#115 - 5 Advertising Strategies for Competitive CPG Categories on Amazon

#115 - 5 Advertising Strategies for Competitive CPG Categories on Amazon Speaker 1: Without a doubt, the toughest category to grow in on Amazon is consumer packaged goods. Speaker 2: We're talking supplements, drinks, snacks, anything you consume that needs to be replenished. Speaker 1: We're going to give you five critical advertising strategies that you need to succeed in the CPG space on Amazon. Speaker 2: Alexa, play that Amazon Ads Podcast. Unknown Speaker: Which one would you like to hear? Speaker 2: The best one. Unknown Speaker: Okay, now playing that Amazon ads podcast. These gentlemen are completely changing the game. Speaker 1: After listening to that Amazon ads podcast, my ads are finally profitable. Unknown Speaker: I also heard they're pretty cute. Speaker 2: All right, Andrew. Number one, the LTV. Absolutely critical for understanding what your actual target ACOS should be. Break this down for us. Speaker 1: Yeah. So understanding your LTV is going to be one of the most important things for a product that's being sold to a customer multiple times. Products that people tend to come back and buy again. And when it comes to calculating what your target ACOS should be, it needs to include the And today I want to talk to you about the repeat purchase behavior of that customer whenever they initially purchase because the CPCs, the whatever is all very competitive within these different categories. So naturally you're going to have to pay a little bit more to acquire those sales. So it's important to understand what one sale actually equates to over a longer timeframe, six month, 12 month timeframe. If just acquiring that one customer leads to two or three multiple sales, On aggregate over a longer period of time is much higher. Speaker 2: Yeah. Typically when people are talking about their break-even ACOS, they are meaning for one order, one sale, how much of that sales price is actually profit for them. So after shipping fees, cost of production, Amazon fees, all these things, what's left over, probably 20 to 30%, sometimes 40% is usually an average for an Amazon seller. But when it comes to products that are frequently have repeat purchases, then if you get one new order, but within 30 days, you're expecting a second order because maybe it's a 30 day supply. So within 30 days, someone's going to buy that product again. Well, now your breakeven A costs has essentially doubled because if you get one new order, you're actually getting two orders. The second order just being further down the line. So in those cases, For LTV, lifetime value of the customer, what you need to look at is the average number of orders per customer. And then however many orders that is on average, maybe it's two, maybe it's three, maybe it's four average orders per customer. Guess what? Your breakeven ACOS now needs to be multiplied by two, three, four, however many times the average number of orders is. And why you need to do this is because every other seller that's competing against you is already doing that. So, you know, if you're trying to sell a supplement, let's just say, let's say you're selling, I got here L-L-theanine, just a random one example. How many is this? 60 soft gels. Okay, so that's like, I guess, a two-month supply if you're taking one a day. I don't, but I take five a day because I'm crazy. Just kidding. No, I don't. That will probably last me a few months, six months maybe. But point being, let's say you are, what is this brand, Sports Research, and you're looking at this product and you're seeing that the average number of orders for a customer is, let's say, it's three per year or something like that, three to four per year. So that now means that in order for you to be profitable, if you're trying to target a 30% ACOS on this, and I don't know, let's say the product sells for 20 bucks or whatever. Then your CPCs are naturally going to be kind of low to try to manage that 30% A cost. You might be bidding around, you know, 80 cents to a dollar, kind of depending on how strong those conversion rates are. Your competition is likely being smarter than you and saying, hey, we're going to increase our bids to $2, $3 because we might lose money on that first sale, but we're going to make money on the second and third and fourth sale. So that is how all of the competition is thinking. And so just in order to keep up with them, you really need to, at a bare minimum, double your target A cost from what your break-even is on a single unit. Speaker 1: Yeah, really well said. Now, what types of tools and how should people actually track the LTV? Because it can be a little bit difficult. I mean, first thing that comes to mind is Amazon has, in brand analytics for sellers, they have the customer loyalty analytics dashboard. Now, this is In my opinion, relatively limited with the way that Amazon is calculating things. Sometimes it's not always 100% accurate, but this is one place you can go. To start understanding the repeat purchase behavior of your account of your individual products. Now, Amazon doesn't let you drill down into the actual products. It kind of rolls everything up into a brand