I recently provided an extensive list of traffic sources for driving traffic to your Amazon listings and within it I covered a range of Paid and Organic traffic sources, comparing each in terms of their “Ease” and “Cost” – check it out here. As briefly highlighted in the article, some of the features of paid traffic optimisation are a little out of reach of Amazon Sellers from a technical standpoint – the application of tracking and conversion pixels and deep segmentation by customer behaviour such as “abandon cart” campaigns.
This article explores those technical limitations imposed by selling on the Amazon platform when thinking about optimisation of paid campaigns. Ezra Firestone’s 3 Pillars of Profitability are taken as the industry leading approach to paid traffic optimisation, so it makes sense that I review what aspects of these 3 Pillars are and aren’t accessible to you as an Amazon Seller.
So what’s the best paid web traffic source for Amazon Sellers?
To answer that question, we need to look at how you apply paid advertising to your business and what your goals are.
So in terms of using Paid Advertising and your profit goals;
- Are you trying to break even on PPC sales for organic ranking boost or rank maintenance on Amazon?
- Do you need to make profit on PPC sales?
- Do you plan on making a loss on PPC sales for the organic ranking benefit in the Amazon A9 Algorithm?
Make a profit. It’s obvious right?
Well… is it?
Is it really?
If you’re wondering about the costs involved in the different paid advertising options, I’d suggest you take a look at this article where we explored the costs, pro’s and con’s involved with every type of Paid Advertising for Amazon Sellers.
It’s worth noting that the cost benchmarks for Return on Ad Spend (RoAS) in that article are based on data from Andrew Youderian’s State of the Merchant Report 2019, from highly capable eCommerce businesses both on and off Amazon.
Here’s a snippet of the RoAS data from the report.
This is pulled directly from the report, demonstrating the calibre of businesses that make up the data sample;
“We had more than 400 qualifying merchants complete the questionnaire this year, with average revenues of $2.9 million per store, up from $2.3 million last year. Overall, the report represents well over $1 billion in total respondent revenue.”
These Ad Spend cost benchmarks are therefore based on eCommerce businesses who have a strong grasp of Paid Advertising, in some cases relying almost solely on it for their traffic. In a lot of cases, the merchants in the study are primarily selling off-Amazon, through their own online store, not through Amazon or Amazon FBA.
Those eCommerce businesses in the report running their own Shopify or WooCommerce stores have troves of information about their customers, their behaviour, what they bought, when they bought it etc. and all of this information can be used to optimise their paid advertising campaigns through highly segmented retargeting.
(This data can also be used to segment and optimise their Email Marketing in much the same way, but that’s another story)
As Amazon sellers, our data and feedback loops about customers and their behaviours are highly limited, the system lacks ‘Connectedness’. Lifetime Customer Value (LCV) calculations are pretty much limited to the first sale with limited understanding on the true LCV.
We can’t go and create a retargeting campaign on Facebook, Instagram, Pinterest or Google Ads for customers who “bought x but not y”, or win-back campaigns for customers who “visited a product page and added a product to their basket” amongst a bunch of other retargeting options.
Many many of the profitable retargeting tricks, refinements and optimisations simply aren’t available when selling on Amazon. There’s a lack of ‘Connectedness’ of data between Amazon’s systems and your own.
RoAS expectations therefore need to be adjusted downwards to account for the loss in profitability and optimisation capability we have when selling through Amazon.
Bad news, I know.
But best to accept it and bake it into the budget.
At this point it’s definitely worth mentioning Ezra Firestone’s “3 Pillars of Profitability” for paid advertising campaigns so that the contrast between Paid Advertising costs for on-Amazon and off-Amazon sales are understood.
The 3 Pillars of Profitability
Ezra Firestone articulates how you should structure paid Advertising in your business and your mind to achieve true profitability and scalability. It’s what Ezra refers to as the 3 Pillars of Profitability.
The 3 pillars are:
Pillar 1 – Awareness & Acquisition
In this pillar, campaigns are targeted at demographics and data driven audiences. Users who haven’t actively looked for you get shown ads in the truest sense of the words “interruption marketing” in most cases. As a result, you ad hits and it misses, and it misses and it misses.
Anyone can do this, whether on or off Amazon. But this is the most expensive pillar, acceptably running at a loss for eCommerce business owners with their own Shopify or WooCommerce stores.
Online store owners can run campaigns at a significant loss in this pillar, knowing that the profitability is yet to come in the Retargeting and Loyalty pillars that follow.
Amazon sellers REALLY need to be careful not to blow their profits trying to acquire new customers in this first of the 3 pillars, as there is a massive amount of opportunity to create campaigns in the 2 remaining pillars.
Pillar 2 – Retargeting
This advertising pillar is about chasing people around the internet.
They’ve interacted with your brand, you’ve used a pixel or other audience tagging mechanism to identify them and now your ads are being show to them on your chosen Ad platform. Note; you could target them everywhere using a multi-channel retargeting strategy.
There are also other options such as choosing to retarget people who’ve watched a certain percentage of your Facebook Video Ad.
In fact, there are too many retargeting options to list in this very short summary. You get the picture. You’re using behaviour triggers to change the way your ad campaigns behave for those people.
Amazon sellers have limited ability to place pixels and actually understand the behaviours of their potential customers. Your Ad platform also doesn’t know when the potential customer has transitioned to being an actual customer. You could therefore be targeting ads at people who’ve actually already converted to a customer.
This pillar should be your second most profitable pillar. However, as an Amazon Seller – this could easily still be a loss making set of campaigns.
