Amazon Advertising Strategies During COVID-19

26/03/2020

Digital Marketing ChannelAdvisor By Michael Schwartz

As our clients try to navigate the COVID-19 crisis, we see first-hand the many challenges that brands and retailers are facing every day. And it’s our job to help find solutions. 

So as we continue to work with our clients to mitigate these new e-commerce challenges, we wanted to keep you updated on industry changes and offer channel-specific strategies for all businesses to keep in mind. 

Below are seven strategies for brands and retailers to keep in mind when advertising on Amazon.

1. Shift your product (and budget) focus

The delayed shipping times for FBA products (as well as 1P products sold and shipped by Amazon) are having a significant impact on conversion rates, with merchant-fulfilled models actually seeing a significant advantage in many situations.

We’d recommend evaluating any recent changes in your campaign performance and re-allocating dollars to the most efficient products and campaigns: products with better shipping times, products with enough inventory remaining, or products with higher margins to help get cashback in your book.

2. Understand which products are seeing a decrease in demand 

Shopping has been completely disrupted by the current crisis, with some categories spiking in demand and others falling off significantly (see our breakdown of marketplace GMV trends by category). Make sure you take a hard look at your entire product lines and understand where demand is shifting, so you can tailor your ad budgets accordingly. 

In categories that are seeing decreased demand, we recommend lowering bids significantly and turning off any existing automation. You can’t expect past performance to be a good guide during the current situation.

3. Plan your campaigns around your inventory levels and shipping ability

For categories that are seeing a surge in demand, it’s important to understand how that surge relates to current stock levels — especially if you’re selling first-party (1P) or FBA, where it may be hard to restock in time. 

Analyse the days and weeks of inventory you currently have left against your ability to restock and adjust your ad spend plan accordingly. Depending on your inventory levels, it may be appropriate to increase or decrease bids. Stop your campaigns completely if you’ve planned to go out of stock on certain products, and increase your spend if you have a competitive advantage in inventory levels or ability to ship.

4. Launch new products 

With product demand ever-evolving and shipping delays creating uncertainty across many products, it might be a good time to launch new products that you’ve stockpiled. Quantities of some existing brands and products are running low, and consumers may be more willing to take a chance on a new product that still fits their needs.

Also, depending on your category, it might be a strong opportunity to grab market share on current best sellers. For example, let’s say you sell jeans. Many apparel retailers are slashing ad budgets right now. If you can afford to take on a higher ACoS right now for your products, you can likely climb the ladder organically and come out of it in the long-term with more market share than you had going in.

5. Offset your losses at physical stores with increased ad spend

For omnichannel manufacturers, it may be an appropriate time to increase ad spend on Amazon Advertising campaigns to compensate for sales being lost at your brick and mortar stores. 

As we mentioned earlier, the delays in FBA shipments are making many advertising campaigns unprofitable, so this only applies if you have the ability to fulfill orders yourself. Check out best practices for Amazon Merchant Fulfilled Network (MFN) here.

6. Monitor your last 7-day performance

Take a close look at your last 7-day performance on products, as it likely differs significantly from your historical performance. In some categories, it may be appropriate to aggressive increase or decrease bids.

Further, if you’re leveraging automation, we recommend moving from longer lookback periods (90-180 days) to shorter (7-30) and supplementing those with manual adjustments.

7. Focus on your Amazon Store and Sponsored Brands campaigns 

As screen time increases at home during revised work situations and potential lockdowns, many consumers may be more prone to casual Amazon scrolling for product inspiration. Consider more branding opportunities for your business. On Amazon, one of the most effective strategies for increasing your brand exposure is building out your Amazon Stores — where you control the messaging and experience — and driving to these Stores pages with optimized Sponsored Brands campaigns. 

For more strategies and examples for to optimize your Sponsored Brands campaign, our very own Clay Roop, senior client strategy manager at ChannelAdvisor, was just featured on the Amazon Advertising blog in their Agency Spotlight

If you still have questions about your digital marketing strategy, feel free to request a Complimentary Advertising Analysis from our Digital Marketing Managed Services team. Our team of experts will gladly take a quick look at your ad accounts and let you know what you’re doing right — and more importantly, what you could improve. Reach out and one of our consultants will be in touch soon.