It was 10 years ago, Jeff Bezos famously quipped that “advertising is the price you pay for having an unremarkable product.” As it relates to Amazon today, that logic holds as much water as any of these fine-looking sieves found on Amazon itself. In 2019, the retail site is largely a “pay to play” platform when it comes to defending and driving market share growth. This reality necessitates that Amazon sellers commit to advertising spending on the platform, but also do so based on expected conversion rates and search volume in order to preserve profitability while gaining market share.
How we got here
Two contributing factors have driven Amazon to its current state for sellers. First, across the most popular search terms on Amazon the share of total conversions for a given keyword, on average, heavily weight towards the first few results on the search page. This fact may have been true in the past, but its significance today becomes crystal clear when looking at Amazon’s own brand analytics data. Over the month of August, across the top million search terms on Amazon, the top three organic results captured an average of 62% of conversions.
Dovetailing with this behavior are the increasing prevalence of ads on Amazon search pages. Across nearly every popular search term across nearly every product category on Amazon, multiple Sponsored Product listings exist above the fold, along with, to a lesser degree, a Sponsored Brands placement at the very top of the page. Using the organic conversion share as a proxy for user behavior on the search page overall, those top paid placements are capturing a substantial share of total conversions.
All this being said, when it comes to user behavior on Amazon, not all categories are created equal. Anecdotally, think about how many options you would consider, and how long you would take to shop, for a 2-pack of ketchup bottles online versus a pair of pants. These differences bare out in the underlying data, which I studied as part of my work at Teikametrics.
How advertising varies by category on Amazon
To get this category-specific picture of Amazon advertising, I examined the paid and organic listings present on the first page of results across the top one million search queries on Amazon over the month of August 2019. The search results data for this analysis was captured over the course of the final week of August 2019, and the category segmentation was based on the top category suggestion from Amazon listed in the sidebar for that search.
I focused on top 20 physical goods categories by the number of queries present in the top million search terms. I then examined the number of ads present in the top 10 combined paid and organic results, in addition to any Sponsored Brands placements, on a per term basis, expressing this on a 0 to 100 index. The category labeled ‘100%’ had the most ads in the top 10 results, with all other results being expressed as a percentage of that total.
For context, I also provided the average top three organic conversion share of each term analyzed in the category, as provided by Amazon Brand Analytics, along with the average price of all products on the underlying search results page. The analysis underscores the level of variance across verticals when it comes to the number of ads at the top of a search results page on Amazon.
Categories more aligned with hobbies, specifically “outdoor recreation,” “arts, crafts and sewing,” and “automotive” had the highest number of ads in the top 10 terms. This is likely due to brand affinity being a major driver of purchases generally in these categories, and many players outfitting across an entire category itself. You may know someone who always buys Coleman or North Face camping products, as one example. For brands, attracting those shoppers and getting them introduced to their brand can create subsequent, related purchases across their wider catalog.
Categories with comparatively lower rates of ads in the top 10 results were more aligned with high consideration, and more accessory-laden categories. These include “toys and games,” “computers and accessories” and “baby products.” In each of these categories, consumers are looking for the “right fit” for their needs based on a wide range of criteria (e.g. age of the child, color preferences, cord length etc.), and may place those needs above sticking with a certain brand, or be more brand agnostic in general.
Both fashion categories stand out, with relatively high ad rates, but lower Sponsored Brand rates. While these are both competitive marketplaces on Amazon, the fact that consumers aren’t as likely to convert on the top results makes those top placements potentially less valuable. These categories are also home to a particularly large number of resellers, who cannot purchase Sponsored Brands placements.
On the other side of the spectrum, both the “beauty and personal care” and “office products” categories have a comparatively high top three conversion share, yet a relatively low rate of ads in the top 10 results. This could relate to slimmer product margins crimping the ability for brands to commit significant budget to ads, but similarly represents a good opportunity for brands in this category to capture more conversions should it be economically viable.
While this analysis captures a moment in time on Amazon, marketers should see this as directionally relevant as they set their strategy for Q4 and beyond.
Sponsored Products and Sponsored Brands advertising is particularly intense across certain categories on Amazon. If you’re a seller in those markets, you need to gain a thorough understanding of which search terms you should target, both from a volume and margin perspective, and be able to bid to value effectively. Remember to not fall into the “magic keyword” trap. Once you have enough data to make an informed decision, you may want to trim down the list of terms you are targeting against, and reallocate budget and adjust bids towards that smaller, higher volume subset, especially during high-traffic periods like Q4.
