Have you heard about people running product offense or defense ads on Amazon?
These are specific strategies used in Amazon advertising to either increase market share and “steal” sales from competitors or to prevent competitors from doing the same to you.
In this Tips edition, I’ll cover defensive strategies for protecting your listing and brand from copycats and competition on Amazon.
- What are Product Defense Ads
- Strategies for product defense
- How to determine cannibalization vs incremental revenue
What are product defense Ads?
On Amazon, product defense ads refer to protecting your core listing from competition.
If you look at your listing today, how many competitors show up directly on your listing under a Sponsored Tab? We can see 6 competitors below.
On your own listing, do you really want people price comparing to other brands? Of course not.
Product defense ads have 3 core goals:
- Kick off competitors from advertising on your listing
- Upsell and move complementary products
- Provide on-the-fence customers another chance to convert
Now let’s see what this looks like when you’re running defensive ads and cross selling your different products.
You can see below, Natural Dog Company is paying (Sponsored) to advertise their different SKUs underneath on their own listing.
Defensive Ad Strategy
The best defensive ads use a mixture of Sponsored Products and Sponsored Display ad units to display their full catalog.
My preferred strategies are below
- Catch all (simplest/easy to implement)
- Top Product
Catch All Approach
Under this strategy, all of your products simply target all of your other products. You’ll want to optimize each Sponsored Product campaign to ensure you only show up on product pages and are not inadvertently competing with yourself.
Tip: This can be done by setting low bids and using a high Placement modifier for Product Pages. Something like 400-500% works well.
This strategy is easiest to implement. Just add all of your products to an ad group and target your entire catalog.
Top Product Approach
The top product approach relies on advertising your hero ASIN against other products in your catalog. Your Hero ASIN has the strongest sales and conversion rates.
As such, it has the best chance to convert an on-the-fence customer.
Under this strategy, you’ll take your strongest ASIN (normally your best seller) and advertise it against every other product in your catalog.
Upsell/Complementary Product Approach
The upsell strategy relies on advertising higher price products on low price products and vice versa. This provides customers with a choice between different price points.
One of the best ways I’ve seen this implemented is by using Sponsored Display ad units. Sponsored Display ads allow you to use a headline which is very useful for this strategy.
A good headline to use maybe “Add [product name] to your cart also for increased fun!”
Good Results vs Cannibalization
After implementing these strategies above, it’s not unusual to see results quickly.
I’ve seen ROAS (Return on Ad Spend) routinely hover in the 7 – 10 range for these types of ads.
Initially, you’ll go amazing! I am a marketing genius!
…but are you?
It’s essential to monitor your overall sales and compare periods before and after implementing these defensive ads strategies.
I recommend doing it for a period of 3 weeks before and after. The key metrics you want to look at are
- overall sales
- overall ad spend
- % of PPC-organic traffic.
A lot of times what you’ll see is your % of PPC sales went up (good) but your overall sales didn’t go up (bad). So essentially you just cannibalized sales that were going to happen anyway.
This is a VERY common trick Amazon Ad agencies will use to instantly improve the ACOS in the ad account.
Be careful and be sure to monitor the actual results before/after implementing these strategies.
2 Actionable Takeaways
Here are actionable takeaways that you can apply to your business today:
- Implement one of these product defense strategies today and measure the overall increase in revenue in comparison to ad spend
- Use Sponsored Display ads for upselling/downselling complementary products. The headline is particularly useful for increasing the take rate of these offers.