level view. So if you have a bunch of different supplements that you're selling or whatever it is that you're selling, you're not going to be able to drill down into those product level LTV metrics. So it's a little limited and the way they do the look back windows in the reporting ranges is a little bit wonky, but There are other tools out there and other resources that you can use to start tracking LTV. Amazon Marketing Cloud being one of those where it allows you to look at the repeat purchase behavior of customers overall at a longer time frame, up to five years of look back window. So that's super helpful for pulling those queries. If you haven't watched our intro to Amazon Marketing Cloud episode, go back and check that one out. I don't remember which episode it was. I think it's 110, but that one really dives into how to use Amazon Marketing Cloud to track these behaviors of your customers. Resources like with one of the clients that I work with, they partnered with a data partner that's pulling in all the data and we're able to actually see the customer acquisition cost and lifetime value on individual products. And this is something that we're regularly reporting on. So that way we can see, you know, as we modulate spend throughout different times of the year, what the impact on that same month and those customers is on a certain product by product basis, we can allocate budgets according to where we're seeing higher lifetime value and making sure that we're going after, you know, and acquiring new customers. Speaker 2: So I've got a couple of screenshots here for a client in the supplement space that I'm currently managing. And this first screenshot, and by the way, so you can, you can navigate to this. Like Andrew said, you go into brand analytics in seller central. Once you're in brand analytics, look for the customer loyalty analytics tab. And then from there, you can select a month, a year, et cetera, and dive into these things. So for this first screenshot, this is showing the month of August. We are recording this in September. So this was just last month. And down here in this section is where you can see the repeat customers, which This is only saying how many people repeated the purchase within the month of August. So very narrow, especially if you do have a product that is supposed to last you for more than a month. You're not really expecting that person to buy another one within that same month. So in this case, only 73 of our customers were actually repeat purchases within that same month, which means it's a very low repeat rate, meaning out of all of our customers, three and a half percent, 3.6% of all of our customers bought twice In that same month, when they did buy twice within the same month, the average interval was, it took them about seven days to make that purchase. So within a week, they bought a second product. We don't know if it was the same product or a different product. Do we, Andrew? Speaker 1: No. So it's not necessarily just repeat purchases of the same product. It could be any product within the brand's catalog that the customer purchased. Speaker 2: Okay. Yeah. And then you see the number of orders. So again, this is not the timeframe you want to look at, right? In a second, I'm going to show you a better timeframe, but 106 orders, total orders from 73 customers who had purchased from us before and are purchasing again. So that's an average of like about one and a half orders per customer. And within seven days they buy A second product from the brand could be the same product. Maybe they were like, this is great. I'm going to buy this for a relative or whatever, or they just really liked the brand. And they're like, I'm going to buy something else from this brand. What's a better one is this screenshot here, which is showing the whole of 2024. Now we're in 2025 and have had a ton of growth. This year, so 2024 isn't the most accurate. We really want to have like probably longer time frames in 2025. We can't pull in the yearly data yet. So I could pull in like the quarterly data for the last two quarters. But looking at last year's data is still going to be a pretty good proxy where we're seeing in this case 5000 repeat purchases about 50% of the total of our total audience. Purchased was a repeat purchaser and that average time frame of around 68 days. So a little over two months is going to be some very good Intel and you're seeing the number of orders. There is 15,000, which is basically three times the actual number of customers. So it's safe to say that when you do get that repeat purchasing audience, you're going to be averaging around three times as many orders relative to just that one order. It's just going to take, for all of those to actualize, it's going to take 68 days for that second order, another 68 days for that third order. You can do the math, figure this out for your total audience across my entire audience. If this is 50% of my audience, then you got to cut those metrics in half. So instead of three orders, it's one and a half orders on average. So you get the idea. You can calculate it out, but Like Andrew was saying, the Amazon data is not as great. If you have your own website, And you're