Q4 Amazon Advertising: How to Find the Balance Between Organic & Paid Traffic as Part of a Full Funnel Strategy

Oct 18, 2021 1:30 pm2:30 PM EST

Request The Full Recording

Key Discussion Takeaways

Competition is rising right along with the price of pay-per-click ads. The struggle to remain at the top of search results heightens during the holiday season. How do you optimize your paid advertisements with organic content to increase profitability during Q4?

Amazon is one of the main platforms where brands are fighting to stay at the top. More and more businesses are shifting dollars from Google to Amazon, in addition to increasing their bids. More than ever before, it’s becoming a pay-to-play platform. But that’s not the only catch — brands now have to improve their content strategy with videos, enhanced content, and more. How do you know where to invest your time and money?

In this virtual event, Aaron Conant joins Nicole Reich from Retail Bloom and Mike Black from Profitero to discuss how to balance advertising and organic traffic during Q4. They talk about key strategies for ranking on Amazon, how to determine your advertising goals, and how to plan your product promotions skillfully.

Here’s a glimpse of what you’ll learn:

 

  • Nicole Reich shares Q4’s most significant Amazon advertising updates
  • Mike Black discusses the rising cost per click, retail site advertising trends, and Amazon’s improving measurability
  • Optimizing your content for organic traffic and conversions
  • Keys to ranking on Amazon: titles, keywords, reviews, star rating, and enhanced content
  • Benefits of video versus photo content
  • How much should you spend on advertising?
  • Funnel framework versus performance-based framework
  • Gaining new customers when your competitor’s inventory is low
  • Strategically planning promotions
Request The Full Recording

Event Partners

Guest Speakers

Mike Black

Chief Marketing Officer at Profitero

Mike Black is the Chief Marketing Officer at Profitero, an eCommerce insights platform. Profitero powers sales for 4,000 brands across more than 600 retailers worldwide. Brands that use Profitero can grow their Amazon sales an average of 70% faster than category competitors. Previously, Mike was the Vice President of Product Marketing, Analytics, and Business Intelligence at Nielson and the Director of Marketing at Affinnova.

Aaron Conant

Co-Founder & Managing Director at BWG Connect

Aaron Conant is Co-Founder and Chief Digital Strategist at BWG Connect, a networking and knowledge sharing group of thousands of brands who collectively grow their digital knowledge base and collaborate on partner selection. Speaking 1x1 with over 1200 brands a year and hosting over 250 in-person and virtual events, he has a real time pulse on the newest trends, strategies and partners shaping growth in the digital space.

Nicole Reich

Co-founder and VP of Sales and Marketing at Retail Bloom

Nicole Reich is the Co-founder and VP of Sales and Marketing at Retail Bloom. Retail Bloom is a third-party, all-inclusive marketplace service provider that helps brands, retailers, and distributors drive sales on eCommerce marketplaces like Amazon, Walmart, and eBay. Nicole was a National Account Manager for the Retail Bloom Division at Aleva Stores before taking on her current role. Retail Bloom was initially launched in 2015 as a division of Aleva Stores and successfully spun off in 2020.

Event Moderator

Mike Black

Chief Marketing Officer at Profitero

Mike Black is the Chief Marketing Officer at Profitero, an eCommerce insights platform. Profitero powers sales for 4,000 brands across more than 600 retailers worldwide. Brands that use Profitero can grow their Amazon sales an average of 70% faster than category competitors. Previously, Mike was the Vice President of Product Marketing, Analytics, and Business Intelligence at Nielson and the Director of Marketing at Affinnova.

Aaron Conant

Co-Founder & Managing Director at BWG Connect

Aaron Conant is Co-Founder and Chief Digital Strategist at BWG Connect, a networking and knowledge sharing group of thousands of brands who collectively grow their digital knowledge base and collaborate on partner selection. Speaking 1x1 with over 1200 brands a year and hosting over 250 in-person and virtual events, he has a real time pulse on the newest trends, strategies and partners shaping growth in the digital space.

Nicole Reich

Co-founder and VP of Sales and Marketing at Retail Bloom

Nicole Reich is the Co-founder and VP of Sales and Marketing at Retail Bloom. Retail Bloom is a third-party, all-inclusive marketplace service provider that helps brands, retailers, and distributors drive sales on eCommerce marketplaces like Amazon, Walmart, and eBay. Nicole was a National Account Manager for the Retail Bloom Division at Aleva Stores before taking on her current role. Retail Bloom was initially launched in 2015 as a division of Aleva Stores and successfully spun off in 2020.

Request the Full Recording

Please enter your information to request a copy of the post-event written summary or recording!

Discussion Transcription

Aaron Conant 0:28

knowledge here together to stay on top of the newest trends, strategies, pain points, different topics, anything that's shaping digital growth today, I connect with somewhere between 30 and 40 brands a week to stay on top of those on top of those trends and help them out with everything from strategy to, you know, collecting their thoughts and pain points. And that's where we get the topics for these calls, also do a lot of help on the service provider selection side. So if anybody needs a short list of you know, there's Amazon agencies, it's a direct consumer performance marketing, international expansion, if you ever need a short list, shoot me a note and kind of the topics and we can connect on those. And those are all the top-recommended service providers from brands within the network as a whole. It's also where we get the resident experts for our call. So should be a great one today. A couple housekeeping items before we actually hit go on this webinar. And that is we're starting three to four minutes after the hour. And we're going to wrap up with three to four minutes to go on it as well. So just know you're going to get on to your next meeting without being late. The other one is we want these to be as educational and informational as possible. So at any point in time you have a question drop into the chat or drop into the q&a or email it to me aaron@bwgconnect.com And that can be an hour after call tomorrow next week, we usually get you an answer in under a day. So don't ever hesitate, you have any questions this space, just reach out, we'll get back with you. With that, I'm gonna go ahead and kick this off. So a lot of talk is there's been a huge emphasis on Amazon advertising this year. Obviously, that all doubles down in q4 everybody in the past year, you know, I should say in 2020 kind of got a pass on a any kind of really deep diving analytics reporting now, you know, at the CMO suite or the CFO level, but 2021 is probably a little be a little bit different. And so a huge focus on optimizing Amazon advertising as a whole. As we have it here how to find the balance between organic and paid traffic as part of a full funnel strategies. So anyways, we've got some great friends, great partners of the network as a whole that are here. And like I said, They're here to not only give us as much data as they can but also answer as many questions as we can throw at them. And I'm going to kick it over to you, Mike, if you want to jump in first with a brief intro on yourself and Profitero, and then we can kick it over to Nicole and Retail Bloom. But if you want to kick us off, that'd be fantastic.

