The Ultimate Marketers Guide to Advertising Auto Parts on Amazon
When it comes to selling online, there’s no denying the power and market reach of Amazon. It used to be that all you needed to do to make money by selling your auto parts on Amazon was to write a short description, input your fitment data and upload some product photos. But, everything in the world of Amazon automotive parts marketing is in a constant state of flux. What’s more, if you’ve kept your ear to the ground, you may have already heard the rumblings of a massive sea change taking place. In other words, if you’re selling on Amazon, it’s no longer enough to simply post and pray. For better or worse, in order to succeed on Amazon, mastering Amazon Advertising is a must. In the following marketing guide, we’ll wade through the overwhelming amount of data and conflicting opinions and distill for you three actionable tips to take advantage of Amazon’s burgeoning advertising platform today.
Amazon Advertising Makes a Big Splash
According to Digiday, 2019 is poised to be the year that Amazon makes a big splash in the online advertising game. Looking at the market share percentages of Google, Facebook and Amazon, this wouldn’t seem to be the case. Google and Facebook, respectively, lay claim to 37% and 20% of the pie, while Amazon seems to barely make a showing with a measly 7%. But, if you take a closer look, you’ll see something quite curious: Amazon’s advertising revenue grew an astronomical 250% in the third quarter of 2018 when compared to the third quarter of 2017. In other words, Amazon is gearing up to go large into advertising.
Amazon’s advertising revenue grew an astronomical 250% in the third quarter of 2018
Why should this matter to you? Simply because anyone who’s come to Amazon is already looking to buy! In the most basic sense, Google is an informational search engine, Facebook a social network and Amazon is a marketplace. In other words, search on Google and Facebook does not always (or even usually) end in a purchase. However, when you click on a sponsored product ad on Amazon, you are immediately presented with that familiar, yellow check out box and the odds are pretty good that you’ll complete the purchase. Sounds good, right? Well, it gets even better when you realize that one click on that ad not only results in an instantaneous sale but also increases organic search ranking. So brands that buy paid placements to in order to grow organic search ranking on consumer searches can dominate page one without the need for an ever-increasing ad budget. If you’re still confused, this will all make sense shortly.
Amazon Advertising Strategies for Selling Car Parts Online
Now that you understand why you need be advertising your automotive parts on Amazon let’s show you how without further ado. Amazon currently offers three ad formats as follows:
- Amazon Sponsored Product Ads
- Amazon Sponsored Brands Headline Ads
- Amazon Product Display Ads
Unless you’re a so-called first-party vendor or a registered brand (and most of us selling auto parts online are neither) only the first of the three formats will apply to you so that’s where we’ll concentrate our efforts. Amazon Sponsored Product Ads
The first thing to know about Amazon’s Sponsored Product Ads is that they’re pay per click (PPC) just like Google search ads. In other words, you only get charged when a potential buyer clicks on your ad unlike Product Display Ads which charge per impression. A great feature of the way Amazon has designed their sponsored ads is that they blend in with the organic search results. This is a marked difference from Google results which feature the conspicuous green URL and box that scream you’re about to click on a promoted link. The ads can show up at the top (the best place, obviously), at the bottom or even the right rail but, regardless of where they appear, buyers will view them as natural search results. Finally, all sponsored ads are designed around and triggered by keywords which you can choose to automatically or manually target.
Advertising Cost of Sale
If you’re going to be delving into the world of sponsored product advertising without the help of an auto parts marketing agency (or, even if you do have one) the key metric for you to keep an eye and get a thorough understanding of is ACoS or the advertising cost of sale. In layman’s terms, ACoS measures profitability by providing you with the ratio of ad spend to targeted sales and is calculated with as ACoS= ad spend ÷ sales. The following example should make this clearer:
ACoS measures profitability by providing you with the ratio of ad spend to targeted sales
Suppose you have a margin of 22% before subtracting ad spend which means that your break-even margin is exactly 22%. If you want to make at least 10% in profit after advertising costs, then your campaigns should reach a maximum of 12% for a target ACoS. Therefore, if you can optimize your ads to a target ACoS of 12% or less, then you’re making the profit margin you’ve targeted. Now that we’ve cleared up the basics, let’s get on to our top three, actionable tips to creating successful auto parts ad campaigns on Amazon.
Tip 1: Manually Target Your Keywords
Unless you have an unlimited advertising budget, you will want to manually target your ad campaigns. Be sure to include these keywords in the copy (text) of your product descriptions. And, as always, these need to look organic and can’t seem spammy or you will actually hurt your standing in the results. Finally, although manual targeting is always recommended, you can and should use auto-targeting as a keyword research strategy.
Tip 2: Take Advantage of Match Types
Speaking of keywords, match types are a great way to refine your search and keyword targeting. Just like Google AdWords, sponsored product ads on Amazon give you the option to select broad, phrase, exact, and negative match types to refine targeting. Using these match types well makes all the difference between a wasted budget and well-target, high-converting ads.
Tip 3: Optimize Your Campaigns
As with any ad campaign you need to be patient as your ads roll out until you have enough data to see what’s really going on. Be sure you set conservative budget caps to avoid blowing through your budget but spend enough to get good data. What the threshold is varies from product to product and is a decision best made in consultation with an Amazon advertising agency who can help you to conduct A/NB testing and monitor your conversions and page rank.
The Final Analysis
We’ve covered a lot of ground but there’s still much more that could be said. Wit that in mind, we’d be remiss if we didn’t point out the fact that consulting with an auto parts marketing agency who already knows the ins and outs of Amazon advertising is an absolute must if only to help you figure out ad spend, conduct keyword research and set-up/organize your initial campaigns. Whatever you choose to do, however, we wish you the best of luck now that you understand the power of Amazon advertising and how it can be harnessed to drive more sales and increase your profits.