having people sign in or create an account to purchase from your website, or at least they're using their email address, whatever, you're gonna have much better analytics, because you can actually see how many customers, like you can see on an individual customer level and aggregate that and do analytics, et cetera, to figure out truly what that LTV is. But the bottom line is that you absolutely need to calculate this LTV, this expected LTV for a new-to-brand shopper, and get that intel, because that will determine everything. When it comes to your target ACoS on Amazon PPC. Let's dive into the second critical advertising strategy. Speaker 1: Now this transitions perfectly into number two, which is optimizing for new to brand. New to brand customers are going to be your most important secondary KPI. So your second most important KPI outside of your LTV. Speaker 2: To define it really quick, Obviously, what is the most important metric? It's gonna be profit, right? Like, it's gonna be profit, it's gonna be A cost, it's gonna be margin, those types of things. Secondary metrics are things like, you know, impressions. Is that, you know, some vanity metrics and everything like that. So, that's where we're coming here. Of all the possible secondary KPIs, new to brand. Keep going, Andrew. Speaker 1: Yeah, so there's a lot of different ways that you can optimize for new to brand purchases. Putting your product in front of people who have never seen your product before, never purchased from you before. First thing that comes to mind is how much spend you have going towards non-branded keywords. So people who are still in a consideration mindset, just browsing, looking at searches that aren't defined by a specific brand. That's naturally going to put you in front of people who aren't searching for a very specific brand and likely have not purchased. We've seen higher new-to-brand customer acquisition rates when spending more on non-brand. Now, Amazon gave us Some new targeting capabilities over the last couple of months within sponsored products and sponsored brands where you can actually apply a audience bid boost for people who have never purchased from the brand before are considered new to brand. It's a prebuilt default within sponsored brands where you can just quickly go in and add that. bid boost or bid multiplier to your sponsored brand campaigns. For sponsored products, they have some pre-built audiences within them, but they don't have the new-to-brand audience by default. So you have to have AMC in order to be able to go in and create a new-to-brand audience, which you could then push to your AMS console and then you can add those to your sponsored product campaigns. And that's just going to allow you to be more aggressive on those audiences where they haven't purchased from you before, where you're more interested in going after and capturing that customer because you understand the long-term value of the customer itself. Speaker 2: Yeah. And when, if you're a longtime follower of this podcast, like you've been with us since, you know, The first few episodes dropped over two years ago. Then back then, Andrew and I were always speaking cryptically about this large account we were managing, but I think we can disclose some information now. So we used to work with this brand. We used to work for this agency called Edelman, and we worked with it. We were managing this account called Melissa and Doug, which is a large toy brand. And when we were with that client, they have extremely strong loyalty. In the toy category, I think they are the number one, like highest loyalty. Like even the Amazon reps were like, this is crazy. We haven't seen this level of loyalty with any brand. And it's because Melissa and Doug, they just, they make really good products, their mission statement, which is kind of like screen-free toys. A lot of toys that are just built around pretend play, imagination, a lot of stuff with wood. So it's premium products. But once people discover it, they love it. They buy more of it. So the client really wanted us to push new to brands. That was the goal to grow the sales. We need new to brand audiences. So we would have a sponsored brand ad that was like, you know, single keyword campaign, just bidding on toys for toddlers. And What was crazy was bidding on such a upper funnel keyword, only 30% of the orders on that brand campaign were new to brand. And we realized the reason why that is, is because Amazon will tailor the search results to each specific shopper. So if someone has purchased from Melissa and Doug before, when they're typing in toys for toddlers, Amazon is going to prefer, they're gonna tailor that shopping experience towards that customer. To show them familiar brands. So we, so I think it was even pretty similar, like even on the brand defense campaign, depending on Melissa and Doug, I think still like, uh, around 20% of those were still new to brand. Like people who, you know, had never bought from Melissa and Doug or, or at least not within the last year, like they were familiar with it. So they're shopping for it. So like only 20% of those orders were new to brand. We have a fully, Focused on Nudibrand campaign, that was only 