Mike Black 2:57

Yeah, thanks, Aaron. So I'm Mike Black, I'm the Chief Marketing Officer of Profitero. We are an eCommerce analytics platform. And what we do is we help brands understand how their products are performing on 600 unique retailer sites with starting with Amazon all the way to Walmart, Best Buy and, and even JD and some of the sites around the world. And so really quickly with this visual tells you is what we're actually trying tracking daily for brands in terms of performance metrics, starting with is it available? Where are you showing up in search, to the healthier content all the way down to the ability to estimate sales and market share for your categories on Amazon down to the three p three p n one p so a full full view of the path to purchase and the experience that your consumers are having on these retail websites. Thanks, Mike.

Nicole Reich 3:53

Hey, everyone. I'm Nicole Reich, Co-founder at Retail Bloom. So just a quick snapshot. Before we get into our agenda. We specialize in helping our brands with whichever Amazon Walmart or marketplace strategy is best for them. So high level on the top, we have two models. The first one on the top is manage service models very familiar with Seller Central vendor central hybrid models, doesn't matter which way you sell on the platform. Our services are pretty consistent. So on the top portion brand protection, which we talked a lot last month in our session with BWG on that, but we also do content, customer service expansion, marketing and advertising and reporting. And then on the three piece I we do basically all those things above and then also stand as a third party seller so we're able to carry and sell inventory, do fulfillment services for the brands that we work with. So in today's session, we are going to first whoops sorry about that. We're gonna first talk a little bit about the state of Amazon advertising, how the space is changing and what it means for your business. After that, we'll talk about looking at advertising as a piece of a more holistic approach. Which should include promotions, advertising with a specific budget based on target audience content optimizations, and then helping you then understand how to track organic ranking from these efforts. So our goal after this session is that you leave here learning a little bit more on how to best measure the impact of this holistic approach, how to prioritize content optimizations going into q4, and then how to make the most of your advertising budget as cost per click rises. So as for the format, we're going to keep it pretty conversational. like we always do, Mike and I are going to go back and forth. And what do you see the space and how we use properties to take action? And then as always, Aaron will chime in with questions. I will say, Mike, and I have a ton to go over today. So if we don't get to every question, one of us will, we'll follow up with an email and shoot you what we think is the answer based on the questions that we don't, don't get into. So with that, I want to start with Amazon advertising. Some just big updates. So our biggest talking point is going into q4 outside of the logistics hurdles that we're seeing as wrapping our heads around the best way to handle the increase in competition and ad space on Amazon. In the right show chart, I pulled some cost per click data from one of our advertising partners pack view. And in this you can see how cost has changed over the past 12 months. On average, we're seeing cost per click for sponsored product ads increased about 36%. And sponsored brands increased 9%. This makes sense because on the sponsored brand side, again, only brand register brands can actually do those ads. So it's not surprising to see that sponsored product ads, which is open to all third-party sellers is getting more expensive. And that cost per click is going up. So when you think about why that might be happening, there's several reasons but we see two big things happening today. One more brands are understanding the importance of Amazon as it relates to eCommerce and spending significantly more than what they had in the past. Potentially, we're seeing brands, you know, shift ad dollars from Google and social to average out to Amazon, or maybe they're keeping everything consistent, and they're just increasing their bids on on Amazon. And then the other thing is that Amazon is more of a pay-to-play platform than it ever has been in the past. So just to give you an idea of what that looks like from the front end. If this is you know, there's only maybe three years ago when the most dominant ad space for sponsored product ads was just the first two ad spaces. So you know, back in the day, I can say Funny enough, you go to average to Amazon, you search for a certain word, and maybe the first two placements are sponsored product ads, sponsored brands weren't there and green sponsored video wasn't there in orange. But now when you look up something like Halloween candy, which I just pulled the other day, you can see the entire top section is paid in green, the sponsored product ads have moved from two slots to four slots, sometimes up to six, depending on how big the first row is. Then you have some organic on the right, that is followed by insert video, which is paid and then you scroll down with a little bit more organic and then some more paid. So it is getting much more paid. Paid platform, like I said, and that if you ranked organically, well, that's great. But know that these paid placements are on top of those organic spots.

Mike Black 8:26

Yeah, just to back that up with some data. So we have Profitero actually just recently used our, our digital shelf platform to examine the number of sponsored ad spots that are showing up on different retailer sites. So you know, what we just saw is Amazon. You know how much space they're allocating. And you can see at the top, that's actually the trend line that we're seeing with Amazon. So on average, we're seeing about eight to nine spots of real estate on page one that has to be purchased in the form of sponsored ads. And this is looking at an aggregate of keywords. So for some keywords, that's going to be more for some less, but in general. And what's interesting to me, is also looking ahead to seeing how other retailers are starting to follow. So the very next line where you see that big spike, not surprisingly, that is Walmart. So Walmart in the last year has almost tripled the amount of real estate that it has on its site that has to be purchased it purchased in forms of sponsored ads. And then behind then you see a little bit less of activity from other retailers. However, another retailer we're seeing movement as Home Depot. Lowe's just followed suit last week with their own media platform. So what's interesting to me is that you know Amazon is setting the trend and other retailers are followed. So a lot of the principles that we're going to cover today about how do you get more efficiency from your ad spend on Amazon or I think aren't more and more going to be applicable to other retailers as they build out their ad networks. And as many of them build out their three p marketplaces as well.

