June 2021 | latest update: 07.09.2023 | by Lili
Advertising vs. protecting your brand on Amazon
Table of contents
- Advertising on Amazon
- How does it work
- Ad wars: the costs and benefits of Amazon advertising
- Online brand protection for a clean marketplace
- Conclusion
What is the worst nightmare of your brand’s marketing department? If it’s the scenario where a customer types your product’s name into Amazon and another brand’s products pop up, we have bad news: this is pretty much reality. And it’s mostly thanks to Amazon Advertising.
Screenshot of an Amazon product search
As seen in the screenshot above, despite the clear search terms typed into the search bar (exact brand and product name), the results page lists completely different products by different brands in the first two lines. The product I was actually looking for only showed up in the third line.
Now, there are worse fates that can befall a brand. However, over time, the smaller losses suffered due to customers hijacked by other brands’ advertising can create a significant amount of lost revenue.
But what can you do to prevent this? Do you have to jump on the wagon and start spending fortunes on Amazon Advertising as well?
Advertising on Amazon
There are around 12 million products offered by Amazon. Together with third party sellers, this number rises to 353 million. No wonder brands feel like they need advertising to stand out of the crowd.
E-Commerce has gained a lot of ground in 2020, and so did Amazon Advertising. With 11.3 percent of the total digital advertising revenue generated in the US the e-Commerce giant is the third largest online advertising company there behind Google and Facebook. Amazon Advertising accounts for about 11.8% of digital ad spending in the US in 2022, and in the second quarter of 2023 alone, the company generated $10.68 billion from its ad services.
But this segment of the company is doing extremely well in other parts of the world, too: in Germany, for example, advertising brought in $2.44 billion for Amazon in 2021, up by 66% from 2020. Looks like both Jeff Bezos and his e-Commerce company are skyrocketing these days.
How does it work
Amazon Advertising works on a self-service basis. The whole process of setting up an ad is very client-friendly and is explained in detail. There are even tutorials available online that help you set up your campaigns.
Amazon ads have specific categories and payment options. Sponsored brands, sponsored products, and sponsored display are the most well-known and widely used types of ads.
Sponsored brands
This type of ad allows brands to display multiple products under the same customized headline and with their brand logo. It works with keyword-based searches and payment is calculated on a CPC (cost-per-click) basis, which means that you only pay Amazon for the ad if a customer clicks on it. Sponsored brands ads can be displayed above, besides, or even within shopping results.
Clicking on the picture of the product in the ad takes the customer to the specific product page, or, if they click on the hero image, they go to a landing page, like the brand’s store on Amazon.
Sponsored products
Sponsored products are quite similar to sponsored brands in payment method (CPC), keyword-based searches, and the customer ending up on the specific product pages.
The difference is usually the aim of the ad campaign. While sponsored products are the go-to campaigns for pushing a certain product, sponsored brands aim to increase the overall brand awareness and recognition.
Sponsored display
Similarly to sponsored brands, sponsored display helps you raise brand awareness by creating and showcasing display campaigns automatically. These ads also work on a CPC basis, but in contrast to sponsored brands and products, sponsored display ads can appear both on- and off Amazon. This means that sponsored displays are an excellent tool for reaching a wider audience via retargeting on third-party websites.
Illustration of a website with an Amazon sponsored display ad pasted to the right side
Ad ranking
Ad ranking on Amazon is decided by CPC bids that sellers place.
When setting up your ad, you’ll be asked to name the maximum amount you’re willing to pay to have your ad displayed. Whoever names the highest amount (and obviously, the same keywords) wins the top spot. This can result in a bidding war and brands offering more money than necessary to get the highest ranking. To prevent this from happening, you’ll need to be aware of your market niche’s ad pricing habits if you want to come out on top.
Ad wars: the costs and benefits of Amazon advertising
With Advertising, your products are boosted out of the crowd and pushed right in front of potential customers. However, don’t forget that on the marketplace, it’s not only legit competitors your products are fighting with, but also cheap knockoffs and grey market products. This means that the crowd of products to beat in the rush to the customer is even larger than you may have thought.
You can spend as much or as little on Amazon Advertising as you want. Because of the bidding system, it’s hard to put an exact number to the cost of Amazon ads. Typically, the average CPC price is $0.97 with a daily spend of $380 and a daily sales revenue of $1.050.
This looks quite promising, but don’t forget that there’s a long and winding road to the ultimate success: first a display, then a click, and then a buy.
Because Amazon offers targeted and customizable advertising on the actual marketplace your products are offered at, it may be worth looking into it. But is it the only provider that can boost your products out of a crowd of counterfeits and knockoffs?
Online brand protection for a clean marketplace
You can spend lots of time and money on Amazon Advertising to ensure that your products aren’t lost in a sea of counterfeits and other products, both branded and from no name brands on the marketplace. Or, you can find a more lasting and comprehensive solution that cleans knockoffs from the marketplace and helps your brand shine - without excessive advertising.
Enter online brand protection.
globaleyez’s services aim to put a stop to counterfeits, grey market products, and any other types of IP infringements that hurt your brand. Our efforts create a flawless marketplace presence for your brand where counterfeits disappear and don’t stifle your own original products.
"Thanks to our active work on Amazon, our customers have gained more control over their brand’s products and now have a superb appearance on the one hand and a high ranking without advertising on the other."
How does it work
Our various services, including domain, social media, marketplace, and image monitoring aim to discover listings online, including marketplaces and single webshops that may harm your brand. These include counterfeit or grey market products, and any other potential infringements of your IP rights.
With our test purchase service, we gather court-admissible proof about the origin and authenticity of the products, as well as the seller’s behaviour. If we discover that the products are indeed infringing your IP rights, our enforcement service ensures the swift removal of the offending listing from the marketplace.
This way, counterfeits and other products that shouldn’t be on offer disappear from the marketplace, leaving only your original, authorized products behind. The result: a flawless, undistorted marketplace presence ensuring that your own products get in front of customers instead of those offered by fraudsters.
Just like advertising. But this way, you also get rid of counterfeits and grey market products. Talk about killing two birds with one stone.
Conclusion
Advertising is a very useful way to get your products in front of potential customers. However, advertising can’t help you remove products from the market that infringe your IP rights.
If you want to get rid of counterfeits and grey market products that prevent your customers from getting to your original products, reach out to globaleyez and let us secure your brand a flawless online and marketplace presence.