In 2023, a staggering 2.64 billion people will make purchases online, representing approximately 33.3 percent of the global population. From its humble beginnings in 1994 to today, Amazon has led the way as the dominant online retailer. Working with an Amazon ad agency like PBJ Marketing is the surest way to reach an ever-growing Amazon audience.
Amazon’s advertising platform reaches over 300 million active users and allows companies to generate keyword-focused ads with pinpoint accuracy. However, while there are some benefits to advertising on Amazon, there are also drawbacks.
Understanding these pros and cons will go a long to ensure you’re adopting the right Amazon ad management strategy. The goal is to work with an Amazon ad agency that can fully leverage everything Amazon ads offer.
Let’s start with the pros
1. Hit the Ground Running
Starting with Amazon ads doesn’t take much. The platform allows newbies to run ads fairly quickly thanks to its automatic targeting options. These targeting options simplify the process by doing all the heavy lifting for you.
Amazon claims you can launch a campaign with “no advertising experience” and “launch a campaign in as little as 5 minutes.” While this may be true, this initial campaign won’t provide you with the granular data you’ll need to zero in on potential customers. Regardless, getting started doesn’t take long, and you might just be able to generate some good returns.
2. Multiple Advertising Options
Amazon ads are a well-established platform with multiple ad types. These include:
Amazon Sponsored Products
Demand Side Platform (DSP)
Sponsored Product ads appear on Amazon Product pages. Sponsored Brands appear in Amazon search results. Sponsored Display ads can appear on product pages, listing pages, after-sales emails and newsletters, and customer reviews. Sponsored Store ads are for those with Amazon stores, while DSP ads appear across the Amazon ad network.
These advertising solutions don’t just appear on Amazon. They can also be found on HD streaming devices, Fire TV sticks, websites, Kindle, Amazon's IMDb, and the Amazon streaming service.
3. Ready-to-Buy Prospects
This is the most significant selling point; Amazon has a captive audience of users on the platform to make purchases. In comparison, Google Ads incentivizes users to click ads after searches or when reading content, and Amazon delivers ads to ready-to-buy prospects.
The intent of Amazon users is entirely different from those performing searches on Google. Amazon users are on the Amazon website to search and buy. They are ready and willing to make purchases if they find the right product at the right price and service. Individuals exposed to Google Ads may not intend to buy. They may be looking for an online resource, reading content, or researching.
4. Strong Cost Controls
Amazon wants to ensure that advertisers are comfortable with its advertising platform. This is primarily why they’ve made it easy to use and navigate for first-time Amazon advertisers. Another thing Amazon has done is provide excellent budget controls. Users can set a daily, weekly, or monthly ad spending limit, and Amazon will never exceed that limit.
5. Stronger Customer Insights
If you’re already using other advertising solutions like Google Ads, then Amazon Ads might provide you with some additional customer insights you could leverage across multiple digital channels. While both platforms are keyword-driven ad solutions, running Amazon ads might provide you with a better overall picture of your customers and their motivations.
Since both solutions run ads in real-time, using the information from both might help you optimize each of them. At the very least, you’ll have another source of valuable information that will help you better understand your customers.
The Flip-Side of Amazon Advertising
While there are plenty of impressive benefits to Amazon advertising, there are some potential cons to be cognizant of. Some of these cons are like roadblocks or barriers; getting started on Amazon ads may be easy, but establishing a foothold on the platform is another hurdle altogether.
1. Must Spend More to be Noticed
Yes, it’s easy to get started, and yes, you can generate results alongside plenty of customer-centric data. However, at some point, you’ll have to increase your budget to gain more traction on the platform to ensure your ads reach their intended audience. So, while the attraction of Amazon Ads can be its initial cost and ease of use, you’ll soon find that you’ve no choice but to increase your ad spend.
2.Competition for Ad Space
Amazon has been around for nearly three decades and already has established sellers on its platform. Every day, they use ads to reach their audience. Ultimately, the competition for ad space is very high. This is why it’s best to work with an Amazon ad agency that can leverage the granular data that puts you one step closer to your customers.
3. Amazon ads Require a lot of Time and Resources
It’s a bit of a catch-22; Amazon ads are easy to start, but you’ll need to increase your ad spend and use multiple ad strategies to grow your brand, which requires time, money, and considerable resources.
The more you grow, the more time you and your team must spend managing multiple advertising options. You’re selling products while building your brand, which requires a lot of people. You'll likely see diminishing returns across specific campaigns if you can’t afford to hire additional help. This can be incredibly frustrating if some of those campaigns have the potential for good returns.
4. Too Much Data
Every advertiser wants accurate, timely, and relevant customer data. It gives them insight into how each buyer persona operates, their preferences, and any emerging trends. Accurate data helps advertisers better understand what their personas searching for, what motivates them to buy, and what it takes to get them to come back.
While several companies have the tools, software, and teams to manage today’s digital world of big data, some do not. Each of your advertising campaigns will create unlimited customer data. That data will help you further optimize your campaigns which will help to reduce your advertising ROI.
Customer data is good, but too much can be problematic for certain companies. The data must be extrapolated and analyzed. Since these ads generate critical customer data in real-time, the amount of data generated is endless. This can often be well beyond the capabilities and person-power of certain companies.
Amazon Ad Solutions Made Easy
At PBJ, we take Amazon ad management very seriously. Our customers see us as their go-to resource and wise counsel for building their brand and increasing their revenue.
Amazon represents a giant opportunity to reach new potential customers. Success requires a committed, experienced, and knowledgeable tech-savvy digital marketing team.
If you would like to learn how our proactive campaign managers can help, contact us now.