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E-Commerce Trends The Advertising War of Amazon, Secure Your Own Secret Weapon!

Registration dateFEB 10, 2022

The Advertising War of Amazon, Secure Your Own Secret Weapon! The Advertising War of Amazon, Secure Your Own Secret Weapon!

According to Amazon’s Q2 2021 earnings report, the sales in the second quarter of this year recorded $113.1 billion, a 27% increase over the previous year.[1]Although the explosive growth trend of the global e-commerce market, which was triggered by the COVID-19 pandemic, has entered a stabilization stage, Amazon’s sales have exceeded $100 billion for three consecutive quarters, solidifying its position as the world’s largest e-commerce company in name and reality. Growing Pressure on Sellers amid Fierce Amazon Advertising Competition However, comparing quarterly sales growth, the sales growth in second quarter, which increased by 27% compared to the previous year, showed a relatively large decrease compared to the first quarter, which recorded a growth rate of 43.8% compared to the previous year.
Even under this circumstance, the sales of Amazon’s advertising business continued to rise, recording a growth rate of 87.5% compared to the previous quarter, higher than in the first quarter.[2]

Yet, this high growing trend in Amazon’s advertising business will not sound pleasant to most incumbent Amazon sellers. This is due to the growth of Amazon advertising sales means that the competition between sellers, who fiercely contend to occupy the single goal of ‘best exposure’ with ammunition of ‘advertising budget’ in the battlefield of the Amazon marketplace, is intensifying.

In effect, according to ‘Marketplace Pulse,’ the average cost per click for Amazon search ads was $1.20 in June 2021, an increase of 34% compared to the previous year. In addition, the ‘ACOS’ figure, which shows the ratio of advertising expenses to sales revenue, also increased from an average of 22% in 2020 to 30% as of June 2021.[3][3]

[Average Cost-per-Click Advertising Cost Trend of Amazon][4] (Source : Marketplace Pulse)
In this situation, many Amazon sellers are doing their best to extract keywords for advertisements, optimize advertisement costs, and strive to maximize the exposure of their products and brands within a limited budget. For products that have not accumulated consumer purchasing history and reviews in the early stages of entering Amazon, in the case of products that have already entered the market, they are struggling to maintain stable sales volume and survive from new competitors to increase organic ranking of products. However, the reality is that when a large competitor with an aggressive advertising strategy based on a large budget appears, they have no choice but to give up their position easily.

Eventually, are maximizing product exposure on Amazon and getting a better advertising account the only ways to invest in more advertising budget at the cost of more money?

Fortunately, Amazon now offers features that allow sellers to enjoy highly efficient advertising effectiveness without spending extra budget. Today, I would like to share in detail the introduction and use of the Amazon Posts feature, which kills two birds with one stone: reducing advertising costs and maximizing exposures for sellers.
Instagram for Amazon! Amazon Posts! (Source : Amazon ads)
‘Amazon Posts’ feature, which is currently provided free or charge, is a marketing program that can expose a post consisting of a lifestyle image of a product and a short caption to a variety of consumers on Amazon. Sellers can maximize the exposure of their products at no additional cost, and consumers can have a more intuitive indirect purchasing experience through a concise core description of the product and lifestyle image. This feature, which is currently being provided as a beta version for mobile users, can be used by anyone with a seller account that has opened a store with a brand registry completed in Amazon U.S. Why You Should Start Amazon Posts The advantages of Amazon Posts, which can be easily advertised with lifestyle images and sensible captions are as follows.
  1. 01Free to Use

    Unlike Pay-per-Click (PPC) advertising, which is a pay-per-click method, Amazon Posts does not incur any charges for inflows to product pages. Sellers can freely post posts without any restrictions, enjoy free publicity, and maximize sales.

  2. 02Easy to Brand

    A post with a sense of unity makes it easier for consumers to understand the identity of the brand. Through branding, you can go beyond simply consuming a product to consume a brand as a loyal customer.

  3. 03Increase Brand Awareness

    Consumers’ interest in the main product group of a specific brand can be extended to even the non-mainstream product group of the same brand. Sellers will be able to market various product groups by attracting consumers to the brand store through ‘Amazon Posts.’

  4. 04Expose your Products on Competitor’s Product Pages

    Amazon Posts also appear in ‘Related Posts,’ located at the top of the ‘Customer Question’ section of the competing product detail page. With just one great picture and phrase, you can steal your competitors’ traffic and consumers.

  5. 05Acquire Brand Followers

    Consumers can see posts they like and follow brands. Sellers can expand customer touchpoints by sending marketing emails to their followers.

  6. 06Check Marketing Performance

    For each individual post, Amazon provides data such as impressions, post clicks, flow to detail pages, and brand feed flow. It is possible to maximize the effect by identifying the commonalities of the posts that had good effects and applying them to post uploads in the future.

