10. A Quick Guide to Paid Marketing on Amazon and Flipkart
- Arindam Paul Founding Member and CBO, Atomberg
Many founders ask me why should they even list on marketplaces. In most cases, marketplaces are a more profitable channel than others for most brands across most categories because you already have an existing customer base; you don’t have to pay repeatedly to acquire customers there.
Also, the marketplace commissions are usually so low that they can never reach up to CAC (customer acquisition cost) you would have to spend on acquiring new consumers from scratch.
Let’s say, for example, a user needs a fan. They would not go to Atomberg.com to buy one, for instance. They will search on Amazon for a fan if they’re not looking specifically for your brand. People specifically looking for your brand might come to you organically, but that number, as you scale, will be increasingly low.
The skew towards marketplaces will always be there. If a user doesn't know what to purchase or which brand to purchase, they would go to a marketplace and search for the category rather than visit ten different websites trying to research different products.
This is why you have to be on board to selling on multiple channels.
The next mistake I see quite a few brands make is having different pricing on their website and marketplace listings.
Having the same product sold at different prices through different outlets is bad because the customer will lose trust in the product.
For example, you’ll find the same price everywhere when you buy an iPhone. This would only change across channels for cheap brands.
Any brand that is strong enough to stand on its own would always keep the same price across all outlets. A small change of 2% to 4% here and there is fine, but the price has to stay the same if the product is the same.
Your biggest conversion lever in a horizontal marketplace is your listing. This is everything.
You need to have an excellent listing. You need to communicate exactly what you are going to deliver. You shouldn’t offer too much or too little. You should say exactly what the product will do and how it will do it. This will show up in the reviews.
More than half of the brands say too much about what their products do, which is why the reviews don't work. It is important to let people know exactly what the product does. You can’t game the reviews.
For example, if you say that your fan doesn’t make any noise when it really does, people will find out the truth and give you bad reviews.
When it comes to paid marketing on these marketplaces, in the case of Amazon, everything depends on the Amazon’s A10 algorithm which is their own proprietary search algorithm. This includes advertisements both on and off the site and user reviews and ratings.
To begin, you’ll need a flawless advertisement with all of the proper details included. Since neither the page nor the brand are yet well-known, organic discovery will be low initially.
Because Amazon has a significant number of searches and a high-intent audience, advertising on Amazon is a terrific approach to get new visitors to your site.
You may also boost traffic and sales on Amazon using off-platform strategies like Google/Facebook advertisements and influencer marketing.
It’s possible that paid traffic conversion rates will be modest at first, but as sales of the SKU grow, the quality of ratings and reviews will rise, and the effectiveness of the advertisements will decrease.
However, there’s one caveat here.
The only thing to track here is your brand searches that happen on both platforms. If your brand searches are increasing, that means whatever you are doing off platform that is working for you.
It’s a mistake to try to measure conversions that happen from Google and Facebook ads on Amazon. That cannot happen.
The different types of Amazon PPC (pay per click) Ads are Sponsored Product Ads, Sponsored Brand Ads, and Sponsored Display Ads.
Start with small budgets. Launch a Sponsored Product campaign with auto-targeting (where Amazon’s algorithm does relevant ad placement for you) and let it run for a few weeks.
Run the search term report for the campaign and segregate the converting keywords into three buckets and launch three manual campaigns: generic keywords, brand keywords, and competition keywords.
Optimise and scale the campaigns by regularly monitoring high-performing and low-performing keywords, and scale them by allocating more budget or improving the bid.
Keep adding keywords regularly based on auto-campaign results and your own category understanding. Once you reach a certain scale, introduce Sponsored Brands and Sponsored Display Ads into the mix.
This is slightly different for Flipkart.
Flipkart is like a contemporary trade store where you explore shelves rather than asking the shopkeeper to show you a category. Because it’s browse-led, display advertisements matter as much as search ads.