30%. Now, we did not have these options to increase for Nudibrand back in the day. I wish we did because what we would have done is set up those dedicated campaigns that were supposed to be focused on Nudibrand. We would have set really low base bids and then just put a massive increase on Nudibrand to try to target exclusively Nudibrand shoppers. Uh, because that would just be, I mean, that's the goal of those campaigns was to capture new brands. So we don't want to spend anywhere else on anything else. So I wish we could go back in time and do that. But, um, you know, that is now a strategy that you can do. And, uh, on that episode around AMC, Andrew was showing you guys with one of the accounts he's managing about how you can So use this strategy and pull that into the sponsored product campaigns because that's going to be a lot more value a lot of times just because of like the volume that those campaigns get. So trying to increase those bids for new to brand audiences with the help of AMC will be huge. Go check out that episode if you haven't. Speaker 1: Yeah, that's a very effective strategy. Having those dedicated campaigns that are just strictly going after net new customers. With those low base bids and high multipliers, very effective strategy. Let's move on to number three. Speaker 2: Andrew, this one is perhaps the most underrated strategy of just fix the listing, right? It is amazing how many people would rather invest tens of thousands, even hundreds of thousands of dollars over the course of several months Not to mention dozens and dozens of man hours trying to come up with some PPC strategy that they think is going to unlock this key to success. And they're asking us, like, I've tried everything. I've tried single keyword campaigns. I've tried ranking campaigns. I've tried top of search only campaigns, new to brand only campaigns. And it's like, whatever I do, like I just, I can't get any visibility You know, without putting my bid to $5 and I can't afford that. And then, you know, we look at the listing and it's just a garbage product with garbage images and garbage reviews. And it's just like, dude, no PPC strategy is going to help you. Now, a lot of you listening are probably laughing and being like, man, those guys are idiots. You got to go look at your listing first. Cause like, we're probably talking about you. Sorry. We're not like, not all of you, but Probably most of you do have some significant improvements. It's not like absolutely garbage products, but you probably do need some serious work. Look at the top performers. Look at why they are outperforming you. Is it because of pricing? Is it because of images? Is it because of reviews? A lot of times it's going to come down to those reviews. And so realistically, To compete in these really competitive categories, especially with these, you know, with these CPG kind of verticals, you're going to need at least, at least, And today we're gonna talk about a 20% conversion rate in order to just keep up with competition and to be able to afford those CPCs. Speaker 1: Yeah, it's crazy how many people neglect this. It's foundational. Ultimately, all of your PPC is pointing back towards your product detail page and ensuring that that is your ad. That's what you're driving traffic to. And if it's not optimized, you're not gonna be able to compete with these big CPG brands whose listings are rock solid. The creative they put out is robust. Comprehensive and there's no gaps in a lot of these big big categories. So you have to be top-notch. You need to be using great infographics, great main images. You know, main image hacks and split tests alone aren't necessarily going to cut it or move the needle. Sometimes they do, but it's not going to be the thing that fixes your conversion rate immediately or even your click-through rate at times. So, you know, you just really got to make sure that that listing is completely buttoned up. You're leveraging all the different aspects of the PDP that you can and ultimately trying to just raise the overall conversion rate. And it takes time. A lot of these big companies have been around for a long time. The products have been established on Amazon. They have a lot of reviews. It's very tough and very difficult to compete with someone who has such a long history on the Amazon platform. So just making sure that listing is Airtight is absolutely crucial. Speaker 2: Perfect. The listing needs to be perfect. Every single component that goes into a listing needs to be A+. And again, a lot of that time, it's going to come down to just the reviews. That goes a long way on Amazon. So do whatever it's going to take to get those reviews, giveaways, whatever. Vine reviews, you need to get an established review count up and you need to have really high reviews. I've also had a lot of people who are like, I don't like Vine because I do Vine and like I get a bunch of one star reviews. I'm like, okay, well then maybe the product is just bad and you actually need to just make a better product. Like you need to have a good product first and foremost. So you just like you need to have a good product. We're going to come back to this in point number five. So I'm not gonna get