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Amazon’s advertising push causes sellers to pull back their ad spending

With Prime Day 2024 around the corner, sellers all over the country (and the globe) are kicking the high gears on their marketing efforts. But before you start your planned tactics, we think you need to know ALL sides of paid promotions.

So, we gathered some resources to help you decide what type of ad campaigns to launch and how to optimize them.

BLACK MARKET

Something has been bugging a lot of us lately—Amazon’s growing appetite for advertising dollars. One seller vented on Amazon Seller Central about a baffling ad experience.

🪔 A tale of three displays

  • Their decent-selling product was showing up twice on the same page: once as a sponsored listing and once as a regular listing.
  • While they’re questioning the need for a sponsored ad beside the actual product, they then saw the same product displayed THRICE on the same page! Two are side-by-side sponsored ads, and one is a regular listing just a row below. 🤦

When this seller began their ad campaigns in 2016, their ACoS was a sweet 8%. But by early 2023, it has climbed to almost 40%—threatening to eat into their profit.

What did the seller do?

  • They tweaked campaigns, used software, and made manual adjustments, but the improvements were minimal.
  • Fed up, they slashed a huge chunk of their ad budget and dropped products that couldn’t sell without ads (except new launches). Their cash flow saw a massive boost, giving them much-needed breathing room.

💰 Amazon is raking in tens of billions annually from advertising fees. But with selling costs rising and sales remaining flat, many are cutting back on ads.

Some sellers in the thread agree that if Amazon keeps milking sellers without considering the strain, they risk losing advertisers. As the saying goes, a sick cow won’t produce milk forever. 🐄

TOGETHER WITH SELLER INTERACTIVE

The Amazon sidekick you didn’t know you need

If there's one common denominator among successful sellers, it's how much they rave about the ✨magic ✨ of PPC advertising. Understandably so, it's definitely your best friend in boosting your product's visibility and growing your business—when done right.

🛑 But like any other tool, PPC advertising has its challenges, such as:

  • Intense competition: With countless sellers in Amazon's vast marketplace, standing out is a big challenge.
  • Complex campaign management: Navigating costly and ever-changing campaign intricacies can overwhelm new and experienced sellers.
  • Demanding keyword research and targeting: High traffic is the holy grail in Amazon selling.

And for many sellers, the combination of these challenges and the need to juggle day-to-day operations can drain and stretch their resources—and patience—thin. 

🏆 Good thing there are experts

Like Seller Interactive! Their PPC Management Services are everything you're looking for in a trustworthy partner. They offer solutions for:

  • Sponsored Products, making sure your ads are visible by placing them in search results and detail pages for maximum exposure;
  • Sponsored Brands, highlighting your brand logo and custom headline on customers' search results;
  • Product photography, providing eye-catching, policy-compliant product images; and
  • Keyword research, finding relevant keywords to target the right customers and leveraging negative keywords to optimize your ad budget.

👌 From stressful to stress-free

It's the promise Seller Interactive makes through its comprehensive PPC advertising services. Let them do the heavy lifting so you can focus on other aspects that will make your business the talk of the ecommerce town.

Schedule my FREE consultation

BITES OF THE WEEK

HOT TOPIC

Paid promotions don’t guarantee sales—what does?

Sponsored product listings have long been held in high regard. But according to Phys.org, consumers often gravitate toward organic listings and aren't easily swayed by flashy labels like "sponsored" or "ad."

A research led by a UC Riverside professor sheds light on the reasons behind this.

🟢 The organic advantage

Most sellers shell out for sponsored spots. But in reality, when an organic listing gets bumped down by a sponsored one, consumers aren't as keen on clicking because they still view organic listings as more trustworthy. 💯

Despite the skepticism surrounding sponsored listings, there are scenarios where they shine.

  • For niche products or those buried deep in search results, sponsorships can boost visibility.
  • Fashion items may not raise eyebrows when labeled as sponsored.
  • However, products with long-term implications, such as electronics, are scrutinized more closely.

All in all, shoppers want reliability—and that often means sticking to trusted organic listings.

🤔 So, should you still invest in ads?

Sellers walk a tightrope between maximizing visibility and maintaining consumer trust. But why compromise when you can achieve both?

It's a matter of balance between promoting products and staying genuine in the constantly changing online shopping world.

SELLER REFRESHER

Is paid promotion still worth your time and money?

Let's face it—paid promotions get a lot of flak. But when executed effectively, they can significantly enhance your brand's visibility.

Amazon Ads demonstrated this with Bloom Nutrition, which experienced remarkable success.

An advertising success story

After participating in the Advertiser Accelerator Program,Bloom Nutrition achieved:

  • 285% increase in ad-attributed impressions;
  • 89% lift in ad-attributed sales;
  • 80% orders from new-to-brand customers; and
  • 250% Return on Ad Spend (ROAS).

How to replicate their success

Here are some tips to get you started and keep your campaigns running smoothly:

◀️ Before going live

  • Group similar products and strategies together to save time.
  • Only advertise in-stock products.
  • Run your campaign with no end date to maintain momentum.
  • Optimize your product page with clear titles, high-quality images, and at least 3 bullet points.

▶️ After going live

  • Turn on automatic targeting with dynamic bids (down only).
  • Filter out irrelevant searches by using negative keywords.
  • Monitor your campaign performance and adjust bids as necessary.
  • Ensure you're not overspending by reviewing and tweaking daily budgets.

💭 Is it worth the penny?

If it's delivering the results you want, then ads are definitely a good tool to explore.

Despite the negative buzz, Bloom Nutrition’s story proved they can be a game-changer if managed effectively. All you need is a strategic setup and continuous optimization to realize that paid promotions aren't that bad after all.

Author : SellerBites
Faith began working on SellerBites in 2021, a weekly newsletter that provides sellers with the latest news and updates in FBA. With first-hand experience in managing various seller and vendor accounts, she understands what sellers face on this platform. Her background led to the conception of SellerBites, which main goal is to help people become better, more informed entrepreneurs in the Amazon marketplace.
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