Conversely, in those few categories with top conversion rates outstripping advertising placement rates, marketers should see this as a market inefficiency they may be able to take advantage of. In these categories, it’s more likely you’ll find relevant, fairly popular search terms where a Sponsored Product ad for your product can rank high on the page, without breaking the bank on a CPC basis.
Opinions expressed in this article are those of the guest author and not necessarily Marketing Land. Staff authors are listed here.
Marketing Land is a daily publication that covers all aspects of the digital marketing industry alongside sister publications, MarTech today and Search Engine Land. Daily news coverage includes breaking stories, industry trends, feature announcements and product changes at popular platforms used by digital marketers to reach consumers online.
12 Tools and Resources for Software Developers in Insurance
If a developer designs a system for Big Data analysis or creates programs for processing and analyzing application data for mobile gadgets, in any case he cannot do without analytics tools and services. Big Data is understood as the basis of the business of insurance companies that depend on information, that is, probabilities, statistical data, customer information, and so on.
Today, for programmers whose responsibilities include insurance software development, many useful tools have been created that are suitable for their needs and corresponding to their skills.
TOP-12 tools for programmers of insurance companies
Every developer who works on coding for insurance products will need the following 12 “helpers”:
- BitDeli. It is a startup that has been operating since November 2021. With its help, programmers are able to analyze various data using a variety of metrics through Python scripts. An important plus of it is that the scripts can be of different levels of complexity, which will depend on the needs of the developers. They can even be self-taught. Suitable for analytics. The solution is easy to use.
- Continuity. It is a platform that was created with the aim of pulling businesses to the same level as the companies of its creators – Yahoo and Facebook. The guys created a data structure to implement a new level of abstraction over complex connections in HBase and Hadoop. The main advantage of the platform is the facilitation of Big Data development processes for programs that are designed to work with external and internal audiences.
- Flurry. This application is in the “store” format, which is intended for the creation of mobile programs, as well as for the analysis of their data. This allows the application to be improved.
- Google Prediction API. Suitable for developers who have the necessary knowledge to work with the Prediction API. This interface will provide a wide range of diagrams and topics, and will also allow the application to give correct answers.
- Infochimps. We are talking about a platform, despite the fact that the brand today is trying to become a company and become even more successful. As for the platform for the programmer, he gets the Wukong framework, which has a key task – to interact with Hadoop and its data, while using Ruby scripts.
- Keen IO. In 2012, this tool was recognized as the best and most effective in its category, and it is used in analytics by mobile application developers. Its plus lies in its ease of use. You need to apply just one line, which is inserted into the source code to be able to track all the necessary information from the programs.
- Kontagent. A tool for processing huge amounts of information.
- Mortar Data. It is a cloud service that has managed to replace MapReduce with a combination of Python and Pig. It differs in simplicity and clarity in operation.
- Placed Analytics. A tool that provides programmers with ready-made products. With its help, it is possible to obtain complete information about the use of the application by customers: where, when and how long it lasted. The data is especially useful for app owners and advertisers.
- Precog. It is an interactive environment for developing insurance analytics products based on Quirrel, an open query language.
- Spring for Apache Hadoop. A tool that greatly simplifies the creation of programs that use Hadoop, and also provides integration with other Spring applications.
- StatsMix. It is a tool with which developers can collect and analyze data received from programs using only the languages they have learned.
Take a look at the Fireart site for more interesting and useful information. The main thing to remember is that analytics not only assesses the quality of traffic, looks for ways to increase conversion and reduces the cost of attracting customers, but also determines the most effective advertising channels, compiles portraits of visitors and their behavior patterns on sites, identifies site shortcomings up to technical errors.
From Creation to Stellar ROI
Reaching the right customers with your Google Ads campaigns is critical to increase conversions. While it’s possible that scattershot advertisements could catch the interest of Internet users, it’s far more likely that this general ad approach will result in a disconnect between dollars spent and sales made.
To help ensure your ads are reaching the people in the right place, it’s worth leveraging a function in the Google Display Network (GDN) known as affinity audiences. Using these audiences helps pinpoint customer segments that may be more likely to purchase your products, in turn driving more effective and efficient ad spend.
But what exactly is an affinity audience? How do they work, how can you create your own — and what can you expect once you dial in the ideal customer segment? Let’s find out.
What are Affinity Audiences?
Affinity audiences are used by the Google Display Network to deliver your ads to relevant locations online. Given that Google’s network reaches more than 90 percent of Internet users worldwide, it’s well worth the time and effort to understand and apply these audiences at scale.