Nicole Reich 10:09

Cool. So that's the downside, right. But more optimistically, Amazon is also improving their visibility and giving brands and sellers more ways to measure the impact of their ad efforts. So yes, you spend more, but you can measure more, too, which has always been kind of a complaint, since you know I've been in the Amazon space is that, you know, they aren't always great at telling you where traffic is coming from, what the return of Amazon post for our for example. So we're continuously seeing huge improvements from Amazon advertising, and continuously seeing releases of new product information or new ways to look at the data. So they're doing so much of that right now that that blue link on the left side is a direct to the Amazon advertising product releases pages. And what that what they're doing, there's basically consolidating, every time they make an improvement, they're telling users about it. And I've, I would say that there's probably 45, in the last 30 days of just updates that they're coming out with. Some are big, some are small, some are for the International Peace, summer for domestic. But on the left side here, I basically outline some of the big ones that we see. So the top one, Amazon attribution beta. This one is worth noting, because it's been around for a while in beta form, but they recently built it into the Amazon advertising platform. And they're also it's also getting a lot easier to access. what the difference is of where traffic is coming from, where you're spending and where you're seeing sales results. So in the beginning, when Amazon attribution beta without, I kind of understood the concept of it, of being able to track for example, Facebook traffic that goes in to Amazon, but it wasn't clear, you haven't make a lot of assumptions. And they're getting a lot better about their tagging system, the way that you're setting up the campaigns. So it's a lot easier to see now, if you're driving traffic from Google, or to from Facebook to Amazon, what does that look like? What are you spending versus what are you selling? And then also the other way around, right? What are you spending on Amazon that may move to your b2c channel, or your social channel and purchase there. So that's been awesome. And then the other three updates are all related to sponsored display, which for us has been pretty insightful, because with a lot of the brands we've we've worked with, for many years, I've had smaller budgets, we sometimes neglected or didn't really understand the opportunity of sponsored display because we were so discouraged by the hate high a costs we were seeing early on. So for example, when we did you know branded sponsored product ads, we saw a cost of 5% for so long that when we came in with a little bit more upper funnel sponsor display ads, we all kind of you know, shied away from that because the return wasn't as immediate and the a cost was a little bit higher so that we actually we'll talk a little bit overall, when we get to budgets, but just high level, Amazon is giving you much more opportunity to tweak and optimize those sponsored display ads, you're now able to remarket and reach audience based on historical purchase behaviors, you're able to switch out your creative and server switching from starting from scratch for those call to action banner ads, which has been huge. So another complaint that we used to have, and it's still happening on sponsored brands is that we'll have a but we'll have some great history and traction on a call to action banner for Black Friday, right? Hey, here's some, you know, best gifts for Christmas, that'll run really well. But on January one, we basically have to start from scratch again, because we weren't able to tweak the creative. So you either have to pay for both ads to run at the same time when the new one increase its ranking or its traffic and then cancel it or completely cancel the old one and not have that visibility and see a drop in traffic. So that's been really helpful on the sponsor display ads. The other thing is you can now see no new brand metrics for sponsor display, which is available for sponsored brands. I haven't heard about this for sponsored products. But I think that would be awesome. And just another way to see how you are increasing market share and acquiring new customers on the platform.

Mike Black 14:14

Yeah, and I'll just say that, you know, the there are there's the data that Amazon will give you access to. But there's also a lot more data that you can get through third-party tools, such as Profitero that will give you insights into some of the competitive dynamics. So that's often lacking in the Amazon's platform is that deep knowledge of competitors. And so some of the data that will be really important to have into a season like this is one, having competitive sales and market share. We'll talk about it later. But so important to have that benchmark to help you understand what's moving the needle, as well as really identify and make sure you're going after the right competitors to be watching. Second is pricing and promotion. So all of the variables that are happening with price as much as you're getting Drilling your price, your competitors are too, so important that you're able to see what they're doing from a price and promotions perspective to be able to capitalize on that. And then also, as we'll talk about, it's so much more important than ever to have a good view of your competitors, inventory, health and out-of-stock. And those are things that you really can get using third-party tools that are going to go out and collect that data off of website. So just a couple of other examples of ways to go go that next mile and maybe get access to insights that your competitors don't even have. So

Nicole Reich 15:31

knowing that all costs have gone up, right, manufacturing, labor and materials, great, um, just speed of having availability of inventory. You know, I said logistics in the beginning being our biggest pain point. As soon as it's close up there, right? So it's a little hard to talk about, yes, all my costs are going up. Competition is is bigger on Amazon than ever has been in by the way, now you're telling me that I have to pay more in advertising? Yes, that's basically what we're saying. So with those considerations, we're really making a push to look at your Amazon strategy more holistically, which should be more full funnel than just paid. So we'll start with content optimizations questions that we get all the time, have a huge catalog of minimal resources, how the heck do I know what to do first and not overwhelm my marketing or creative teams, when I go to them and say, we need 12 videos, they all need a look like this. And by the way, I need them tomorrow before q4. So I'm gonna pass it to Mike to share some data about what they what he sees, moves the needle the most. And then after that, we'll talk about how we're using that data to make decisions and prioritize content on our end with our brands.

