When formulating an advertising strategy on Amazon, it’s essential to understand the three primary outcomes. Depending on our advertising goals, we will Expand, Optimize, or use a Hybrid approach to grow your brand on Amazon. Each strategy has it’s pros and cons and works well at different stages of product development.

Below is a breakdown of the strategies, types of campaigns, and metrics to track each of the primary outcomes. 

Expansion Strategy

An Expansion oriented advertising strategy focuses on increasing sales velocity. The cost of more sales is a lower return on ad spend. Use this strategy when launching products, competing for SEO, or liquidating products. 

The strategy and campaign types to focus on are;

• Sponsored Product Auto Campaigns – Great for keyword discovery and expansion using Amazon. 
• Sponsored Products Category Campaigns – Own top of search and the product detail pages for direct and complementary products for your category.
• Sponsored Products Display Campaigns – remarket to visitors who visited your product pages or competitors. Great way to access DSP without the price tag. 
• Sponsored Video Campaigns – launch short, branded videos focusing on different messaging at different stages of the buyer journey.

The metrics to track when focusing on an expansion oriented strategy are;

• Sales
• Impressions
• Clicks
• Click-through Rate
• New-to-Brand Sales 

Optimization Strategy

An Optimization oriented advertising strategy focuses on improving efficiency in the account. Enhancing the effectiveness of our campaigns increase our Return on Ad Spend (ROAS). Use this strategy when profitability is the focus. 

The strategy and campaign types to focus on are;

• Focus on Low ACoS keywords
• Adjust Bids to focus on the bottom of the funnel, long-tailed keywords.  
• Use Manual Sponsored Product campaigns to focus on very relevant search terms.
• Use Product Targeting ad types to focus advertising efforts on very relevant competitor products.  

The metrics to track when focusing on an expansion oriented strategy are;

• Spend
• Advertising Cost of Sale (ACoS)
• Conversion Rate
• Cost per Acquisition

Hybrid Strategy

A Hybrid approach is an advertising strategy focusing on incremental growth. This strategy focuses on growth opportunities within an established budget and ACoS targets. Use this strategy for long-term success on Amazon.

The strategy and campaign types to focus on are;

• Aggressive bid management to maintain a targeted baseline based on ACoS and Spend.
• Targeted products with ACoS and Spend thresholds, allowing us to expand and optimize incrementally. 
• Focusing on deploying and testing different ad types using 60-day data sets to conclude effectiveness. 
• A Hybrid Strategy is the most effective advertising strategy for long-term growth on Amazon. It allows us to scale your business using Amazon PPC Ads profitably. 

The metrics to track when focusing on an expansion oriented strategy are;

• Sales
• Spend
• ACoS
• Orders

Amazon advertising is a powerful tool in driving results. Understanding the benefits and consequences of each tactic will help form your overall strategy for managing your advertising account. 

Get in touch with the Bellavix Team if you need help with running your business on Amazon. We Grow Businesses on Amazon.

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