In this article, we will be taking a deeper dive into reactive advertising. If you missed it, first go read Reactive Advertising Part 1 (link) where we talk about the four different strategies of reactive advertising on Amazon (branded, category, complementary, and competitor keywords) at a high level. In this article, we will not discuss proactive advertising but will do a future article on it. Today we are going deeper into the branded strategy - when to use it, how to use it, and how much to invest.
What are Branded Campaigns?
Let’s say you are a brand on Amazon and hypothetically, you have $10,000 to spend on a monthly basis for advertising. You need to make sure you are protecting your turf, aka protecting your branded keywords from any predators or competitors on Amazon.
When creating your Amazon advertising strategy you may not necessarily want to lead with the branded category. If you are looking into Amazon advertising and say your brand is GoPro, then you would want to heavily invest in branded advertising. Basically, if you are a well-known company, then branded advertising is a good strategy for you. If you’re GoPro, then you don’t necessarily want to go heavy on competitor keywords because you already dominate the market. However, what happens when you’re #10 in the action camera category? Obviously, you’re not GoPro and you may not have their technology but you have a purpose and some sort of a solution for your audience, otherwise, you wouldn’t have made that product.
Here’s how we would frame that situation:
Understand your brand’s position and level of maturity. If your brand is #10 and you have 2,000 reviews and you’ve been on the platform for two years and you have a really solid product you would want to make sure to invest in the branded category but not so much that it cannibalizes your organic sales. However, if you’re GoPro, any time you put the word “GoPro” in the Amazon Advertising module, whether it's for sponsored products or sponsored brands, your campaign will be at the very front of the advertising module. This means that when someone is searching for Go Pro, your advertising will be at the very front. When the advertisement is clicked on, you are gaining a potential sale. However, if that person was already looking for GoPro, did you really need to invest in GoPro? The answer is no because you are cannibalizing your organic sales with advertising sales that you otherwise didn’t need to invest in. Needless to say, if you don’t invest in GoPro, what happens is brands 2, 3 4, and 5 are going to be investing against you because they want to use your growth and GoPro name recognition to appear at the very top of the search list.
Understand the dynamics of advertising and understand your investments so you don’t overly invest just like GoPro would be if a mature brand cannibalizes its organic sales. On the flip side, don’t under-do-it because then predators will try to take advantage of the fact that you’re not heavily investing in order for them to appear first.
If you are a brand that is newly launched on Amazon and you have $10,000 to spend on the advertising module, what we recommend is to invest no more than 30% of your budget on branded anything. The same thing applies if you are doing category. Category spends all day in the category unless you own the category. So if you are #5 then you really need to invest in the category advertising because you want to get to number one. However, if you are already number one, you don’t need to overly invest in the category. Instead, convert more on the competitor and complementary advertising.
When doing branded advertising, do it to a degree that you are protecting your turf but you are not to a degree where you are cannibalizing your organic sales. The moment you cannibalize your organic, you’re losing money because those are sales you would have had anyway. You don’t need to spend money on a customer that is already looking for your product and going to convert.
Hopefully, this clears some of the ability but if you have any more questions, please email us at firstname.lastname@example.org or fill out our contact form. We will do more articles diving into competitor, category, and complimentary advertising, so stay tuned. If you're not sure how to get started, be sure to read our other articles. Send us an email at email@example.com if you want to learn more about what we do, how we do it, and how we can partner together.