Ep. #980 - How Advertising on Amazon Works
In today’s episode of Startup Hustle, we’re revealing how advertising on Amazon works. Andrew Morgans is here with Elizabeth Greene, co-founder of Junglr, to dissect every trick in the book. The e-commerce pros discuss how to do ads, SEO, and other effective strategies to help your e-commerce business grow.
Covered In This Episode
In the world of e-commerce, it’s all about the ads. So if you want to increase your ROI, jot down notes as Andrew and Elizabeth talk about advertising on Amazon.
They go over the best way to use the data you can get from Amazon ads. The discussion points also include the best SEO and Amazon ads strategies for better visibility.
Get more customers now. How? Listen to this Startup Hustle episode today!
- Elizabeth’s backstory (02:04)
- Finding work-life balance (05:36)
- How to get the right advice in the community (08:33)
- Advertising to move products out to market (09:38)
- Advertising—then and now (10:20)
- Important data you get from Amazon ads (13:04)
- Using ads to gain product visibility (18:22)
- How Amazon influences organic rank (19:12)
- Roles of organic teams and paid media teams (22:25)
- All about ads and SEO (23:41)
- The big picture ad strategy (29:44)
- How to acquire new customers without using main keywords (32:41)
- What is an Amazon Choice Badge? (37:15)
- Testing your ad strategies (39:41)
- One tip for Amazon sellers (41:56)
- What is Junglr up to next? (42:35)
We all kind of started in that way; people just asking for help and being like, let me help. And now, it’s turned into an entire industry where you happen to market yourself, and there are competitors. But, in the beginning, it was like, you know, Upwork. It was Facebook groups. It was meetups.– Andrew Morgans
ROI still has a place in any advertising analysis. But definitely, in the Amazon advertising ecosystem, there are more things you should factor into the ROI. It is probably a better way to put it. Because, definitely, if we’re talking Facebook ads, if we are talking Google ads again, those are completely divorced from any other rankings or visibility. You’re simply paying for that visibility.– Elizabeth Greene
One thing that I’ve found a lot of time is more on competitive categories. Yes, the top keywords are bananas sometimes with the cost per clicks that are needed. But oftentimes, because there’s so much search volume in the space, there’s often a wide variety of additional keywords that still have a decent search volume.– Elizabeth Greene
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Following is an auto-generated text transcript of this episode. Apologies for any errors!
Andrew Morgans 00:01
What’s up, Hustlers? Welcome back. This is Andrew Morgans, here as today’s host of Startup Hustle covering all things e-commerce, Amazon, and startups. You name it, we’re going to be covering it all. I’m also the founder of Marknology and am here to talk to you about how Amazon advertising works. Before I introduce today’s guest, I want to give a shout-out to our sponsor. Today’s episode of Startup Hustle is powered by FullScale.io. Hiring software developers is difficult. Full Scale can help you build a software team quickly and affordably. And has a platform to help you manage that team easily. Visit FullScale.io to learn more. And today’s guest is a friend, a colleague. We’re a couple of masterminds together, a thought leader in regard to advertising on Amazon. Elizabeth Greene, welcome to the show.
Elizabeth Greene 00:44
Thanks so much for having me on. I am absolutely thrilled to be here.
Andrew Morgans 00:48
Thank you for coming back. This is actually our second recording, our second take. Our first round of audio didn’t take. And so, while we had a great time chatting, it was just for us. So we wanted to give you guys some value like we did the first time. Elizabeth, I would love to just get into your backstory a little bit and understand how you found Amazon advertising and how you found entrepreneurship. You’re in Florida. Correct me if I’m wrong. And my family lived there a little bit as well. So some stomping grounds. But tell me where your story begins.
Elizabeth Greene 01:24
Yeah, definitely. So it’s kind of interesting. I love how everybody has their own path in the Amazon space or a lot of different spaces in general. My background was not in corporate. It’s not really business-building. Before, I was doing this full-time. I was actually at home full-time. So for those of you who don’t know me, I have several kids. When I say several, I mean six. And so that kept me busy enough. We are also homeschooled, which is awesome. So homeschooling, I absolutely love having the family unit together. And that’s really, and still is, honestly, my main driver for what I’m doing right now. That is what I was always looking for. And as a family, we were looking for a way for the family unit to be even closer. I grew up in a very close-knit family. My dad worked outside the home. But again, I was homeschooled. I love that, like a really tight-knit community. I have several siblings, and we’re all super close. And I attribute a lot of that to us just being around each other all the time growing up. So always looking to foster that. But, of course, like my husband’s part of the family, too, a major part of the family. So finding some way where we could all be interactive with him was kind of like, again, it’s still the main driver. So ended up in this world and then, specifically, in Amazon advertising. Running that helps sellers manage it. And so that’s where I ended up, and you know, I can give more backstory on the in-between.
Andrew Morgans 02:57
Yeah, I think if I remember correctly, we talked about, like, you know, it started out a little bit with retail arbitrage or reselling. And then it just kind of evolved from there. Was it retail arbitrage that you started with? Or was it like print-on-demand? Can you remind me?
