A common scenario the Pilothouse Amazon team runs into when auditing Amazon Accounts is brands seeing a certain return on their advertising and looking to scale revenue at that return. 🚀
But after some digging, what does the team find? The returns are there, but primarily driven by branded terms, not generic terms, as brands may think.
🤔 Why is this?
Let's pretend we are the thirst murderers over at Liquid Death.
When running an Auto, Broad, or Phrase match campaign on Amazon, you’re bidding on a specific keyword, say “carbonated water.”
Campaigns could then easily match keywords like “liquid death carbonated water” or “liquid death water.” 💧
This would give your campaign a great advertising cost of sales (ACOS) and show stellar performance, but if we look at the search terms, we see that it primarily matches those branded terms.
Amazon’s algorithm is just doing its job here… finding us the lowest cost, most relevant keywords customers are actively searching.
👀 Why does this matter?
When we segment out branded terms and get a true prospecting return on ad spend (ROAS), it’s significantly lower than the branded performance you may have seen.
True scale on Amazon comes from capturing net new customers through generic search terms. Branded is an excellent tool to get the flywheel turning and maintain a healthy overall target-ACOS, but its volume is capped.
Additionally, branded search volume can decline over time if you aren’t actively driving brand awareness off of Amazon.
So when you are looking to scale a campaign and set realistic targets, you must look at the expected efficiency of generic terms and use that to predict future efficiencies.
From a strategy perspective, you also want to see how your branded volume changes over time and in relation to other channels.
Expert level Tip ▶️ Recently doubled or tripled spend on Meta? Good branded segmentation will let you see the impact on Amazon, potentially allowing you to spend heavier on Meta if you look at the total brand lift across channels rather than just attributed Meta Sales.
🧠 So, what’s the solution?
The solution here is easy: segmentation and negative keywords.
Ensure all your branded terms are added as negatives to your prospecting campaigns. This will limit what they match on. Then have dedicated branded campaigns. This will let you view performance and make optimization decisions for each segment individually.
How do I check if this is happening to me? Review search terms of Auto, Broad match, and Phrase match campaigns by:
- Clicking into your campaign
- Click into the Ad Group
- Select “Search Terms” on the left-hand menu
- Review “Customer Search Term” for branded terms
When it comes to scaling revenue on Amazon, it's crucial to understand the true nature of your advertising returns. Dedicating separate campaigns specifically for branded terms allows for better performance analysis, and optimization to maximize your advertising returns, capture new customers, and achieve sustainable growth on Amazon.