Pillar 3 – Loyalty
Put simply, this is a form of retargeting campaign, however the ‘targets’ are existing customers. People who’ve already converted and bought your product or products.
Amazon sellers simply don’t have scalable automated, real-time access to the data required to run loyalty campaigns.
As an Amazon seller, you’re pretty limited:
- Can’t run “bought x not y” style campaigns
- Can’t run “visited shopping cart in last 15 days” style campaigns
- Can’t run “purchased over x amount of time ago” style campaigns
- Can’t run “abandoned cart” style campaigns
These are retargeting and loyalty campaigns. Those are the profitable pillars.
The Awareness Pillar gets you new leads into the top of your funnel. This is the most expensive pillar and is extremely difficult to make profitable, regardless of how well refined your ad copy, creative and target audience.
Demand Generation vs Demand Capture
At this point It’s worth thinking about Demand Generation vs Demand Capture.
For a more detailed look into Demand Capture vs Demand Generation and which you should use in your business, check out this article.
In the meantime, here’s a brief overview.
By having your product listed on Amazon and even running sponsored products campaigns on Amazon, you’re in the realm of “Demand Capture”.
The ‘demand’ has already been generated, and the shopper is seeking to make a choice.
‘Demand Generation’ on the other hand would be the equivalent of running a Facebook Video Ad to cold prospects. These people are soaking up the entertainment on Facebook and you try and encourage them that they need to purchase what it is you have to offer.
As you can imagine, it takes a pretty hot deal to pull people away from what they’re doing.
So Demand Generation is more difficult, more costly and overall has a much lower conversion rate.
Retargeting campaigns (as mentioned in the 3 Pillars of Paid Traffic Profitability above) may be seen as a middle ground. You’ve got ‘warm traffic’, but ultimately you’re still generating the demand with interruption marketing techniques.
So is there a best paid web traffic source for Amazon Sellers?
By now you might be feeling a little doom and gloom about using paid traffic sources such as Facebook, Instagram, Google Ads or Pinterest Ads. And rightly so.
Lot’s of what makes Paid Advertising profitable for Shopify and WooCommerce store owners is simple inaccessible to Amazon Sellers. Loyalty campaigns are simply out of the question, especially since Amazon started to remove even manual access to customer names and addresses.
So if you’re going to pursue a paid traffic strategy with Amazon, you’re going to have to do 2 main things:
- Accept and account for a sub-optimal RoAS in comparison with the industry benchmarks
- Implement tactics that allow you to mimic the activities within the 3 Pillars of Profitability as closely as possible
Number 1 is a question of economics for your products. Unlike Shopify or WooCommerce store owners, you’ll need to look at it from a single purchase perspective and NOT a Lifetime Customer Value (LCV) perspective.
If your product can’t stomach a 3 x RoAS as standard, Paid Advertising may simply not be a profitable option (if that’s your goal)
Number 2 is about taking advantage of what you HAVE got.
Mimicking the 3 Pillars of Profitability approach whilst selling on Amazon
When it comes to Pillar 1 – Awareness, it almost goes without saying that you can simply mimic what the Shopify and WooCommerce store owners out there are doing. However, as you’re not going to be able to access Pillar 3 – Loyalty, the most profitable pillar, you may want to ease up on the spend in the awareness Pillar – this Pillar is going to be filled with loss making campaigns.
In Pillar 2 however, we might have our Profitability answer….
If you have a brand website, with product pages setup that simply allow the user to click through to Amazon you’re a significant step ahead of a lot of sellers.
By implementing the Google Remarketing Tag, Facebook Pixel and Pinterest Pixel and Page View Tag you can essentially implement paid traffic campaigns that you’d categorise under Pillar 2 – Retargeting.
Don’t get me wrong, these won’t be to the level of sophistication you can achieve with your own online store, but putting Ads in front of people who’ve already visited your product page is a long way ahead of just spraying Ads across Facebook with “hope” as your strategy.
The reason I mention Google, Facebook and Pinterest together is because when you combine all 3 you’re very much “multi-channel”.
Google Ads For Amazon Products actually Include:
- Google Shopping (in search)
- Google Text Ads (again, in search)
- YouTube Ads (Sidebar and video)
- Google Display Ads (displayed on Billions of web pages on high traffic websites)
- Gmail (Yes, there are Ads in the free version!)
So you can’t really go far on the internet without being hit by an Ad served by Google
Facebook Ads For Amazon FBA Actually Include:
- Facebook in feed
- Facebook Messenger
- Facebook partner network
- Instagram in feed
Pinterest Ads For Amazon Sellers Include:
- Pinterest in “feed” (although not strictly in the same way as Social Networks)
When you combine all 3, there aren’t too many places on the whole of the internet a user can go without being hit with one of your Ads.
Plus, apparently it takes someone at least 6 times of seeing your Ad to actually notice it and pay attention. This means appearing across multiple channels, multiple times, in multiple formats is simply a smart strategy.
However, this is an expensive strategy if you don’t approach it using a Retargeting Approach. (i.e. using this approach for the Awareness Pillar)
Appearing all around the web for targeted mid and bottom of funnel leads is just smart, cost effective and scalable.
So the answer to which is the best paid web traffic source?
All of them.
When used as part of remarketing campaigns in Pillar 2 – Retargeting.
However, this is only accessible to savvy Amazon Sellers who’ve actually set themselves up a brand website with optimised product pages (not to mention have an organic and evergreen source of traffic to their site, but that’s a topic for another blog post!)
This is how the best Amazon Sellers, who are eCommerce entrepreneurs, tackle the problem of ‘Connectedness’ in their marketing funnel when selling on Amazon.