Elizabeth Greene 03:14
Yeah, I like the backstory. My husband and his family are very entrepreneurial like always have been and always will be, I’m sure. So my father-in-law is like a general contractor. They’ve done car lots, they’ve done shield sheds, they, of course, you know, build. I think that his parents ran a pet store at one point like, I mean, all of the above like they’ve done they’ve tried, you know, the kind of people that will write a business plan on a napkin and go do it. Yeah, that is very much that spirit. So I did not grow up in an entrepreneurial background, although I did grow up in a family background where it was very much if you put your mind to it, you can do it. Anything can be large. So I did have that going for me. But I’d always been with my husband in more of a support role. So as he was going outside of the house, still working in the family business, but still having to like go, Do you know, typical, it has to be nine to five, like, if you’re on job sites, you have to go out and do something on the job site, you can do it from the house. So I was always looking for something like, what’s the thing that can let us do it from home. So there are things like Etsy print on demand and goodness, you know, like print on demand t-shirts, just something that allows you to provide at that point, it was more of an I was a product and just looking so along those lines, any of those you can succeed. However, my thought at the time was very much to let me try this. But any of those things, even what I’ve done, even where we are now, it’s taken me years to build up what I have now. So anything needs to have time and effort I put in over a longer period of time. I think I burned out a little bit too quickly on most of those. Yeah, long the way I found, or we found when I say I, like my husband, was still doing him, you know, typical nine to five, so I would be the one. Okay, so there’s this thing called retail arbitrage cool. Let me drag all the kids. I think at that point, I had to scan all the things to figure out if you could sell it. So I sold a couple of things. And it was like, Well, this is a lot of anything’s effort. That was a lot of effort, especially with the get Yeah, so it was like, Alright, you know, there’s online arbitrage that maybe you find something online, and that’s, oh, wait, there’s this private label thing. You know you don’t have to continuously source products. Yes, it’s a whole nother. It’s still the same ecosystem but with different challenges. It’s different challenges. So it was like, you know, let’s try this. And then along the way, I had twins, so that was like four, somewhere along the line, I had twins. And that pregnancy was a bit much. So that kind of wound down again. We were like, hey, let’s try this phase. It wasn’t like, hey, let’s put in the effort, do or die type mentality. So it was very easy to wind down. But along the way, I got into the Amazon ecosystem and found out that, like, Hey, there’s this thing called advertising. And so when I really started getting into the advertising piece, the thought or the mindset for a lot of like private label Sellers was still, is this something that I need to do? Like advertising is a very, like a cemented piece of the business when it comes to like, you know, your typical business, like they know that they need advertising. But yeah, people are super scrappy and coming into it. It’s like, Hey, do I really need to spend on this? Can I just, you know, because you’re already spending on things like product sourcing and listing images, there are so many things that drain resources. Amazon or advertising just seems like one extra piece of that. And they’re like, can I just not? So the mentality was like, do I need to run this if I need to? How, and that mentality right now has definitely shifted to, okay, this is a necessity. How do I do it? But as people started asking those questions and really trying to figure it out for themselves, I found that I could come in with a lot of the answers. So there are a lot of people asking questions as well. I have the answer for that shirt. Cool. Let me just give you the answer. And that kind of, you know, led me to some sellers who started managing ads for them. And it’s just grown from there.
Andrew Morgans 07:36
Yeah, the community. I think, like anyone that’s been doing this for a while. We all kind of started doing that way. That was like people just asking for help. And being like, let me help. Let me help. Let me help. And now it’s turned into an entire industry where, you know, you have to market yourself and like, you know, there’s a whole there are competitors and like, but at the beginning, it was like, you know, it’s Upwork, it was Facebook groups. It was, you know, the meetups. I’m in Kansas City. And while we have like a good startup culture here, and like, you know, we will first get fiber, and it’s a booming city, probably about 2 million, there’s still, like, not really a lot going on for E-commerce or Amazon as far as like meetups or like a community or anything like that. So for me, even here in the Midwest, Florida actually has a lot more going on, depending on where you are. But for me here in the Midwest, almost everything has been virtual, you know, virtual meetups or virtual conferences or masterminds like we’re a part of. And that’s what’s like, that’s what’s been kind of cool about the industry in general, as the grassroots part of it. And like, kind of really how it really started out as a community of people helping other people. Which I think is pretty cool. As far as industries go. On the advertising side, like, when did you first start dabbling with advertising? Was it wholesale? Was it a private label? Was it like that? Yeah, products, the move is when you started advertising.
Elizabeth Greene 09:02
Yeah, so mostly the private label. Because a lot of times, like with retail arbitrage or with Wholesale, the margin seems to be a little bit smaller. So there’s less wiggle room for advertising. But then also, depending on if it’s like something that you’re replenishing a lot. And again, we were just really getting into it. So it’s not like we had. Okay, so these are my tried and true products. And I know movement. I’m constantly replenishing when you’re dealing with a lot of one-offs. A lot of times, the cost to run advertising just doesn’t make sense. You kind of pay the already, like the demand that’s already there for that particular product is what you’re working with.
