another about, hey, you always should be putting in, you know, your top keywords first, or always second. I think a lot of that changes on a per product and per brand basis. Now, what’s hard to let me just say about titles as you don’t want to change them too often inside of Amazon because then it can actually totally mess up your indexing inside of Amazon’s system. And so I would be a little more leery about changing your title willy nilly inside of Amazon because it can mess up a lot of other stuff.
As opposed to if I was just running an ad, I could, you know, chase my ad much as they wanted and not worry about it messing up, you know, my products positioning or rank. But your title it can. Now Amazon’s given guidelines, very strict guidelines with what to do for a title and how many characters it can be. And Amazon wants you to have your brand name first. And then the in terms of your title, so you know, specimens markers, first, and then black, you know, dry erase marker or whatnot.
You know, some people follow that some don’t, I would say I’m a little more liberal in terms of putting my brand name first. I mean, we have clients with really long brand names. And I would hate to see the brand name, just take up the full title slot when someone’s looking on mobile because they don’t even know the product is because their brand name so long. So I would definitely put the most important, I mean, just general guidance say I would say put your most important keywords that describe your product first in your title. And if it’s a dry erase marker, that should be your number one keyword that you’re going for. Dry erase marker black.
Steffen: We now talked about, you know, elements of a campaign. So keywords, we talked about the landing page, we just talked about copy, which doesn’t really exist because the system uses the time title from the product page. So we’re ready to launch the campaign. Are there KPIs that a brand should look at in order to determine whether a campaign is successful or not? Are they different to other digital marketing solutions out there?
KPIs, A Cost and Ads Over Sales
Brad: I think they’re slightly different. The main KPIs that we look at, as I mentioned, we have a, you know, we have a full metrics deck that we look at. Products, daily, weekly, monthly. And the key numbers that I’m looking at every time I look into the deck to understand what’s going on with the brand. I look at, obviously the top line sales.
I look at what the traffic is that week if it’s up or down. I look at what the conversion rate is if it’s up or down. I look at your, well there’s a number. So there’s a couple other things that we look at. Now, let me explain real quick. Amazon inside the Amazon ads sponsored product ads, in particular, there’s a metric that Amazon is displayed, called ACOS. People call it A cost. it’s advertising costs of sale. It’s an A cost.
And people are really focused on that number. But that number is misleading and we don’t use it too often, actually. What it does is the number of shows you how successful that particular campaign is, but it doesn’t show you how successful your overall advertising is inside of a product. So people get mixed up on that. And they say, Hey, I’m spending over 20% A cost, that means I’m spending 20 cents for every dollar sale I’m getting. But that’s only for that particular ad.
And as I described before, if my ads are driving organic sales, and if I’m using the kind of what we call the correct strategy of using ads for more than just ads sake, and driving organic traffic too. We have a metric that we just call it ads spend over sales or ads over sales. And that’s the number I pay a lot more attention to. And that’s more of a traditional A cost number that you would get outside of Amazon for marketing, is what are my total ads, what’s my total ad spend divided my total sales, not just the sales that came from ads. And that’s a key metric that you have to calculate on your own.
Amazon doesn’t show that to you. But that’s essential whenever we look at performance of products, and ads we look at, you know, I’m saying with my total ad spend on sales. Because, you know, if I’m spending, who cares, my A cost is 100%? You know, maybe spend five bucks and get $5 in sales. But guess what that could that could have launched me up on a particular keyword a lot higher, and I could be getting, you know, $100 worth of sales from those $5 an ad.
And then that would get to the right, you know ratio that we’re caring about, which is being between 5% is like a really good ad spend over sales. If you’re lower than that you’re not spending enough money. But between five and 25% is usually what we see brands do in terms of an ad spend on Amazon. 25 is for you know, a lot more aggressive. And for those brands, even who likes like a supplement brands who have a lot higher margin that they can give up. But there’s different strategies within that five to 25%.
But that’s a key metric that we’re paying attention to, to see how well your ads are executing. And sometimes it’s, you know, we pump up a bunch of traffic and in new keywords because we want to rank on new keywords and get some organic sales from those new keywords. But using that metric, the ad spend over sales is really effective.
Steffen: In the past, the data available through the Amazon advertising platform has been sparse and reminds me a lot of the early Google days. Has Amazon gotten better with sharing data and helping companies like yourself and brands to get a better understanding of what works? What doesn’t work? And in more detail?
Brad: Yes and no. So you got to know how Amazon runs internally, Amazon’s run more like 1000 companies, they’re not run like one company. So when you see something come out of Amazon, it’s not Amazon. It’s one Joe Schmo and his department. One business leader like I was who was just running his little department and sending an email out to sellers to notify them of one thing or another. Now, my department may be doing something totally counterintuitive to another department. And so you have to determine as a seller whatever this notification is coming out is useful for me or not.
And if it’s not, then you gotta ignore it, despite how flashy or fancy that one communication may be. Now, the reason I that up is that there are a lot more, there’s a lot more interesting metrics on Amazon when you’re putting everything together, but their departments are all broken up internally. And that’s on purpose on Amazon. It allowed us you know, speed to develop more stuff faster, but really just hurts and sellers. In the end, you don’t have a complete dashboard. You don’t know what are the key metrics you should be paying attention to, because in advertising, the advertising arm of Amazon, they come in sponsored ads team.
And they may say, hey, look, here’s all this cool reporting. And that’s the reporting that they care about, the ads, but it may have nothing to, it may have limited impact for what really matters to you. Because you may need to understand, you know, what’s going on with your FDA in conjunction with your advertising. And that’s the reason that internally, we’ve built a full tech platform and system that allows us to see across all of those different departments. And look at the key metrics there.
Steffen: Thank you for joining the Performance Delivered Podcast and sharing your knowledge about Amazon advertising.l I definitely have learned a few more things, which is great. If people want to find out more about you and your company, how can they get in touch?
Brad: Yeah, you know, we have a website at productlabs.ai or productlabs.net. We have both. You can send us a note inside the message there or you can just, I think you can email. I think it’s email@example.com. Or just go to the website and hit that up. Then you can find more information about us and we’ll definitely get you back. We always want to hear what people have to say, what their problems are.
Willing to help out where we can because Amazon is very confusing. I understood that from first-hand experience inside of Amazon. It was even confusing to the engineers who are writing stuff and writing the code. So I’m sure it’s confusing to the consumers and the sellers out there too. But yeah, jump on our website and it’s up and we’d love to help people out or just answer questions or whatnot. So
Steffen: Great. Thanks, everyone for listening. If you liked the Performance Delivered Podcast, please subscribe to us or leave us a review on iTunes or your favorite podcast application. If you want to find out more about Symphonic Digital, you can visit us at symphonicdigital.com or follow us on Twitter at symphonic HQ. Thanks again and see you next time.