into it right now, but you need to have a good product and then you need to have a really good listing and really good reviews. And to understand if you are there or not, you need that 20% conversion rate. As long as you're below that, You know, PPC is not going to help you. You need to get to a 20% conversion rate on that listing before we can actually talk more about the PPC strategies to help get that growth. So let's dive into one other thing. Speaker 1: One other thing. One other thing. Speaker 2: Cue the talking. Speaker 1: One final thing. Now, I think that's a really good point around conversion rate needing to be greater than 20%. It's going to need to. It's very competitive, but one thing you can do is artificially Inflate the conversion rate with a new product launch. Now, one of the supplement brands that I work with does this with any new product that we're launching. They have a service. You can look it up on Google. And just search and find some giveaway services where you can actually pick specific keywords that you want to give away products under. People will go to Amazon and purchase it. Is it above board? I don't know. But if you're in the Discord group, I'll share with you what the actual service is. The link should be down in the description below. So make sure you get in there. I'll share what it is, but you can artificially inflate the conversion rate of a product at launch to get your ranking up. And you ramp up your PPC in tandem, you're going to get naturally reviews and that can help with any launch with kind of getting up into the search result pages, actually seeing some, some traction and start generating some, some organic growth as well. So that's something I've seen work really well in these categories. All right. Speaker 2: You're done trying to take this up the spotlight. Speaker 1: I'm done. All right. Number four. Speaker 2: Point number four. All right. This one's a pretty big topic, probably worthy of a full episode of its own, but Trying to build that brand awareness, that upper funnel. A lot of times you're gonna, if you are in this category, if you have a good product, you're doing well, you're ranking well in all of these keywords, that's only gonna take you so far. Search is meant to capture demand for that product, right? When people are searching for something, trying to buy it, that's demand. Searches to help you capture that demand. Once you've fully kind of tapped that stage of the funnel, the only way to grow it is to build demand. And that's why they have things called DSP, the demand side platform. Actually, I don't think that's quite the right demand, but that's how I, sometimes I like to think of it that way where it's, you're trying to build demand for your brand and product. I think technically the demand side is you're demanding ad space because then there's the supply side, but anyways, that's to be very, very technical. Don't use DSP. That's what we're actually trying to get to here. So the best and most effective way to really sell the brand, build that awareness is going to be through off Amazon tactics. And we're going to be engaging most of the time with social. So things like Facebook, Instagram, TikTok, those types of ads. So Andrew, what have you seen working in this space? Speaker 1: Yeah. So one thing with working with the supplement brand, they have really leaned into influencer marketing on TikTok, on Instagram, leveraging these influencers to get people talking about the brand. We've seen a very tight correlation between the number of influencers that are posting content about us and the branded search for The brand itself that I'm working with. We've seen very, very tight correlation. As we ramp up influencers, branded search for the product continues to pick up, which is going to help inflate the overall conversion rate anyway. Branded search converts a lot better. But when it comes to running off Amazon upper funnel placements and ads, if you just think about like the supplement space and you know, all the new products that are kind of popping up a lot of times it's best served and if you're trying to do brand awareness, you can use custom creatives, custom videos, you know, curate the ads to influence and reach the right people. The newest brands that are kind of coming onto Amazon and dominating in this space already have that upper funnel brand awareness tactic kind of dialed in for their D2C, but it naturally is going to trickle over to your Amazon account as well. So yeah, I just think of a brand like Javi Coffee. They're really big on social. They don't spend a ton on Amazon. They're still spending obviously, but their investment is primarily off Amazon and it's stimulated a ton of growth to where they're ranking in the top Top spots for the respective categories. So using those other platforms is naturally going to get the word out a little bit more effectively than what you can do with just like a DSP ad where the creative's much more limited. There's less storytelling involved in those creatives and you can't really position the brand as effectively and explain the benefits and features and all that type of stuff in the way that you can with video assets on other platforms. Speaker 