Andrew Morgans 09:40
Yeah, I want to talk to people a little bit about how ads really work. And, you know, I’ve been in space for 11 years. I’ve seen, you know, the ads become available, like in 2015. And it was completely different. Now. There are all different types of products and advertising products that we can use. Now that wasn’t a very Double then. And you know, there’s an aspect of it that’s like Amazon’s data is hidden from the sellers. For the most part, there’s data. There are all kinds of data, don’t get me wrong, but in comparison to a website, everyone knows that Amazon keeps the data pretty close to the chest. Well, with advertising, it’s kind of one of the main ways that you get data in general on this platform, whether it’s like, you know, keyword data, or customer purchase behavior, or any of those kinds of things. And at the beginning, it was just like, let me get visibility to my products. And it was, like, just trying to get people to even understand that Amazon now had an advertising platform. Now, it’s so much more sophisticated in regards to, like, your organic ranking. Doing well on Amazon are the keywords in your listing and the copy, and the images that convert. And so there’s this strategy, a lot of times of like, well, depending on who you’re working with, do we need top of the funnel, which is like people know about my brand? Is it like, do I need to advertise directly on the keywords that matter that I should be showing up for? Do I need to defend my real estate life on Amazon, meaning don’t let someone else show up on my product page? You know, and I think a lot of people don’t understand that it’s a live auction, as well. And what I mean by that is, you’re saying, I’ll pay $1 to show up, someone else can say I’ll pay $1, or five. And if they do, they’re going to show up instead of you. And so there’s this constant need to manage and, and change things around. You know, I’ve always struggled like being in this in the beginning, before people started coming on board with, like, really pushing their brands on Amazon, communicating exactly, you know, how it works, and why it’s needed. I think that’s why there’s such a need for advertising partners, to be there to help people navigate this, but it’s an absolute must like, you know, I had a, I had a meeting right before this podcast with a couple of my advertising guy, My Account Manager, my advertising guy came in, they’re like, Hey, we have a call at this client coming up this afternoon. And we’re putting together an ad plan for him. Because the CPC cost is around $13 for the keywords we want. And so we’re having to get really creative with the way that we’re going to grow the brand. And there’s just like, there’s a deep understanding that you need to have in order to really like to navigate Amazon’s ads. But like, as things change, like, let’s talk about just like, you know, I don’t want to get into the details of like ABS structure, or like, you know, kind of how some of that works. But in the grand scheme of things, specifically data and driving traffic, let’s talk about some of those things like, what’s some of the let’s just get into a specific question, like, what’s some of the data that you think is important that we can get from ads?
Elizabeth Greene 12:44
That’s a really good question. And I loved your point about comparing it to a website, like your own website, you know, like if you have your own website running, you can take a look at your go to Google Analytics, like, Hey, where are what searches are people finding my product from? How is this working? Now, the same with Amazon has definitely been access to more data. So I am definitely loving it. There’s like new dashboards coming out that everyone’s geeking out about, like, it’s amazing. So we do still have like a little bit more insights, but still not the level of insights that you can get through the advertising. So the one main thing I think, to keep in mind when it comes to Amazon advertising, for the most part, is the fact that it is definitely search based. So there’s a lot of other platforms, if you’re looking at audiences, that’s a whole nother ball game. But on Amazon, people are going in to find products. And the benefit of Amazon advertising. And the kind of data you can get back is you can take a look. I mean, there’s other external tools or you know, at some point, you can even start looking into your own data. Where are shoppers looking for products like mine? Where does my product fit into the ecosystem? Where do I know that I can snag the eyeballs that I’m looking to convert? So you run that analysis and then you run those ads and you say, okay, so I know that my segment of shoppers you know, I’m selling a metal water bottle that’s pink, I’m going to look for shoppers that are looking for pink bottle water bottles, these are my shoppers, this is what they are searching for. I know they’re looking for my products. And what you can do is you can look at the data after you start running those ads and say hey, I’m getting in front of shoppers you know if you want to compare it to a shopper funnel, personal opinion, I don’t think it fits as neatly as we would like it to you know, the whole like.
Andrew Morgans 14:37
Elizabeth Greene 14:39
Yeah, and you know, purchase phase shoppers still go through that funnel. It’s a bit hard to direct it again, again, because it’s search based, but you can still say Okay, how many people are finding my products like impressions, okay, like, how many impressions Am I getting? What’s the search? Okay, so now that they go to search, okay, no clicks, people are interested in my product. Where’s the disconnect? Are they liking or they’re not clicking, and then purchase from that, what’s my conversion rate on this. And you can run that, you know, again, you’re still looking ultimately to make a purchase. And ideally, you want to make some profits on those purchases. But you can also use it as sort of a feedback loop to say, Hey, I know my shoppers, segmentation is here, if I’m advertising a pink metal water bottle, and shoppers are looking for a pink metal water bottle, but they are not purchasing mine, what’s wrong, and that allows you to get very specific feedback on your specific product, versus just throwing it up on Amazon. And maybe I can run someone else’s ad where I’m showing up, but I’m not really sure I get my overall conversion rate. And that’s great. But I would really like to see how I convert on very specific segments of the market. And that’s definitely some feedback that you can gain through advertising that you cannot get that specific at this point.
