Webinar Recap: How to Budget for Amazon Advertising
Amazon Advertising is one of the most important elements of any Amazon business—and it all starts with budgeting the right amount of spend, for the right products, at the right time. That may sound easy enough, but the truth is there’s some complexity involved.
In a recent webinar, Netrush’s performance marketing leaders, Brock Gettemeier and Katy Langston, simplified the various aspects of Amazon Advertising while providing a comprehensive framework for how to budget on the platform like a pro. Here’s a summary of the event, which was made all the more interesting by the fact that Amazon Advertising is more expensive—but also easier to measure—than ever.
The Customer Experience ‘Bow Tie’
Gettemeier, who serves as VP and general manager of Sellozo (the advertising automation platform that Netrush acquired in 2021), kicked off the webinar by sharing an illustration in the shape of a bow tie (below) that shows the various stages of the customer journey, from Awareness to Share. At the core is both Intent and Purchase, which is where Amazon sits.
“You're rarely going to Amazon just for research,” Gettemeier said. “You're really going there because you want something and you want it shipped in two days.” But while shoppers on Amazon have a higher level of intent to buy, “they don’t all have the intent to buy from you,” Gettemeier said.
The way Netrush sees it, there are three kinds of shoppers within the Intent stage: Generic, Differentiated, and Branded. And according to Gettemeier, brands not only need to understand the shopper intent levels, they need to budget for each.
“You can’t just think of Intent as a single bucket,” he said. “Your Generic intent traffic has the highest volume of customers but the lowest return. And so it's really easy to think, ‘I'm going to cut off the Generic budget and then I'll be able to retain Differentiated and Branded intent.’
“But the problem is, how much you're spending on your Generic intent today, that budget impacts how much Branded intent you're going to have in a week or a month from now. So, you really have to think of this as a funnel when you're budgeting, and know that if you make changes in one spot, you can't necessarily expect all of the other parts of your funnel to stay the same.”
Tips & Tricks for Managing Budget
Once you understand the three shopper intent levels, and why it’s important to consider each, then it’s time to start budgeting. That process begins with granular analysis at the campaign level, Gettemeier said, so that you can determine which of these four actions to take: increase the budget; reduce keyword testing; put the campaign in a different time slot (aka dayparting); or lower the target ACoS.
Gettemeier then detailed each option. He talked about some of the calculations that need to be made before appealing to the finance department for a bigger budget, touched on tools that can be used to make analysis easier (such as Netrush 360), broke down the three levels of keyword testing (Exact Match, Phrase Match, and Broad Match), demonstrated the power of dayparting, and explained why, if you’re going to lower your target ACoS, it should only come after checking the other three actions (and should only be done in small increments).
Inside Netrush’s Performance Marketing Playbook
The third part of the webinar belonged to Langston, Netrush’s senior director of performance marketing. She started her presentation by giving the audience “a peek behind the curtain” of Netrush’s Performance Marketing Playbook, beginning with a walk through of the four different Amazon Advertising campaign types: Branded, In-Market, Floater, and Amplification.
Langston then detailed the two primary strategies Netrush uses to implement those campaigns: Foundational Core and Aggressive Growth. The former is a full-funnel strategy designed to secure brand loyalty on Amazon—“to make sure you're capturing those who are coming through with a high intent on branded terms,” Langston said—and grab in-market consumers. The latter focuses on “really growing that presence on Amazon,” she said, “and taking market share off the table for competitors.”
Within this section, Langston also shared playbook details, such as which ad types to use based on strategy, how much budget to allocate towards Brand vs. In-Market, and recommendations on TACoS ranges.
Case Studies within the Playbook
What does putting the various campaign types into market actually look like? To answer that presumed audience question, Langston presented three case studies, including one that involved a brand that is newer to Amazon, with a newer product line in general.
The brand had been working with an agency that only had one lever for growth—”spend more to get more,” she called it—and it wasn’t doing the trick.
“So, one thing we did right out of the gate was significantly reduce their sponsored brand campaign targeting,” Langston said. “They had over 1,000 targets in the campaign. So, we really focused on where we could win instead of a kind of a ‘spray-and-pray’ approach.”
The result? Within the first two months, the brand was able to see a 38% increase to marketing attributable sales, with a 20% improvement to ACoS (see right on desktop, above on mobile).
“What this means is the brand was able to become more efficient and really grow its monthly top-line sales,” Langston said. “We really blew out of the water their previous agency’s assessment of the only way to grow was to spend more.”
The other two case studies showed how Netrush helped both an emerging market leader become the fastest growing brand in its category and a health and wellness brand win over “new year, new you” shoppers around the start of 2023.
ATTENDEES’ QUESTIONS, ANSWERED
The webinar concluded with a Q&A session hosted by Claire McBride, who leads research, insights, and education for Netrush. One of the questions she received from attendees and posed to Gettemeier and Langston was, “Should budgeting look different for new product launches versus mature products?”
“Definitely,” Gettemeier answered. “When you're launching a product, it's extremely expensive. You’re buying organic ranking, you're buying reviews, you're establishing yourself. If you're a very mature product, and you're at the very top of your SERP (Search Engine Results Page) on Generic intent keywords, you only have to pay enough to maintain that ranking. I really view launching a new product as an entirely separate budget. Otherwise, you may literally find yourself having a product that never was truly launched.”
CONCLUSION
There’s a lot to consider when budgeting for Amazon Advertising—but those considerations need not stand in the way of mastering all parts of the equation. Over the years, Netrush’s performance marketing team has developed a tried-and-true formula for getting your arms all the way around one of the most important elements of any Amazon business. Start with the Customer Experience “Bow Tie,” perform a granular analysis at the campaign level, and then lean on Netrush’s Performance Marketing Playbook to get to where you want to go.
Watch the webinar on-demand to learn more about how to budget for Amazon Advertising. Contact us to set up an exploratory meeting with our performance marketing team.