Mike Black 16:40

Yeah, so one of the one of the very first things, Nicole, you were talking about the importance of balancing with organic. And we have actually seen this in our own research at Profitero, where you can get about four acts more sales by getting your products to page one organically than through paid ads. So certainly, the Earned approach matters. But how do you go about prioritizing that and one of the things that we recommend, and you can do when you have the right data set, such as search placement, and content attributes, is that you can do a basically try to reverse engineer some of the algorithmic components of a retailer site. So what you're looking at here is actually heat map that shows which content attributes are most highly correlated, or highly related to increases in search rank and search position. And what you we included other retailers here too, because you might want to think about, as I'm sure many of you sell on platforms, other than Amazon, and you also want to think about prioritizing across your portfolio. So what you're going to see here is effectively of all things that you can focus on to drive your search placement up on Amazon, you want to be focused on titles, right keywords and titles. But you also want to be focused on reviews and star rating. So it's as important that you make sure you have a strategy for title optimization, as well as reviews that you're also trying to do everything you can to create more reviews for the products that you have. And so that's a really important thing that you want to sauce. Therefore, your strategy for boosting search results on Amazon is going to be more multifaceted, than if you look at some of the other retailer sites such as Kroger, for example, it's going to be fewer things that you can do to influence. So it's really important that you understand what are the things and the levers that drive organic search placement and then have a strategy accordingly. That can prioritize those things and being able to look at products that are missing key attributes in their titles as well as products that are underperforming benchmarks when it comes to reviews, that will give you a leading indicator for how to dissect your portfolio. Next slide is the other thing that we have studied and looked at is just the the correlations between increases in sales, traffic conversions with the addition of enhanced content. And so what we what done has looked at how adding videos how to adding images and how improving enhanced content adding a plus content has an impact. One of the things that we've consistently seen seen is that adding video to a product that does not have video, on average can increase your sales by almost 60%. And then you can see at images is not too far behind. And on average increasing sales by 45%. So one of the lowest hanging fruit that we see is being able to just do an analysis of your portfolio to identify products that are missing video missing images, and just start by working on those products to get them up to benchmark. And so those are things that are ways to prioritize your where you attack by looking at where you're going to see the greatest Left and we're gonna see the greatest impact. Really

Aaron Conant 20:03

quick just a question just a reminder those who have joined after we kick this off, you have any questions along the way drop into the chat drop into the question section there or just email them to me aaron@bwgconnect.com. But when it says number of times keywords are mentioned in titles, is it talking about keyword repetition or keyword variety,

Mike Black 20:23

keyword repetition of the same keyword for this particular cut we're looking at.

Nicole Reich 20:29

Cool. So considering that data, when we start working with brands, we we start with kind of an optimization scheduled by month. So we take the clap catalog and say, okay, what's your top 8020? Right? How do we prioritize this 40,000 or 40,000 skews down to per month optimization so that it's best digestible for both sides. Because we know when we start working with brands, they have to give us assets, maybe sometimes they have to create assets. So there's some weight gain there. So we start with just saying, Okay, forget the entire catalog, let's narrow it down to maybe rounds of content of 10. So pet 10 parent styles at a time we're optimizing each month. And as soon as one group is done, we kind of move on to the next. So what I've done here is kind of outline the the way we prioritize those top 10, for example, or run round one content. So when we start, we focus on product merges. First, which I'm going to we talk a lot about the other ones below this. And I think that there's sometimes a big Miss of the value of product merges and how merchandising can make a huge impact to review. So I after we get through this slide, I'm going to touch on that one specifically. But we grouped product merges together with titles and then Amazon store. And I know that's a little different than what Mike had just mentioned. But the reason that we do that is mostly for advertising is that if a brand already has a good strategy, we know that we're going to need the titles optimized with keywords if they allow it right. And we know we're gonna have to have the Amazon store update to drive our advertising efforts. So that's usually prioritize first, especially if the brand already has a pretty good presence on the platform. But then after that, we focus on imagery video, and then product bullets, usually in that order. Again, like I mentioned that video moves drives conversion more than imagery, right? So it would make sense that we do that first. But what we find is that brands get good at imagery first, and then they do video second. So the reason a lot of times we do imagery first is because we take all of the assets that are available and say, Okay, what can we get on Amazon already without doing anything, right? And we look at the alternate images, we look at the size terms, and then from there, we say okay, now what do we need for these top 10 products. And a lot of times it's text overlay comparisons, right? It's showing the customers how they can use the product. And then using that same type of information to build out the videos, then product bullets, then a plus pages, then the new brand story. So of course, we want to do everything all at one time. But because a lot of the catalogs are so big, and sometimes the assets aren't always available, we start to prioritize in this way. So doubling down a little bit on product merges, I wanted to show you the power of just getting like images like products on one parent. So the goal of doing product merges is that in this scenario, for the example on the right blackhorse decor, one of the brands we work with, they have over 60,000 skews in their catalog. And basically prior to doing the merchant merges it was listed, get it available, you know, if it's if it's one lamp that's rustic, and then the next one lamp is beach, let's just throw them up on Amazon. And if it sells great, we'll optimize each product listing and title. And that was a lot of work. And it was a lot of seasonality going in and out of work. So we found ourselves updating content just for the next month or to go out of stock. And then all of that work was basically meaningless. So we switched up our strategy earlier this year to say we're going to put all of the lamps together, we're going to make sure that people understand on the left side the different videos or the different imagery, why they're different, right, make sure it's clear that this one image is different than the next this this product is different than the next. But what happened was that basically overnight, we grew that parent hasten to have over 562 ratings. And with all those reviews, the organic, the ranking got better and the sales got better, which I'll show you in a second. So it was merging listings that were like knowing that some will go out of stock and some won't and new products will come out and we'll have to merge them to our product listing. Then we optimize titles, we figure out the secondary images. You know, we optimize the bullets we add video. This particular one doesn't have a video with the next variation does so you have to be careful about that. But then we wanted to measure what this would what what the results were and what we found. Is that when we started merging? In June, this is kind of a chart of the ranking, we saw a huge lift in ranking. So you can see that this chart went down right after the merge, the listings were together. So the lower the ranking, the more it's selling, right. And then when we added the content, we saw another dip. That was around the end of July into August. And then we added images and saw another dip. So over this call it four month period, our ranking improved by 42%. And our units sold improved by 35%. So the way that we did this test is we looked at all of these product listings again, right as separate different parents, one product one parent asen, measured what their ranking was measured what the sales were. And then when we combine them, we said okay, collectively, how are they doing now? Sorry about that. I know you guys, I always complain about how I switch to the slides too fast. So hopefully, you can see this a little bit of back and forth there. But this is the power of merging is that yes, content will move the needle, yes, imagery will move the needle. But when you can increase the reviews and get it all in one space, it's a better customer experience. And then Amazon seeing all those reviews in one place, and and providing a little bit more credibility to that parent asen.