Andrew Morgans 15:59
Yeah, I think like, in comparison, what I feel like what I can get on Amazon versus even what I can get on the website, sometimes it’s just so much more granular on Amazon, like I know exactly, that bar accessories are or bartending kit or at home bartending que like the difference in all three and how they all convert and what I should be focused on. And you can go out there and read other people’s data, okay, you can go out there and say you can use these third party tools and say merchant words, or helium 10, or whatever, and say, I know that pink water bottle gets 15,000 searches a month. Well, that doesn’t tell you how that traffic does to your listing, that doesn’t say how much of those 15,000 You’re getting, that doesn’t, you know, in that 15 1000s of scrapes a mile anyway, right. So it’s not exactly accurate, down to the down to the number. So how that interacts with your products is completely different than what you’re getting when you’re just looking at raw data. And, you know, for me, at least, like just speaking to the data, because so many people focus on cost and tacos and all that kind of stuff. And I’m like, it’s really the data, that’s the absolute goldmine if you’re thinking holistically with E-commerce, because now you’ve got specific keywords that you know, are converting, and they’re amazing on Amazon, well, if you had a holistic strategy, and you’re then going and writing blog articles, or you’re putting that in your graphics, you’re putting that on your Instagram ad, or you’re putting that because while they might be on Instagram, you know that a majority of customers are searching pink water bottle. And so then you’re like, Well, I’m just gonna show the pink one, and I’m gonna say the pink water bottle and why they might be searching it on Instagram, they’re gonna see it and resonate with that. So that data becomes invaluable. And I think that most of the times, at least like with us, whenever we come across a product, you know, you might put in 10 keywords and you do your research, you launch a product, you put 10 keywords in there you think are amazing, you put it up, and you’re like, Okay, let’s see how it does. And that’s like one, a lot of people just assume that the keywords they chose are the right ones. Well, that’s not the case, you need to use the advertising to validate those 10. And then like, you know, getting those seen faster is where advertising comes in. So it’s not just validation. It’s also like the visibility. And all these things have to do without even getting a sale, but you’re learning them. That’s what I mean, really, when I say data is like all this information you’re getting that happens, even without the benefit of getting a sale and a customer. And a lot of times when we find a product, it’s not working, it’s simply getting a lot of spend on keywords that aren’t converting that tells me what’s wrong with it. So these are the symptoms, and let’s go backwards from there.
Elizabeth Greene 18:37
Yeah, and I would say also, I think it also bears in mind pointing out the other unique ability of Amazon advertising is the fact that it does, in fact, influence your organic rank. So basically, where you’re where you are showing up on a search page, regardless of having to pay for it. And it’s unique to the Amazon platform. From my knowledge, there is no other at least large advertising platform out there that helps directly influence where you’re going to show up in organic ranking. From my understanding back in the day, Google used to do that, and then quickly decided that they did not want to have a pay to play on the ranking, because they wanted to have they just wanted to have better like search intent for people, they didn’t want someone to be able to just push their way to the top. So there are things around that. For instance, if I have a pink water bottle, I doubt I’m going to be able to be ranked like a dog toy. There are algorithms out there that like it’s not going to favor you for things like that. But the way it works in the very core of it is one of the main things that helps you rank is like sales velocity. So Amazon’s assuming, hey, if somebody’s searching and purchasing this product the most from this particular search, we’re going to assume that adds what that particular shopper wants. There are other things that go into it at the core, that’s a really big chunk. So what the advertising does is if we can get in front of those shoppers, again, you’re paying to get there. And they click and then purchase through your ad. Even though it’s an ad, Amazon’s still saying, hey, even though they paid to show up here, they still convert it. So we are still assuming at some level that this is still highly relevant. And shoppers are resonating with this product, even though it’s their advertising. And that kind of adds to the overall pie. Now, the big players are definitely converting well, and they’re organic, as well as their ads. So again, it’s like the whole thing together should work in synergy to help push you up in the rankings. But you definitely, yeah, some people are bemoaning the fact it’s become a little pay to play, I would somewhat agree with that. But I would say you still have to convert the shopper. Like you can’t spend exorbitant amounts on the advertising and not convert and see any benefit of it. So while it’s pay to play, you still actually got to give the shoppers what they want, which is what Amazon’s interested in, they don’t want a bunch of crap at the top of the search, they definitely want things shoppers resonate with. And so that’s one way that they’ve gone about that, which again, is very unique to Amazon advertising.
