Ep. 037 Competing in a Competitive Sponsored Products Space

September 6, 2017

Amazon Sponsored Products is getting more and more competitive. Sellers can no longer let ads just run on auto-pilot. There are things Sellers can do to help be more competitive with the Sponsored Ads that they are running.

Former Amazonian Mike Ziegler used to work on the Sponsored Products team at Amazon and he shares several ways the Sellers can stay competitive in a competitive Sponsored Products space.

I want you to try something with me. Go to Amazon.com and search for “white socks.” Before you even start scrolling through results, how many sponsored ads do you see? For me, nearly all the results before I start scrolling through the results are sponsored.

Sponsored Ads started to be more heavily used in 2014. That coincides with the increase of competition of the Amazon Marketplace and each year the competition grows more and more.

“I think as that organic sales velocity started to slow in 2014 and for a number of sellers it has slowed since then just organically without them doing additional steps,” says former Amazonian Mike Ziegler, “A lot of them had to turn to a program like Sponsored Products to try to sustain and keep that traditional growth rate that they were seeing.”

Mike used to work at Amazon on the Sponsored Products team. Now Mike runs a company called Marketplace Clicks. He uses his Amazon background to help vendors and sellers with their Sponsored Product Advertising.

Mike says unless you’re a very popular brand, you’re probably going to have to use Sponsored Ads to boost your product on Amazon.

“I see it as being very difficult in the long run to continue to be successful on Amazon without advertising,” Mike says.

So with a very crowded Sponsored Products space,  how do you compete? Every day competing in sponsored products is getting more and more difficult. You can no longer create campaigns and simply expect them to produce and be cost effective. You now have to think through optimizing and maintaining your ads.

To start off, we have three ways to take a look at to help increase the competitiveness of your Sponsored Ads.

  1. Look at Sponsored Products as an investment. If you’re launching a new product, Sponsored Products can be a great way to get customers to find your product. This means you likely won’t be making money using ads, but if people don’t know about your product, you’re not making money anyways.  
  2. Look at the competition in your Sponsored Products category and your own products. You need to really know your numbers for each product. You can’t compete with other ads if you’re spending too much money on those ads. You’ll end up hurting your own profit margins. There’s a tool we really like called Sellics. Their PPC program just released an update that tells you the exact profit margins you’ll make on each product calculating your ad spend to be profitable for you.

“I think one of the reasons why it’s so competitive is that sellers are bidding very aggressively,” says Franz Jordan, CEO of Sellics.

If you know each product’s margins, you’ll better be able to bid on ads and create smarter campaigns then your competition.

  1. Manage your ads. Put time and work into them. This includes things like continual optimization and analyzing to make sure your ad is still competing.

“It’s through utilizing automatic targeting to source new keywords and continually refining the bids and the keywords that you’re choosing to target your products to,” Mike says.

There are some categories that are going to be more work than others and in order to compete, you may have source different keywords.

There’s something else you need to be doing to make sure that your Sponsored Ads convert. You need to properly optimize your listings. Your listing is your foundation. Even in the most crowded Sponsored Products categories, stronger listings will stand out and lead to more sales.

To create a strong listing start with your title. It’s the first thing customers see. A good title will cause shoppers to click on your listing. Then they’ll see your pictures and bullet points.

“Have I done everything I need to do to have the best product detail page experience that I possibly could from images to bullet points to using Enhanced Brand Content whenever possible, so have I done all those things because pushing traffic through sponsored products to an ineffective or substandard product page,” Mike says.

There are some situations where Sponsored Ads aren’t working for products. In some cases, like if are selling a supplement or new innovation, marketing on Amazon may not be for you.

“It should cause you to rethink your strategy and or whether or not you may want to pursue off Amazon traffic methods, something that potentially could be more affordable,” Mike says.

This is where you want your off-Amazon strategy to be really strong. You’ll want to push traffic to your website using Google Adwords or Facebook ads.

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