So other merchandising considerations, I would say, is trying to find the balance between share of shelf and reviews and ranking. So a lot of that is sometimes we get pushback, and sometimes it doesn't work for smaller catalogs, when they say, yeah, we can merge all of these. But then on the first page, we're losing real estate, because Amazon will only serve parents, right? So it's, it's a lot of testing that has to be done. So on the right side, I'll give you another example. On the first one box, you can see all the single units of another one of our brand postdocs. And what we found is that after a couple years, these one stock product listings right had a low margin because the AO v was so small. So what we wanted to do was add variations or case packs, which is on the right, to increase the ARV, and then basically drive the margin like the pickup right to the bottom line. The problem with that is that when we created those case backs on the right, there weren't any reviews. So we had our bestseller listing, and then we had no traffic organically happening on the keys pack level. So what we started with was, we first took those case packs, put them to the single to get the lift to get the visibility, knowing that people were going to purchase the case pack of two because of a discounted price, waited for the reviews to come up on those children items. And then after then we basically split the parent again. So now that the case facts are on their own, you have two packs, three packs, and then you have the single packs on the left. And that approach works really, really well I will tell you, it probably took, you know, six to 12 months depending on the different styles. And there was a portion that on the single packs, it looks a little messy, which is why we wanted to clean it up. But that was the best way of us getting reviews fast and not having to go through like an early review program or an Amazon buying. So I would say that would be a consideration right? Make sure that your catalog is so small, if you put your two bestsellers together, that probably isn't the best approach because those probably both worked well organically ranked on their own. But if you're trying to expose another product that is completely starting from scratch, or is has lost visibility, put it on your target Halo product, and then separate it after it has that ranking.

Aaron Conant 28:42

So just a really quick, there's a couple questions that have come through around content as a whole, for number of characters in product title that was read for Amazon, how many characters is too many. And I have one word for that.

Nicole Reich 28:55

So Mike, I'll say my perspective, then you can quote me if I say the wrong way, but so there are different keep the number of characters per title changes based on the category that you're in. So I would first check there. So it used to be that basically every category, you could have 150 characters in titles. Now they're limiting that in certain categories. Mike, are you seeing the same?

Mike Black 29:20

Yeah, so basically, that's why it's valuable to have benchmarking built in. So every category is going to be different. So what you want to be able to do is benchmark regularly on either bestsellers as a as an indicator. Or another thing which we do is we have benchmarks based on any retailer on page one, placement so you can see what are the common characteristics or content attributes for products that are ranking on page one, and that's going to be category specific again. So that's where the value of having benchmarks is really important and it does change to Nicole's point. It's something that you have to keep taking a look at and refreshing Awesome. So

Aaron Conant 30:02

next one is how is it that video increases traffic more than eight enhanced brand content a plus? Surprising? You know, given that a plus content provides more keywords, the conventional wisdom was always that video increased conversion, but not necessarily traffic, we'd love to here is Amazon just indexing against videos now.

Mike Black 30:23

I have a theory on that. And I think part of it is there's a little bit of a reinforcing loop. So anytime you improve conversion, improve traffic, I think right? Because you're effectively if you're improving conversion, you're good at probably see a little bit of a tech up on where your search placement is, as well. So sometimes you see these traffic and conversion metrics. And it's like, one could be supporting the other in some ways. So that that's one theory that that I have on that.

Nicole Reich 30:54

Yeah, I would I would add to that. So two different two things. One, it comparing a plus two video. So if you think about, you know, let's call it 50, even maybe more percent of sales happening on mobile, few customers are scrolling all the way down to get to a plus, so they don't see it, it's buried. Video is right at the top. So is imagery. So that's really helpful. That's the way customers are looking at your products. And then to further kind of backup Mike's point. It's, it's that flywheel effect, right. So if they go there, if they convert, because of the video, Amazon's gonna see that give you more credibility, and then your organic ranking will lift. So it's not a direct, I guess what I would say is you can do a B testing, right? We can do with your property or with your seller central. But Amazon's not going to tell you, you have to make some assumptions, just like they, you know, Prophet Tara did in this data to say, all right, when I added my video, and all other things were constant, what happens is sales, traffic and conversion. And most of the time you see the conversion first, which then triggers the traffic, which then triggers the sale.

Mike Black 31:57

Yeah, one other point to that, too, is I've done a B testing studies with clients. And it was to change out the not the hero image. But the secondary image image in the in the carousel. In one of the things that this client did, it was actually matched like it's a public case study, they they changed the the image of this shape, the safe, they were showing in the angle. And the metric increase you saw was both almost consistent was about 25 30% increase in conversion, and then about a 25 to 30% increase in traffic. And then that's it. And so, so changing the image to increase conversion is also having an impact on the traffic and its placement, basically.