Andrew Morgans 21:15
Yeah, the product still has bad reviews. It’s like jumping the line, you’re just paying to skip the line, you know, at the bar or the club. And you’re like, that’s what ads are doing. But you’re still going into the same place. And, you know, these conversations are actually really, really difficult with the larger brands. And if they’re not native to Amazon, or they haven’t been in Amazon a while with a, you know, dedicated team, like I’m working with a Fortune 500 company, one of the biggest, like food companies in the world. And they, you know, they have very specific different teams with different roles internally, they have an organic team, they have a paid media team, they have like, you know, so these teams don’t necessarily work together, they have their own initiatives. And we’re literally trying to change the entire way they’ve done business because in other ecosystems outside of Amazon, it doesn’t work like that, where organic and paid are working together. Like if you launch a new product from scratch, in 2022, not like 2012 Like, you know, you launch a new product in 2022. You can have an amazing product, you can have great keywords that you chose from scratch, when you first start selling your organic, your percentage of sales that are organic are going to be next to nothing. It takes time, it takes absolute time. And so you’re going to be heavy on the ad side. Well, if you don’t have those keywords in the listing, you’re always going to say hi on the ad side, like it’s like it balances out over time. And I remember when, like the review giveaways, were really how you launch products on Amazon. And, you know, like, here’s a free product, leave us a review and the review. The algorithm basically prioritizes reviews over everything else, they fix that. And I remember in those times, like being so excited, just as like a little bit of a geek, being like, I believe that if I do exact match on these keywords, and I have these keywords in my listing, and I’m tracking my keyword rank, I can watch it move up. And you know, no one was really talking about that, no one was really pushing that because it was this mixture of ads and SEO that no one was really doing because it hadn’t existed before it truly was novel. And I just remember being like seeing it work before everyone was, you know, before everything got super complicated was a lot easier to see your results and like you know what you were doing to see the effects of them. And I remember just being so geeked out about it knowing that, like, guys, like I don’t need these giveaways, I don’t need super URLs, I don’t need Blackhat, I don’t need this, I don’t need that. If you guys do it the right way, like in this is the right way we can rank products on Amazon over and over and over again. And if they take away these hacks, I don’t really care. You know, if you have the budget, we can do it. So I know it’s a bit of a rant, but like, I know for a fact that it works. And so regardless of people saying that it does or doesn’t, you know if you’ve done it enough times and seen it. And because of that it’s like ads, the way the ads work on Amazon is not just to drive traffic and sales, but it’s to get data, all kinds of data that tells you so much about your brand, your company that you can’t get on Google or Walmart or anywhere else. And then and then the other one being that organic, your organic rank. So you want to have great organic ranking, you want to have to not pay as well as help you get there. And here’s how and here’s how you do it. And so you have an ad strategy that’s now like, Okay, I want people to know about my brand and I’m allocating a certain amount of budget to here, I have a certain amount I want to protect my brand and my listings, I have a certain amount that I want to just push my organic keywords I think are important and you start to get these like more complex strategies than just like on or off and a cos. And whenever I think of the perspective of like I’m getting this and I’m getting this and I’m getting this and I’m getting this seems so much more valuable than just like I’m spending what to get the sale? Yeah, you know, there’s a lot more to it.
Elizabeth Greene 25:06
Yeah. And I would 100% agree with that. I think it’s, again, it goes back to the ecosystem and understanding like, for instance, like Facebook, every marketplace, every ad platform has a way that you should view it. Yes, you definitely want to look at, you know, ROI. That makes total sense. I mean, realize it still has a place in any advertising analysis. But definitely on the Amazon advertising ecosystem, there’s more, I guess, there’s more things you should factor into the ROI is probably a better way to put it. Because definitely, if we’re talking Facebook ads, if we are talking Google ads, again, those are completely divorced from any other. You know, rankings or visibility, like you’re simply paying for that visibility, what’s my return on that visibility? Okay, these are my heart numbers, yes or no. And maybe you will, as a second farther, and you calculate the lifetime value of the customer. That’s probably how you should think of it as the lifetime value of a customer. Yes, it’s not per customer. But it’s par value of ranking on that search page, is probably a better way to look at it. So instead of just evaluating, oh, you know, maybe the ROI of my ads is slightly negative, if we’re just looking at it from an ad sale perspective. But when we factor in the fact that your total sales are growing, your organic rankings growing, we’re seeing the positive signals, and we actually can calculate that the account is positive on a whole, well, then if we’re losing out on, say, 30%, but we’re positive on the 100%. And in fact, you know, the total sales is greater than it would be had we not done these ads, well, then it probably makes more sense for us to continuously run them. So I think now, especially as things have gotten more competitive, you’re talking like $13 clicks. As any ad platform matures, you’re going to see increases and ad costs. It’s just the way it works. There are people moaning about Facebook ad costs increasing right now there are people moaning about Google Ad costs increasing right now, guarantee, you give it a little bit, people are going to be whining about Walmart ads increasing, it’s just it’s the name of the game, it’s the way it works. And so what you have to do is find a more sophisticated way to play the game. And to find a more sophisticated way to play the game, you need to have a more sophisticated and holistic look at your data set, be able to actually read the numbers and actually understand what is something that I’m willing to have a little bit less ROI on? Where do I need to see that, you know, positive ROI? Like it’s very easy. If you look at the total accountant, you say, Okay, so we’re negative net margins at this point. Here’s my runway and like ad dollars, I need to hit this by this, I think that’s a reasonable conversation. But if somebody is up positive month over month on their total sales and total margins, and then they’re looking at this one tiny piece of the business and saying this is, you know, we need to get positive here, it’s like, well, I can do that for you. But I can guarantee that all these other benefits and your ranking and your total sales numbers. And in fact, a lot of those cases in the conversations that we’re having is like I can pretty much guarantee you are we to make the changes you’re requesting, you will actually see decreases in your total sales numbers. And it doesn’t matter if you’re out 50, you know, like so you get 50% margins, 50% of a much lower number is actually going to result in much less dollars in your bank account. So hey, let’s do that math. And let’s figure out like, Hey, you’re actually sitting top 2025 on this keyword. Yes, we’re maintaining a heavy ad presence. But running those tests requires a heavy ad presence. And we can run the math and say this actually keeps you positive and growing your brand overall. So maybe it’s a bet that we should be taking right now.