  7. 07Possibility of Changing to a Paid Service

    Considering that the ‘Vine’ program, which provides products to reviewers and secures reviews, has recently been converted to a paid service, it is highly likely that ‘Amazon Posts’ will also be converted to a paid service someday. So, now is the right time to start ‘Amazon Posts’ as soon as possible, because there are relatively few competitors, and it is available for free.

How to Create Posts and Recommendations for Amazon Posts Sellers can create a post simply by uploading a lifestyle image of the product, writing caption text, and entering an Amazon Standard Item Number (ASIN). Amazon automatically matches the ASIN written in the post and assigns a category tag.
[Create Post Window of Amazon Posts][5] (Source : Amazon Posts Page)
The image type recommended by Amazon is not an image in which the product is displayed on a white background, which is often expressed as ‘Remove Backgrounds,’ but a lifestyle image in which the product is used in daily life. High-quality and high-resolution images are recommended, but if the quality is comparable to that of a smartphone camera, then there is no problem in passing the approval process. Also, it is recommended to write the key elements of the product and the brand history simply and clearly rather than detailing the specification elements of the product when writing the caption. Posts that do not meet these requirements may be restricted in exposure and will be ignored by consumers, so bear in mind when creating posts. Exposure Location of Amazon Posts When a seller uploads an Amazon post, Amazon consumers come across the post in a total of 3 areas.
First is the brand feed of the company. The brand feed is a collection of all posts uploaded by sellers, and consumers can understand all product groups and brand images of the brand at a glance.
Second is the category feed. As described above, Amazon automatically assigns categories related to products to individual posts. Customers can come across the company’s posts while searching for products to purchase within a specific category.
Finally, the company’s post is exposed on the competitor’s products detail page. It has a huge advantage in that it can attract customers from your competitor’s listings.
[Amazon Posts’ Location of Exposure][6] (Source : Amazon Advertising Page)
Amazon Posts to Reduce Advertising Costs, and Cello Square to Reduce Logistics Costs! In conclusion, ‘Amazon Posts’ is a program that can increase product exposure and attract potential buyers to your product page without additional cost. Also, it is a program that can increase loyal customers by securing followers through steady posts and enhance the brand image by increasing the purchasing experience of consumers through lifestyle images. Especially, sellers can send e-mails to directly promote products to followers obtained through posts. This is a huge plus given that it is the only way for sellers to send product promotion emails directly to consumers.

Reducing operating costs in Amazon selling leads to price competitiveness that is directly related to the success of a product. Running an Amazon business has unavoidable spending factors that are outside the seller’s control, such as selling on Amazon sales fees, FBA fees, and monthly subscription fees. However, ‘advertising’ and ‘logistics’ are areas in which the effectiveness of sellers is greatly affected by the seller’s knowledge, information, and experience. In the case of advertisements, through optimized advertising keywords that can clearly target potential consumers of my products and Amazon Posts introduced today, it is possible to derive completely different product exposure and sales results at the same cost.

In the case of logistics, by selecting a logistics company that provides logistics services optimized for e-commerce at reasonable prices, it is possible to reduce costs, secure logistics stability, and ultimately maximize profitability.
Product, marketing, and logistics are key to selling successfully on Amazon.
If you caught an advertisement through Amazon Posts, now only logistics need to be managed through an efficient forwarding service.

Samsung SDS digital forwarding service, Cello Square, is a digital forwarding service and has global logistics execution capabilities based on 37 countries, 58 bases, and 230 sites around the world. Based on large-scale logistics and strategic partnerships, we secure cargo and provide logistics services at reasonable rates. In addition, a dedicated logistics manager for each customer is assigned to provide support for logistics level diagnosis, consulting, strategy establishment, and operation optimized for each customer’s situation. It is based on a loading optimization service applied with AI technology and a safe transportation service for sensitive cargo using IoT technology and is creating a reliable logistics environment through blockchain technology. From IT-specialized services to packaging box recommendations, logistics costs can be reduced through cost-efficiency.
How about reducing operating costs and achieving successful Amazon business through logistics optimization with Cello Square? References [1] Announces Second Quarter Results
[2] Announces Second Quarter Results, Supplemental Financial Information and Business Metrics – Other
[3] Amazon Ads are getting more expensive, Marketplace Pulse
[4] Average Cost-per-Click of Amazon Ads in the U.S., Marketplace Pulse
[5] Amazon Posts Page
[6] Amazon Advertising page

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Kontactic, Kontactic is Korea's first and foremost Amazon consulting firm specializing in helping Korean companies become successful Amazon sellersKontactic, Kontactic is Korea's first and foremost Amazon consulting firm specializing in helping Korean companies become successful Amazon sellers