Nicole Reich 32:42

Yeah, cool. So bear with me as I click through the rest of the slides for a second and get back to where we were. Okay, so flipping now to advertising. So we talked a little bit about content, helping you guys prioritize what you need to do first, let's go back to advertising. Again, the cost per click is increasing, right? What do we do about it? So this is another challenge for us. That when we approach advertising, it's a little bit different than what we did in the past. So Gone are the days that you could set up branded campaigns see a really low A cos have that conversion, you know, spark the flywheel, and now all of a sudden, you don't have to pay as much for advertising because you have all this organic lift. That was great. That, unfortunately, is no longer the scenario that's happening on on Amazon. So instead of that what we are starting with, again, when we're approaching high-level advertising is what is your goal of these advertising efforts? Okay, and where are you targeting? Or where do you want to target the customer in their lifecycle or in the funnel, right? So at the bottom is conversion, which is what we're very typically used to that we used to love right? So thanks sponsor product ads, branded keywords, for example, you know, you you're selling Nike shoes, you bid on Nike shoes, they purchase great, maybe your tacos budget at that point was two and a half percent. Let's say after that, you say, Well, you know, I want to talk I want to go up a little bit in the funnel, I want to go after running shoes, athletic shoes, well, when that happens know that the cost per click is more expensive, because those those keywords are more generic, right, we're on the right side of this chart right now with the generic keywords. And with that, you need to be increasing your tacos. You need to be spending more knowing that you might not get the return. And then from there on the right side, right, it's competitor so now you're going after Adidas Under Armour, those might not convert while you're trying to acquire or conques other competitor customers that were already looking for Adidas and now they're going to be pulling brands for Nike, right? And then you can go even broader to category or demographics. So maybe now you're going after the running space as a whole and you want to target awareness. So as you go up the funnel, just know that you have to increase your budget and know that you can't expect a return Right away. So on the right side, we have our keyword types or target type, you know what type of words we want to use, or who do we want to target. And on the left, we have the different types of ads that support those efforts. So I know sponsored product and sponsored brand can be used, you know, pretty similarly. So it kind of depends on what type of terms you want to go after. But just high-level right sponsored product ads, if you really want to just own your brand, you set a branded ads for the top headline banner, those sponsored product ads, you may need two and a half percent of total sales to be invested in advertising. But as you go up, for example, you need to be adding 5% 10% whatever it might be. So a lot of times we get a question from brands, you know, what's our ideal tacos? It depends, it really does depend depends on the category depends on your ARV depends on how many people are in the space driving up that cost per click. But what I will tell you is, is that if your goal is to increase awareness, you have to spend a lot more than if you Your goal is to increase profitability, right, because you're going to be much more selective if you're looking at the bottom line, which means you're going to go down funnel. But if you want new two brand new customers, if you're looking to acquire customers know that you have to spend more as you go up.

Mike Black 36:21

Yet another so big fan of frameworks. funnels are great frameworks. But another framework I love to talk to brands about is a performance-based framework. So in addition to planning your budget based on goals, it's also important to take an outside in look and look at actually what products are performing the best are the healthiest, retail ready healthiest products in your portfolio. And what you see here, this is a stylized version of a visualization we have in our app, which plots your essence on a vector of traffic, high traffic, low traffic, high conversion and low conversion. And so what that allows you to do is to understand which products are actually converting the highest. So if you look in the upper right, these are your high traffic, high converting products. These are the products you want to defend at all costs. These are your hardest working products. So you may want to really up your defensive spend in that segment. versus if you look at the lower left quadrant, these are the products that have low traffic, low conversion, typically we find these are the products that are struggling the most to stay in stock. So it's very risky, and maybe not efficient to be allocating too much dollars to this, especially now with a lot of supply issues. And one of the biggest opportunity is going to be in your lower right quadrant. Here you're going to find products that have high conversion, because low traffic, they're essentially invisible to most shoppers. So what we typically find is one way that you can grow market share around appears like this as to actually look for some of these products that have low traffic right now and actually shift some of your budget to them to actually gain share. And we've had customers do this quite successfully and have been able to grow their market share when they thought that they were tapped out. So oftentimes you're tapped out you think we got the market share? Where can we go? That's when you have to do this kind of analysis and go to that next level, and really start to understand, where am I spending my dollars on a product level, not just our goals? Let's look at what's working the best for consumers and what's working the best for the retailers. And let's shift our budget accordingly. So there's another framework, I would encourage you to to investigate and use as you're planning your budget for for q4 and beyond.

Nicole Reich 38:41

Yeah, I think I missed that part. Mike. Sorry. So just you know what the portion I was talking about was high-level strategy. Right? How do you determine your budget? Now Mike is talking a little bit more tactical, right? So here's our budget where we've already approved that over the next 12 months. How do we make the most of that and pivot quickly so sorry, I missed that Mike.

Mike Black 39:00

Yeah, just where do you spread your you know, where do you spread your bets at not always even right, you need to pick particular products to rally behind Yep. To the other act to attack speaking tactically, one of the very most important things run advertising way to win is to be ready to pivot quickly, especially in the time that we're facing right now with a lot of things shifting daily. And one of the best practices that we're seeing brands do more and more is tracking their competitors inventory health, and setting up alerts. To be notified when a product is a competitive product is out of stock. Whether that is sometimes we see it set up on a weekly basis. Sometimes we're seeing it set up on a daily basis. And what that will do will allow you to understand potential competitive products that you want to conquest with sponsored ads, but also product ads, actually getting your product on their, on their pdps. And this is something that you want to have set up on, you know with with data that's available. On a daily basis. Next slide, Nicole give you a really good example of a client that did this. Well last year. We have a client of Profitero midsize toy brand that is competing very heavily with Barbie. They sell doll houses. But as we all know, Barbie owns the dollhouse world and very hard to compete with a brand like that, that has national advertisements. So one of the things they did is they started tracking Barbies Barbie dream house, they're out of stocks during the holiday season. And lo and behold, they were able to identify that Barbie dream house was out of stock. They then ran conquesting campaign sponsored ad and product campaign, they were able to increase their share of page one on Barbie by 3x. And then actually achieve about 10% week over week incremental sales. So basically siphoning Barbie traffic their way, just an example of something that we think it could be leveraged a lot in the holiday. And then finally, you know, in terms of measuring success, you know, one of the things you know, market share is going to be one of your top lagging indicators, that's going to answer the question when the dust settles, how did we actually do and during the pandemic, so oftentimes, we've seen categories just grow, and everybody's growing, and then you're like, Alright, let's pat ourselves on the back when in reality, what you will find is that your competitors may be growing faster than you gaining share faster. And that's going to be an ultimate test for our strategy is really driving that growth. What are our competitors doing that it might be better and so you want to have access to one p market share to be able to look at that as well as access to if you're selling one p three p sales data, where are you losing opportunities to sellers, or by losing the buy box. So we you know, we recommend having market shares being one of your one of your scorecards that you're looking at throughout the season.