But what is an affinity audience?
Let’s break the term down into its component parts. Audience is easy — it’s the group of people that will see your ad. Affinity, meanwhile, is defined as “a feeling of closeness and understanding that someone has for another person because of their similar qualities, ideas, or interests.” The result? An affinity audience is a group of potential customers that share similar interests or qualities (similar to a buyer persona).
Using affinity audiences allows your brand to better align ad campaigns to buyers who are interested in what you have to sell. For example, if you’re in the coffee-making business but also have a focus on reducing plastic waste, your affinity audience might contain both people who love coffee and those who love the environment. Groups with both of these qualities are far more likely to buy your product than either group individually.
Affinity targeting, meanwhile, is the process of identifying the ideal affinities that align with your product or service. Consider the coffee example above. While targeting buyers who love coffee helps improve your brand placement, it also puts you in direct competition with a host of other brands all producing similar products. Additional affinity modifiers that narrow your focus — such as sustainable growth processes, fair labor practices, or environmental priorities — can help set your brand apart.
Do note that it is possible to get too specific with your audience targeting. For example, if your coffee brand targets audiences that prefer beans from a specific region that are collected, packed, and shipped in a specific way, you may end up with a handful of very loyal customers but almost no broader appeal. As a result, targeting needs to narrow the focus without preventing you from reaching the greater public.
What are Custom Audiences?
GDN and the Google Ads platform contain a host of pre-built Google affinity audiences — also called segments — that you can use to focus your marketing and advertisements. These include everything from pet lovers to do-it-yourselfers, TV comedy fans and users with an interest in news and politics.
But they can’t cover everything. You may have a product or service that doesn’t dovetail with existing segments — here, custom affinity audiences can help.
Understanding Custom Affinity Audiences
Custom affinity audiences are those you create yourself in your Google Ads platform to align with the interests of your target customer base. While Google will suggest different potential segment tags depending on what you input, it’s worth taking the time to do some market research before diving into the custom affinity process. This lets you pinpoint the audience preferences that align best with your brand.
You can create custom affinity audiences related to four criteria: Interests, URLs, places, or applications. In general, places and applications are the least useful of the bunch. Here’s why. In our coffee example above, there aren’t a lot of coffee-related applications that would set your audience apart. And while geography has some impact on buying behavior, it’s usually not enough to justify an entire segment.
Interests and URLs, meanwhile, can help you dig down and identify potential affinity options that may be shared by your target market at large.
How to Create Affinity Audiences
Ready to create your own affinity audience? Follow these steps:
- Log into your Google Ads account.
- Select “Tools and Settings”, then “Audience manager.”
- Select “Custom Segments.”
- Enter segment name and interests.
- Save your new segment.
Let’s tackle each step in more detail.
1. Log Into Your Google Ads Account
First, log into your Google Ads account. Here, you can see any active campaigns along with the associated affinity audiences.
2. Select “Tools and Settings”, then “Audience Manager”
Next, head to “tools and settings” in the upper-right-hand corner and then find “Audience manager” in the drop-down menu.
3. Select “Custom Segments”
Now you’ll see a list of any data segments you’re currently using to target prospective buyers. To create an audience or segment, click on “Custom Segments” and then the blue “+” icon.
4. Enter Segment Name and Interests
Now, give your segment a name and add a few potential interests. For example, if you enter “coffee”, Google will return interests or purchase intention ideas such as “coffees to make with an espresso machine”, “how to make coffee with coffee beans” and “coffee makers that make different coffees.”
5. Save Your New Segment
Finally, save your new segment with use for ad campaigns. You can create as many segments as you like until you’ve covered all relevant market bases.
The Impact of Effective Affinity Audiences
Ideally, affinity audiences lead to a definitive result: Increased ROI.
Here’s why: When your ads are shown to audiences that are interested in what you’re selling, they’re more likely to click through and purchase your products. As a result, the money you spend on advertising is directly offset by the conversions driven by these ads, in turn creating positive ROI. More generic campaigns, meanwhile, may still increase overall sales but not enough to balance out the spend required to reach larger audiences.
The right audience makes all the difference. Targeted, customized affinity audiences help you reach the people that want to buy your products, in turn boosting conversions and making your overall ad spend more cost-effective. Custom affinity audiences further narrow your market targeting, increasing the likelihood of revenue and reducing the gap between what you spend on ads and what you get in return.
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