Andrew Morgans 29:03
Very well said, I just wanted to let you ramble that out, because I think that’s a clip that we have to grab. You know, it’s that context. It’s that strategy is that big picture mindset of where do we go from here? I want to ask a little bit about what to do with those $13 cost per clicks. Like when you’re like, Okay, we have to like we need to get data we need to learn we need to grow sales. What are some of the strategies we can do either with sponsored products and our traditional product there and maybe even DSP? Before we jump into that specific question. Shout out to our sponsor FullScale.io. Finding expert software developers doesn’t have to be difficult, especially when you visit FullScale.io. We can build a software team quickly and affordably. Use the Full Scale platform to define your technical needs and then see what available developers, testers, and leaders are ready to join your team. Visit FullScale.io to learn more. Full Scale is amazing and we wouldn’t be able to do this show without our sponsors. If you’re real The Integers like cool websites and cool teams and hiring things like that try FullScale.io simply to be able to look at their team and how they’ve built out their site. It’s absolutely awesome. Alright, let’s talk a little bit of strategy here. Like in the next 10 minutes or so, you know, I have some ideas, but like when you’re up, depending on what product you’re selling, and what category you’re in rising CPC costs is is like subjective, like it doesn’t, not everyone is out of the game, some people are doing just fine, it hasn’t gone up that much a small percentage of that others are dealing with, like, let’s say, some manufacturers or some brands or some competitors in a space where they’re just like monsters. And you know, whether it’s supplements, whether it’s bicycles, whether it’s like, you know, TVs, yeah, you’re up against some players that have massive, massive ad budgets. And for them, they understand all their data, they understand their customer lifetime value, they understand, you know, what it takes to be number one. And so, in some cases like this one, you see ad costs going up to $13, for direct response, like, you know, keyword search. And that’s just not sustainable. If you’re a smaller brand, trying to get new customers trying to be profitable on the platform, you know, in this particular instance, I think the item we’re selling is like less than 30 bucks. So somewhere between 25 and 30, it’s like half your margin and a click. And if you don’t convert on that click, you know, it’s not going to work. So that alone is not a reasonable strategy. You have to think, Okay, do we do our Daypart? And like, Wait till these brands run out of budget? Are they kind of run out of budget? Like don’t know, do we go after a whole bunch of long-tail keywords that like, you know, maybe they’re not going after? And there’s some gaps? Okay, we can’t find any of those. Maybe there aren’t any available? Maybe it’s a specific product that doesn’t have a lot of like, alternative keywords? What are some other options? And I know, I mentioned DSP, but what are some other options? You know, how would you go about that kind of strategy of trying to acquire new customers? Without going directly out those main keywords?
Elizabeth Greene 32:01
Yeah. And that’s definitely a hard scenario. I don’t think there’s any way to die. So we’re, and I hear this from a lot of sellers. It’s like, How can I win in the market? Like, how can I play like, you’re telling me, I need to find a way to play the game? What’s my game? Like? What’s my play? And I think you really touched the nail on the head. And like big brands coming into the space, people are starting to realize the value of ranking in search. And so being willing to pay a little bit more, and a lot of times, they’re running at a loss. And that’s why they can pay those $13 clicks. Either, they have an entire product line that is positive. So they’re willing to take a sustained loss on maybe a new product, you know, just to be able to push it up in search. Or, you know, they just have a big backing. And so I actually have a video coming out of one of my comments, and it was like Amazon’s not just trying to take your money, I’m sure they’re more than happy with the extra ad dollars. Like, don’t get me wrong, I’m sure they’re absolutely thrilled about that line and their p&l going up year over year. But it’s really it’s your competitors recognizing the value of that search, and they’re recognizing the value of getting in front of that many eyeballs. So like you were saying, you just have to find out if that’s a space that you can plan can I afford to pay on this planet space, I see that a lot from like new sellers who are trying to build the belt, build it out on their own, they’ll take a look at that search and say, oh my gosh, if I ranked here, like, look how many sales I can get, because look how much the top dogs doing. And what they’re not factoring in is the time that it takes to get there, because the big dogs are there for a reason. And then how we talked about sustained sales volume on a particular search, they have demonstrated time and time again to Amazon that they can sustain massive sales volume on that. So you have to get in front of that and sustain higher sales volumes to be able to rank all, and if you’re paying for that, then you can imagine, you know, the more competitive is typically the longer it takes to kick out the big dogs. And if you gotta pay the whole way, it’s best to pick the backs where you actually can afford to pay for a long time. So yeah, I mean, your strategy of looking at other keywords in the space, I think it’s good. One thing that I’ve found is a lot of times on more competitive categories, yes, the top keywords are bananas, sometimes with the cost per clicks and are needed, but oftentimes because there’s so much search volume in the space, there’s often a wide variety of additional keywords that still have decent search volume went to talking decent at least in the couple 1000 search volume. And so what we like to do in space if there’s a search volume to do it and if we can, is look at niching down at where we fit better in the market. So for instance like a water bottle, I can guarantee you a water bottle or even metal water bottle