Nicole Reich 41:55

So lastly, we want to talk about balancing advertising with promotion. So if you're spending $50,000, a month, for example, on advertising, who's to say that some of that budget is better spent through campaigns like coupons or best deals. And on top of that, I know on our last call, it was totally the the pricing police and told everyone that they need to increase map and decrease sellers and keep pricing consistent. But sometimes, you know that it's good to have consistent pricing. But sometimes there are challenges with that that you might not anticipate.

Mike Black 42:27

Yeah, and Nicole, you're right. That's good advice. Because we often see that there's a lot of money being left on the table. And brands do have a right to take that increase. But it is important again, to get back to this idea of pivoting that if you're going to make those moves, it's all a matter of degrees, you may overshoot the mark or you may not, you may see an unintended consequences. So this is a an example of a product that, you know, effectively increased price, which is great, but it did have a negative impact on organic rank. So what does that mean? Well, it just means that you have to have if you're going to be making moves like this, that you're going to have to have some fluidity and flexibility. You may need to have some may need to run a promotion to offset that. You may need to up your advertising spend offset that the most important thing is that you have visibility quickly and you don't wait two weeks or a month to find out about this that you're finding about the about this very quickly so they can course correct.

Nicole Reich 43:25

Right and plan ahead of time, right? So in the whole map leads that third-party approval piece, running a coupon when you know your biggest other customer retailer is doing their biggest promotion of the year. Probably not the best bet, right? So be strategic, understand which retailers are what other platforms are running promotions for your your products even consider what's happening in brick and mortar and then plan accordingly three months in advance to say okay, how do I supplement or how do I complement the other promotions that are happening in the space and keep in mind that I'm measuring my organic rank when that happens. So I wanted to give you just a couple of example of wins that we've done for a couple of our brands that are very mat conscious, they are definitely the leaders in the space, they want to make sure that they're they're holding their high-level pricing, supporting their brick and mortar efforts, but then still making sure that they don't get lost in the shuffle versus a lot of you know knockoff brands or competitors emerging brands in the space. So in this example, for beauty blender right high, the best beauty sponge in the market. They by far own that term, but they're significantly more expensive than a lot of the knockoffs in the space. So how do we counter that by still supporting our brick and mortar or other retail sites? So what we've done is gotten creative around certain promotions or liquidation products, discontinued products that we can use to get new customers but also use like whether there's still consistency and availability. So sometimes we see discontinued product. It's like great, we can capture new customers, it's a lower price, maybe they'll they'll buy the full price product later on, that's good. But on Amazon, if it's going in and stuff, then you're losing that traction, you're losing that reviews. So in this example with beauty blender, what we did is we created a liquidated or discontinued our promotions product listing. So every time that they have products that they know they're going to discontinue, we're adding those as children to this one parent, keeping the reviews the rankings, and then measuring Share of Voice or share shell after this is happening. So our goal with this test is basically to say, okay, maybe beauty blender, you know, when they see the sponge at full price, they see the knockoffs next to it. How do we counter that, let's get them in at a promotional deal, that's not going to impact our other styles, but then still get new customers in, that might end up buying the sponge later on. So that's one thing that has worked really well for us. The second one, another high-end beauty product, mountain AND gates, one of our other clients, this one worked out really well, they are very conscious of price. And I totally understand why. But at the same time, they're trying to sell a natural organic deodorant in a very, very, very competitive category on Amazon. So if you type in organic deodorant in the Amazon, you'll you'll probably get some of the players there. But sometimes we see cost per clicks as the highest for $6 a click, which is just super hard to stay profitable. So what we tested was that since March of this year, being very specific about promotions, and then measuring the long-term ranking of that promotion. So in March and April, we had a very short window 35% coupon that we brought it back up to retail, full MSRP after that, and what you can see is between on the left side of the graph, right, February, March, here was their ranking, we ran the promotion, and then you can see that it stayed the ranking stayed low, which is great to see. Right. So we started at a high higher ranking, we ran a promotion. Obviously price went right back up after the next couple of days. But we saw some tail end some flywheel effect impact ranking going forward. So that helped with sales. And then before at the end of June, going into July, we ran a best deal. It was very specific short term. And what we've seen overall comparing q2 2021 to q2 2020 is a 44% decrease in ranking, which is great. And then an increase of 60% in sales. And And just a quick asterisk here, I will tell you, yeah, maybe it's not apples to apples, because we're comparing 2021 to COVID 2020. Well, I will tell you that they were already 8% of 2019 to 2020. So we felt pretty good that this was not just COVID math giving us this boost, but it was due to being very strategic in some of these deals, but still making sure that they're not so long term that they they impact the pricing integrity of the brand.

