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Leverage the right mix of keywords and product targeting to increase your ROAS on Amazon

Kennedell Amoo-Gottfried
April 5, 2022
September 16, 2022
Leverage the right mix of keywords and product targeting to increase your ROAS on Amazon

When you think about targeting ads on Amazon, chances are you are thinking about keywords. It makes sense because the vast majority of activity comes from keyword searches. After all, the name of the game is to predict what customers type into the search bar. 

Product targeting, on the other hand, involves specifically targeting certain products, brands or categories where you want your ad to show up. 

Keywords are clearly the more popular option because they are likely to reach the largest audience, as it will serve impressions across search page results and product detail pages, while product targeting will only serve impressions on product detail pages. 

This does not at all make product targeting pointless - there is plenty of room to go after products and a top-flight marketing strategy will have elements of both campaign types to maximize exposure, as each serve their purpose.

Ultimately, the goal is not just to make the most sales, but to do so while minimising ad spend. On top of the increased ability to cover your bases in terms of broad and granular targeting with a mix of the two, it will also allow you to achieve better return on ad spend (ROAS). 

Product Targeting

As mentioned, product targeting lets you go after specific products, brands, or categories when carrying out Sponsored Products campaigns. Unlike keywords, this is a slightly more personalized approach that focuses less on search results and more on when shoppers are looking through categories or on the targeted product detail pages. 

This allows you to play around with going after brands or products that are perhaps inferior to yours, giving shoppers a better option and siphoning them away from competitors. On the flipside, you can also deploy negative targets for products that are either irrelevant (and would therefore pose an inefficient allocation) or those high-performing products you feel might present a better buying proposition than you are offering. 

In addition to the broad instruction, you can also refine it by targeting specific price ranges, review star ratings and even eligibility for Prime. 

The thing to keep in mind here is to always look better than what you are targeting. If you are targeting star ratings - go after the ones with fewer stars than your product, if you target by price range - offer a more competitive price, etc. 

Going after your competitors’ weak spots is not the only benefit of product targeting. You can also use it defensively, taking up space on your own product detail pages - where competitors might otherwise stake their own claim - and use it to place more premium products to upsell or complementary products to cross-sell. 

The campaigns also come with reports that help you assess where the campaign is succeeding and where it needs work, letting you fine tune where you spend more money on the next go around.

When used with Sponsored Display ads - which is itself the least used of the ad formats relative to Sponsored Products or Sponsored Brands - product targeting can be particularly effective in reaching repeat customers or those that are already prone to viewing your ASINs or those in a similar category. 

Keyword Targeting

The classic, obvious one. Keywords let you zone in on terms you think shoppers will search for, making it a great tool to reach people. 

You can choose broad terms, phrase match or an exact match, depending on how granular you want to run your campaign. There are multiple ways to research the most effective keywords for your campaign, and to structure your campaigns to make them more efficient.

Because they tend to reach a larger audience, keywords also tend to be far more competitive in terms of cost-per-click, driving up the ad spend. The flip side is that sales also tend to be higher in absolute terms.

How do I determine the right balance?

The first thing to note is that there should be one - yes, keywords are more scalable, but the range of use cases of product targeting is such that there is a high likelihood it will help your advertising strategy in some form.

It will mean, however, that the vast majority of ad spend should be allocated to keywords - as they do the heavy lifting and can be automated to a large degree (within reasonable limits!) - and the product targeting needs a bit more thought and tactical consideration behind it. 

Despite keywords casting a wider net, though, product targeting ends up having a far higher pound-for-pound ROAS due to the cost-per-click being lower, which you will have to balance with your overall sales goals when determining a balance. 

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