is bananas, right? No, I’m sure it’s ridiculous to click a new person coming in like you don’t have a chance. Cool. Maybe I have a pink one, maybe I’m appealing to women. Okay, so what’s that segment of the market look like? Like, how expensive is that one? Maybe I have a rubber coating on mine. So I like rubber coating women. So you try and like, because that’s what you should be doing when you are bringing a product to market is like, Hey, what is the market looking for? What are people clamoring for? You know, how can I build a better mousetrap? How can I add this thing people are asking about this, people are asking about that. Okay, let me give the market what it wants is, oftentimes what new sellers on Amazon are trying to do. So if you can identify where those segments of the market are purchasing, then you can try targeting that. So that’s actually my, my favorite way to get into the market is like, you know, kind of almost like spearheading it. And oftentimes, like the amount of keywords you find, there might only be five, but I’m like, hey, if I can pay less to rank on five, and at least get sales, you know, off of those, you know, ideally, maybe even profitable sales, even though the ads. That’s my first play, oftentimes, other kind of like, hacky, I wouldn’t, I wouldn’t say it’s even hack. And with all these, it’s like tests, okay, so like run that, can I rank here, test it, like we were talking about data feedback, you know, we’re targeting our market is our market converting, and we sure hope they are. And you also can do product targeting. So I talked about Amazon advertising being very much search based, and it is, but there are other other places that you can show up on the platform and mainly the like on other people’s product pages, there’s like carousels at the bottom. Probably most of your listeners have shopped on Amazon. So you know how there’s like other products all over a page, like when you click on to look at something, a lot of those are ads. In fact, almost all of them I think are ads. So you can pay to get those spots. Sometimes those are useful if you can convert all the top competitor, we actually were able to get for those of your listeners who are like deep in the Amazon world, there’s the collagen Amazon choice badge, I believe it’s when you’re getting I forget the actual you probably know what all goes into that calculation of getting it but those are four or five things.
Andrew Morgans 37:15
Yeah, customer satisfaction with the product has to do with like, it’s obviously tonight connected to the Alexa, which is like what the choice by just so anyone doing voice search, like if you’re like pink water bottle, and you have Amazon’s choice for pink water bottle, like the Alexa is going to order that one for you. I think it’s going to be massive in the near future. I’m not sure of all the little things that you know.
Elizabeth Greene 37:43
Like when you’re shopping in that search, it gives you a nice little choice badge, which is great. It breeds confidence and shoppers in your product are actually able to get an Amazon choice badge through product targeting. So I know that there is some keyword association that happens when you are converting off of product pages. So that might be a good thing. Again, as with anything, you want to make sure that you’re actually converting on whatever you’re advertising on. Like that’s the name of the game. Not only because we want to make sales because those are, again, a big part of like the positive feedback that Amazon looks for when it comes to evaluating, like how you’re doing on a specific placement. So yes, we want to make those sales because we want the money, let’s be honest, but we also want to make those sales because it’s again, one of the positive things. So that’s where you’re constantly evaluating. It’s like Hey, okay, so I’m running these tests, where am I actually converting? What’s working for me? How can I double down on that? And then you know, if I’m proven it’s not converting either maybe I’ll do an analysis and say like, oh my goodness, why am I not converting? This is like this is where my shopper is, why are they not liking my product? Or you might say well actually turns out that’s not actually my shopper base. I thought they were but you know, I’ve gained data enough to know that they weren’t.
Andrew Morgans 39:01
No, that’s amazing. And I think you’re exactly right. It’s like it’s testing us. And this is where off-Amazon to-Amazon traffic can be so beneficial. This is where Amazon DSP, which is basically, you know, using Amazon data to advertise on competitors or off Amazon, there’s a whole bunch of plays there, retargeting. Your strategy might be a less direct response, more broad, you know, getting it cheaper to be broad and go top of the funnel and then, you know, just count on retargeting through sponsored display or DSP to kind of help you close that deal over time. And it’s a different strategy than perhaps what you’re doing whenever you’re like a pink water bottle. Instead, you start going, you know, hiking gear, which, let’s say it’s a lot cheaper, but then you’re like, you know, you’re pushing that messaging and then retargeting with them with the pink water bottle. By the time they see it a few more times. They’re like, Okay, this is great. So it just starts getting a lot more advanced and a lot more strategic, and yeah, we have to be able to pivot. But if you go into it with a mindset of, like, even when we’re not successful with ads, we’re learning. You know, I think it becomes like, obviously, if you’re a brand that stays in business year one, year two, year three, and you’re not jumping teams every two seconds, you’re essentially that team is learning that team is like, yeah, how can you not go a year, two years without just getting a ton of data. And I know that that’s bandwidth, and you have to stay in business and all those things, but relatively, you know, if you’re testing one or two things at a time, on top of what’s working, you know, you’re learning a quite a bit spread out over, you know, several months. It’s super good. This is like, you know, there’s so much advertising, you can unpack it forever and ever and ever. And I know, yeah, that, but you know, what’s one, what’s one tip as we sign off, like, what’s one tip you would leave for any listeners that are, you know, thinking about their q4 strategy, just because you’re going to drop this like going into q4 A tip for, for anyone going into q4 things to think about and then, you know, something, you’re working on their Junglr that you guys are excited about something? Where’s your focus? I guess, like, you know, is it scaling the team? Is it like learning a new type of ad type? I think those would be a great way to sign off. And then lastly, like, Where can people find
