Amazon Advertising in the Time of Coronavirus

The fall out from Covid-19 has delivered a shock to Amazon’s operations, the millions of sellers who use the platform, and the buying patterns of Amazon shoppers. 


We’ve seen sales spike in essential categories (grocery, health & personal care, supplements), causing Amazon to hit pause on receiving non-essential items while they work to respond to customer needs. Prioritizing essential goods has meant sales slumps for some products in non-essential categories due to shipping delays and drastic priority shifts in online shopping. However, that slump is starting to recover as Amazon shipping times get closer to normal and customers are settling into a new normal where they shop more online. Categories that provide ways for consumers to entertain themselves at home (toys & Games, video games, arts, crafts & sewing) are seeing increased sales. Patio, lawn & garden, and home decorating and improvement are all trending upwards as shoppers turn their attention to where they live (and now largely work.) In other words, sellers working within non-essentials categories can still capture shopper’s interest as our current circumstances evolve.


Given these impacts to the Amazon marketplace, it’s vital that sellers adapt their advertising to the current situation. Strategies for sellers will vary depending upon several factors: their product category, shipping delays, manufacturing issues, inventory levels, and fluctuating consumer interest. 


Let’s go over various scenarios you may be experiencing and opportunities for growth. Adeptly managing your advertising during these unprecedented times will keep your business moving, and possibly even gaining new customers.


Handling a Sales Spike

If you’re experiencing a sales spike, and your inventory is looking good, you’ll need to adjust your advertising budget to manage the increase. Continue to optimize your bids and find new and relevant keywords to add to your campaigns.   


Running out of stock? Consider dialing down your advertising on those specific products that are beginning to run low while allowing ads on available inventory to continue running. 


CPC Costs are Dropping: Lean Into Advertising 

If there is any silver lining at all to this cloud for sellers, it is that costs per click have come down in many cases, making this is a great time to lean into advertising if you have the budget to do so. Pull a bulk campaign file and review keywords with low CPC and high conversion rates that are within your ACoS targets. Keep a competitive bid (but one you can afford) and look for similar keywords to add to your campaigns.

 

Watching Your Conversion Rates

Conversion Rates on advertising will signal where you need to plug leaks and tighten up your proverbial ship. You might be seeing a drop in conversion rates due to delayed delivery times, and if so, consider switching to FBM if you have that capability and can provide faster delivery. You can temporarily turn off your current FBA listings to ensure your FBM listings take the Buy Box. 


Maybe FBM is not an option, or you are already FBM and are experiencing lower conversion rates. If so, we recommend checking your conversion rates against ACoS to identify poor performing keywords; pull those bids back. Preserve your margins during an ACoS spike by pausing on underperforming keywords. Until Amazon’s delivery times improve, pause any ads or products that are experiencing big drops in conversion.


Monitoring New to Brand Metrics

The New to Brand (NTB) metrics relate to Sponsored Brand (SB) and DSP ads, and it measures orders from customers who have not purchased from your brand within the last year. As more people are shopping online, this metric has gone up. 


In order to take advantage of this increase, review your Sponsored Brand ads; the ones with the strongest New to Brand metrics are the ones you need to pull out and dust off. Meaning, optimize their bids and budgets to maximize their reach and to ensure their capturing all the new customers. 


Not using SB ads? Start now to ensure you’re highly visible to the influx of new traffic on Amazon. New campaigns should be narrowly targeted and running on low budgets in the beginning while you monitor their performance. 


Win New Customers 

With Sponsored Display and DSP, you can target customers who have viewed your product after they’ve left Amazon. These retargeting ads keep customers in your brand’s sales funnel by keeping your product fresh in their minds. Because Sponsored Display can be spotty on performance, we recommend beginning with a small budget while you experiment with what works. 


Another strategy for winning new customers is using Product Attribute Targeting, a commonly overlooked feature within Sponsored Ads. With Product Attribute Targeting, sellers can target and place ads on a specific ASIN; you can target complementary products, your own products (for cross-selling), or a competitor's product. Again, keep the budget modest while you figure out what target combinations work for your product. 


Don’t Forget the Big Picture

While you implement changes to deal with the immediate impacts brought on by the Coronavirus, don’t forget to prepare for the future. How might this pandemic influence and change your business practices for the next year? And the year after that? What is motivating your customers now, and how might that change in the future? How has COVID-19 changed how the consumer interacts with your product?  


Whatever you do, don’t panic and make rash decisions. Sellers who adapt quickly and advertise smartly can see this through and come out stronger on the other side. 


Looking for help with managing your brand on Amazon? Contact us for more information on Egility’s services.

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