The other thing that we're testing right now is playing with discontinued items, and leveraging that pricing to drive traffic to the products that are Halo product listings and still have products at full price. So coming back to our fun brand of toe socks, they've released products about twice a year, when they do that the previous season is discontinued. And typically in the past, we just kind of dropped the price, we don't tell the brands that they're getting a deal, they just see that pricing. And this time, what we're going to try is when we discount, in the first two weeks, we're going to add a coupon so we'll keep it at retail, we'll add a coupon of the 20% discount, and then after two weeks, then shift the MSRP on the seller side to drop it and there's no longer a coupon. So we think that that coupon incentive is going to trigger the rankings, right, trigger some, some customers to maybe again purchase a product that has a lot of cheaper alternatives, but don't have the quality. And then one other thing that I would say that we're doing a pretty good job of is in sponsored product ads on the branded side or, or I'm sorry, on the non branded side, we're using the cheaper discontinued products to show price. So in the image to the right here you can see this style is discontinued with that 1120. On the right, you can see the full parent offering that has that 1120 discontinued style as well as the full price products right. And we're using the sponsor product ad to bid on the child that is discontinued to drive traffic so that when they start search for yoga socks, for example, they see a cheaper price and then if they want to buy that one great, if not, they also have the other products that are full price. So that's other ways to kind of get around this pricing and be strategic in the way that you're running promotions. So in summary, a couple of things, one, watch out for new Amazon advertising releases releases, they are how they are happening all the time, like almost daily to think full strategy first, then adspend. Three, prioritize your content optimizations for determine your advertising target before setting a budget. So again, really, really clear on this one, if the goal is to acquire new customers, if it's to do market share, you're going to have to spend more, you're going to have to increase that tacos. And you're going to see the payoff a little bit later than just doing branded or bottom of funnel conversion campaigns. And then lastly, test promotions and measure ranking lift, but balance it with, obviously, your math and your MSRP and protecting your other retailers. There's ways to be creative, but make sure you're upfront with that you're planning ahead, right? Your your 633 to six months in advance, hey, these are the specific windows that we're going to be doing promotions on these very specific products. Oh, I can't believe it. Aaron 225, I thought we were gonna go over. So I'll hand it back to you for any other questions.

Aaron Conant 51:06

No, literally, literally perfect. If we're going to time it because we've got, you know, two minutes before we wrap it up here. No, so-called people asking, Can we get a copy of the deck? Is there any issue if we connect with them? And you shoot it out? to them?

Nicole Reich 51:20

Yep, absolutely. So we'll send that out in our follow up for sure.

Aaron Conant 51:23

Awesome. Yeah, when people need a, you know, a recording of it, ping Patrick, the BWG Connect, and we can get you a copy of the recording as well. You know, are there any? Any thoughts really quick? Just, uh, no, across the board in stock rates? You know, any thoughts there? You know, back up, you know, either, you know, are you recommending like a digital age like three PL or something like that to do the drop shipping during the holiday season just said to some few people asked on, Hey, what about going out of stock? What is in stock risk mitigation look like?

Nicole Reich 51:57

Oh, awesome. Okay. So on the one piece that I guess is what I will say is that, um, backups. For what's about to happen in q4 with potential stockouts, it's a great reason to have a hybrid strategy, right, where you're working with Amazon, one p, maybe you don't have the ability to do drop ship with them. So you leverage other third-party sellers to have a fulfillment by merchant offering that works really well. On the three piece side, you know, as much as it's great to have very small sellers, it also puts you at risk if you're putting all of your eggs in one basket to make sure that that seller has stopped, right. So what happens when they go out of stock? What I would say on our end, what we're doing is always making sure that we have an FBA right prime offering, if it if it goes out of stock, we have a fulfillment by merchant offering, which is fulfilling inventory out of our warehouse. And then in the backup that even we go out of stock, there's a dropship option that Amazon places an order for sorry, the customer places an order, and then we drop ship it from the vendor. So that's the way that we are prepping for q4 as it relates to inventory selection.

Aaron Conant 53:04

Yeah. Awesome. No, absolutely love it. And that's, you know, just really, here we go for one more question. And then we're gonna wrap this up. Some are recommending price increases during the holidays, Black Friday due to auto stock fears, thoughts on this strategy. Oh, interesting. raising the price to slow sales.

Nicole Reich 53:25

Yeah, so or decreasing adspend, right, because you don't want to drive, maybe we don't need to drive traffic to a listing that we know is going to go out of stock two weeks after Black Friday, right? So there's a there's a balance there, I want to say test and measure, right? Because we don't want you to get in a scenario where you're like the Cheetos example, right, where you increase the price so much that all of a sudden you lose organic rank, and you have to then pay more on the back end to get back up in placement. I will say that we are in those scenarios when we know we were in a stock out, we're definitely slowing down adspend to an extent I'm not saying turn it off, but we're making our bids a little less aggressive. And then maybe we're not running coupons. We're not doing yet well we where we actually increase the retail price from where it is yet. Mostly because most of our brands are mat protected. And as soon as you increase the price you lose by box. So I haven't seen anyone do that. But I have seen people cut back on promotions or advertising when they know they're gonna go out of stock.

Aaron Conant 54:29

Awesome. Love it. I think with that, we're going to go ahead and wrap it up here. You know, thanks. Both of you, Nicole and Mike, so much for your for your time today. Thanks for the expertise. anybody needs follow connections, you need any help in this space whatsoever. Both of them come highly recommended from in the network across the board more than happy to connect you with them and said it so you can set up some time to connect with that. Also look for an email from us at BWG Connect. You know, we're a giant networking group. The way we get the topics from these calls are just one on one conversation. Would love to set up some time with anybody on the phone today and obviously more than happy to kind of give you a rundown, you know, a strategic overview of how the landscape is changing in the newest players that are popping up in the space. You know, thanks again, Mike. Thanks getting Nicole . hope everybody has a fantastic Monday. Have a great rest of the week. Everybody take care, stay safe and afford to have you at a future event. Alright, thanks again, everybody.

Read More
Read Less

What is BWG Connect?

BWG Connect provides executive strategy & networking sessions that help brands from any industry with their overall business planning and execution. BWG has built an exclusive network of 125,000+ senior professionals and hosts over 2,000 virtual and in-person networking events on an annual basis.
envelopeusercartphone-handsetcrossmenu linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram