Why Invest in an Always-On Advertising Strategy on Amazon and Other Marketplaces?
When we speak with clients about their advertising strategies, budget is often front and center of the conversation. Our strategists understand it’s tempting to save advertising dollars for peak time periods that guarantee a high rate of return. Especially during times of uncertainty and in a landscape that’s ever-changing. However, advertising does much more for brands and their products than drive sales. It’s important to understand this to ensure your brand is putting its best foot forward. Continue reading to learn more about why it’s beneficial to invest in an always-on advertising strategy on Amazon.
Why is an Always-On Advertising Strategy Important?
Fueling Amazon's flywheel is a primary objective for most brands that sell on the channel. Doing so ensures there's a steady stream of traffic and sales velocity building for their catalogs. One way to do this is by investing in an always-on advertising strategy. Whether it's simply via search, or in conjunction with DSP, a consistent advertising presence is necessary to compete.
Not only does this offer brands a competitive advantage, but it helps increase relevance over time. In addition, most of Amazon's above-the-fold search placements are reserved for Sponsored Products. Brands that don't bid for these placements will repeatedly lose sales to competing products.
Finally, saving advertising spend for peak seasons like Prime Day isn't the most effective long-term strategy. Advertising before, during, and after these windows positively impacts lifetime RoAS and performance.
Are there More Benefits to Always Advertising?
Aside from those mentioned above, there are many benefits to consistently advertising on the channel in some capacity. First, the more brands advertise, the more data they have to inform their overall strategies. This is crucial as the marketplace becomes increasingly competitive and brands more sophisticated.
Always advertising also allows brands to grow their market share and share of voice. In other words, this increases the percentage of advertising inventory and organic search placements a brand owns versus its competitors. Remember, if your brand isn't getting in front of customers with its advertisements, a competing brand or product is.
Within the same vein, brand defense is another reason to not take a break from advertising. For example, targeting your own brand's search terms can prevent competitors from showing up when a shopper searches for your brand's products. This is especially important for brands that aren't winning these search terms organically. Focusing on brand defense also helps to provide shoppers with a consistent experience. As e-commerce continues to grow, this will be necessary to compete and ensure your brand is always top-of-mind.
A final consideration is how advertising can drive net-new customers on a regular basis. While Amazon gets more traffic during peak time periods, consumer habits are changing all the time. And again, as more people shop online and research products, being present and discoverable is key to growing your business.
More Alternative Options and Downsides to Turning Off Advertising
Throughout this post, we've shared several downsides to not having an advertising presence. Most have related to competition. Taking it a step further, not only will competitors earn sponsored placements, but their costs will decrease. And with that, their budgets will become larger.
Aside from competition, brands that don't use an always-on strategy reduce their chances of winning future auctions. This can make it difficult to earn desired placements and performance will inevitably suffer. In our experience, brands in this position have struggled to rebound. Simply turning ads back on or increasing budgets isn't immediately effective. In fact, it's not uncommon for it to take weeks or months to regain meaningful momentum.
First and foremost, it's important to set clear and attainable goals through your advertising efforts. Then, prioritizing these goals will allow you to also prioritize budgets. This makes having an always-on advertising strategy less intimidating because it offers a layer of control over your spending.
When it comes to keywords, we explained the importance of bidding on your own branded search terms. In addition, we suggest including a mix of non-branded and categorical terms, as well as competitor terms. Choosing how much to invest in each type of keyword will depend on your brand's goals.
Finally, at MPS, we often leverage auto-targeting for our clients' always-on search campaigns. Typically, we see lower CPCs with auto campaigns and can potentially gain the most learnings.
If you'd like to see proof of this concept, check out this case study. It uses real client data and explains how brands benefit from an always-on investment, specifically through DSP.
If you could use the support of a strategic partner, schedule a free consultation. And, as always, we’re here to answer any questions about your brand’s presence on Amazon and other marketplaces. Finally, should you be interested in learning more about a partnership with MPS, check out these resources.
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