Elizabeth Greene 41:15
you? Yeah, definitely. Cool. So a cool tip to leave somebody? I am. I guess it’s gonna also segue. And what I’m working on with the team is definitely data analysis. So I recognize myself as an Amazon advertiser. I always tell my team that this is our level report. It’s advertising, you know, whether advertising goes up and down? How much are we spending on this? How does that relate to the rest of the account? But then also, what we discussed before on how Amazon advertising touches organic ranking, and organic ranking heavily influences, like total sales in the account. So there is the ability to leverage ads to grow the account. But they did again. We always have to balance it with profitability for the entire account. So what we’ve been working on, and what I would highly recommend to anyone who’s looking to level up their Amazon advertising, or just your account, in general, is to get better at reading your data. One thing that we’re looking at a lot is, what are our total sales? What is our cost of goods? What are our fees? How do our ads factor into that? And then what are our results, like net margins? And then how much does that leverage into the account? I could probably explain that because it was probably, like, super high level. So if you really want to get like nitty gritty with it, and I, I liken it to knowing where to dig. So what we’re doing is we’re saying, Okay, so here’s my entire product line, like we’re agreeing with large brands, we may have 1000s of products. Well, how does that individual product contribute to the overall sales of the account? What is my leverage on this one? And then what are my margins on that one particular product. And then, if you want to take it a step further, calculate your dollar margins per product, then calculate the percentage of total sales the dot product distributes, and then calculate the percentage of total dollar margins that the product contributes. And what that will give you is, we’ve seen it actually in quite a few accounts is one product, we’ll be doing the majority of sales. So for only looking at it from a sales perspective, we will say, Oh, great, like we need to double triple down on this product because it’s leveraging sales. But then, if you look at the dollar margins, you say, Wait, actually, this product is not my Top Contributor contributor to my margin. So although it’s bringing in the largest total sales volume, it might not be bringing in the largest total dollar amounts, my bank account, so maybe I actually want to leverage my spending somewhere else. And then if I can get that top one a little bit higher, and margins will then how, you know, how can I, I can actually influence a greater majority. So maybe at that point, I need to focus on profitability. So getting more sophisticated, I guess, like we were talking about before Amazon became more of a pay-to-play. So we need to know, like, what’s our play? And really, honestly, what I’m finding is that knowing the data, being able to evaluate that like this past Monday, I’m like, Alright, team, we’re learning how to make this pivot table. Like, the kind of things that, again, allows us to cut through the noise very quickly. Again, if you can put together the report, if you have the data, give me 20 minutes, and I can tell you where to focus, where you need to pull the margins, and where you need to put the pedal to the metal on gas. And then that allows you to know what I need to build, where I need to build it, where I need to pull back where you know, it just again, it tells you where you need to dig and where your effort is best applied. This is what I’m finding super important.
Andrew Morgans 44:50
And this is something you help with, right? Yes. Right. Yes, people can come to you for help with this.
Elizabeth Greene 44:58
Yeah, definitely. So we’re definitely doing this analysis for all our brands. Like I said, Monday, we had a team meeting, and every single one of my team members was like, This is awesome. I’m doing this on my account. I don’t even have to ask them. They’re what we’re acting like, wanting to find these places. Because we know, like, you know, the better we can leverage the data, the better we can help our grants bro brands grow. Just the better we all get overall.
Andrew Morgans 45:22
So where can people find you? Where can people connect with you?
Elizabeth Greene 45:25
Yeah, definitely. The best place to connect with me if you’re interested in management would be our website, which is Junglr.com, J-u-n-g-l-r. And then, if you’re just wanting to connect, the best place to find me is on LinkedIn.
Andrew Morgans 45:40
Got it. Thank you, Elizabeth. Like you’ve been so great, and this is our second take, so I really appreciate you coming back to wrap it out with me. And shout out again to our sponsor before we sign off, FullScale.io. Do you need to hire software engineers, testers, and leaders? Let Full Scale help. They have the people and the platform to help you build and manage a team of experts. When you visit Full Scale.io., all you need to do is answer a few questions and then let the platform match you up with a fully vetted, highly experienced team of software engineers, testers, and leaders. At Full Scale, they specialize in building long-term teams that work only for you. Learn more when you visit Full Scale.io. A mouthful sometimes, but without our sponsors, we will not be able to push this show and deliver it to you guys for free each and every week. So thanks again to our listeners for tuning in. Thanks to FullScale.io for sponsorship. And thank you, Liz, for your expertise on ads. I know it won’t be the last time you’re on the show. Can’t wait to have you back.
Elizabeth Greene 46:33
Yeah, it’s been an absolute pleasure. Thanks.
Andrew Morgans 46:35
I will see you next time, guys.