In 2022, Amazon’s ad sales increased 19% YOY, even while Meta and Alphabet suffered setbacks in their digital advertising business. And there’s plenty of room for growth: Advertising accounts for just a fraction of the e-commerce giant’s annual revenue, and Amazon only holds 7.3% of the overall online ad market.
What does that mean for brands like Miko? Amazon will only become more critical to digital ad strategies in the months and years to come.
However, advertising on Amazon doesn’t come without limitations. The Amazon Ad Platform doesn’t allow advertisers to leverage dayparting — a tactic that targets different audiences at different times of the day based on geography, age, and other factors. It also lacks functionality for automating bids, which can quickly impact a campaign’s customer acquisition cost (CAC). To ensure we optimize our Amazon advertising campaigns, Miko built an in-house marketing engine that layers over the e-commerce giant’s ad platform. This innovative tool helps Miko optimize our Amazon advertising CAC, giving us a competitive edge in the ever-evolving online advertising landscape.
The value of our in-house marketing engine
Instead of using the Amazon Ad Platform as-is, Miko leverages first-party data to retarget audiences both on and off Amazon. Our in-house marketing tool layers on top of Amazon’s platform to give us capabilities beyond what’s possible with Amazon alone. We can automate bids and keywords, and enable dayparting and much more -
- Keyword research: Our in-house marketing engine uses advanced algorithms to perform comprehensive keyword research, identifying high-volume, low-competition keywords that are relevant to our products and target audience. This process involves analyzing various data sources, such as search volume, CPC, and relevance score, to determine the most effective keywords for our Amazon PPC campaigns. By targeting these keywords, we can potentially reduce our CPC and CAC, as we are more likely to reach users who are interested in our products and are more likely to convert.
- Campaign optimization: We utilize a variety of campaign optimization features to improve the performance and ROI of our Amazon ads. This includes precise ad targeting, where we can set parameters such as location, age, and interests to ensure that our ads are shown to the most relevant audience. We also use bidding strategies that automatically adjust our bids based on factors such as competition and conversion rates, helping us to maximize our ad spend. In addition, we use negative keyword strategies to exclude irrelevant search terms that can waste our budget and decrease the effectiveness of our campaigns.
- Product research and listing optimization: Our in-house marketing engine includes a product research and listing optimization tool that helps us identify the most profitable and least competitive products to advertise on Amazon. This tool utilizes various data sources, such as Amazon Best Sellers Rank, customer reviews, and pricing trends, to identify products that have high-profit margins and low competition. We also use listing optimization techniques, such as keyword-rich titles and descriptions, to ensure that our products are easily discoverable by Amazon shoppers.
- Competitor research: We utilize competitor research tools to analyze the advertising strategies and tactics of our competitors on Amazon. This includes analyzing their keyword targeting, ad copy, and pricing strategies to identify areas where we can optimize our own campaigns and potentially reduce our CPC and CAC. By staying ahead of our competitors, we can ensure that our Amazon advertising campaigns are effective and efficient and that we are reaching our target audience in the most cost-effective way possible.
By using a combination of these In-house tools for keyword research, campaign optimization, product research, and competitor research, we were able to identify and capitalize on opportunities to reduce our CAC by up to 80%, while maintaining and increasing the sales and profitability.
Advertising is now Amazon’s fastest-growing sector, surpassing subscription services like Amazon Prime Video in annual revenue. With more than 300 million active customers, Amazon ads can help brands reach a global audience ready to click “Buy Now.” But for brands serious about optimizing their CAC, the company’s built-in platform isn’t enough. We’re setting a new benchmark for Amazon ad campaign optimization, and it’s only possible through our innovative in-house tool.