2: Yeah, the only thing you gotta kind of bear in mind with this Is that sometimes the videos? And we're here to help you generate demand for the product and not necessarily the brand. So for example, I was on Instagram and I saw, I've seen a few ads for these magnetic gym bags. Have you seen those Andrew? Speaker 1: No, I haven't. Speaker 2: Oh, interesting. Okay. Cause I've seen so many of them. So I was wondering like how, how wide reaching it is, but basically it's just like a gym bag and they're like, don't put your stuff on the floor. That's gross. So there's just like really strong magnets built into it. So you can have your water bottle, your phone keys, whatever in it. And you just like throw it against the squat rack and it just like stays there. So, and then it's kind of convenient. You've got to like bend over to grab the water bottle. So, it's a cool product, right? I decided I wanted it. I don't remember the brand name. I just went on Amazon and just searched for magnetic gym bags and saw like 50 of them, right? So, when it comes to that video creative that you're doing, My goodness, I cannot tell you how important that creative needs to be. And if you're going to be dropping large dollars on your advertising, do not skimp on the video creation. And it's also very important to note for that video ad, A large budget for the video does not mean it's a good video. We had that episode with Luke Melrose that you should definitely go back and watch. I forget the episode number, but we'll throw it up here somewhere. Go watch that one because Luke Melrose dives into the difference between a good video versus a bad video, and it's not just quality of production. Is it high def? Whatever. Is it cool special effects? There's so much more that goes into it. You really need to, whatever you're showing in that video, Here's one more example. This brand that I'm managing in the supplement space, there was some video on TikTok that went viral for one of the supplements that he sells. And what we saw on Amazon is we didn't see any spikes in traffic for any particular brand, but his whole category grew by five to 10X year over year in search volume. And that translated to a massive boost for his sales, just because there was tons of people searching for this product. And you know, he didn't, he didn't do anything on TikTok. So it was, you know, he, he benefited from it. I don't know who made that video, which brand made it and everything like that, but they didn't sell their brand. And so they probably saw a good sales boost, but they just boost the whole category of all the competition with them as well. So you absolutely need really good creative that sells the brand, not the product. And for what it's worth, I'm excited to share with you guys. We shot some commercials for AdLabs. With the help of Luke Melrose. And we're going to drop those in the next couple of months when they finish their editing. But you'll see what we mean. When you watch our videos that we made, it is probably going to be the best Amazon services ad you've ever seen. Just like from every, the way in which we did it, because we knew it needs to be good because you can either have, you can either have like a decent video, like it's not bad, but it's like, it's okay. And you can't hit a profitable ROI on that super upper funnel traffic. So it's like, you're always kind of investing at a loss and the video is now worthless versus if that video is just like 25% better than the decent one. That could be that 25% difference in conversion rate, engagement, click-through, whatever you're measuring, can be the difference between that ad being profitable versus not profitable. If it's a profitable ad, what that now means is you can scale it infinitely versus if you try to skimp on it, you reduce the budget or whatever, or you just don't hire a super good production agency, and it's just not that good of an ad, then it's like you could've dropped 50 grand on this video, but the agency just wasn't good, the video agency wasn't good, And so now you can't scale this campaign because it's just not converting well. So it's when it comes to the upper funnel stuff, it's the hardest audience to reach. But if you can make that audience work for you profitably, then scaling is unlimited. Speaker 1: Yeah. And it doesn't even... Speaker 2: I was gonna say, we'll give you guys an update once they actually run. We'll be sure to let you know if we achieved profitability. Speaker 1: Very excited to see those come together. And yeah, really great points on just generating demand for the product using those videos. I think of like in the modern time of Amazon, like you've got Huberman Labs, which I watch fairly regularly. There's always new research coming out around supplements, around supplementation, and these podcasts that reach like millions of people every single one. Kind of naturally build that demand for products that people have never really heard of. And if you're a brand that's selling this product based on a bunch of, you know, research that's coming out, you're well positioned to capture a lot of that demand, even though it wasn't a video that you necessarily ran or that you promoted or ran ads to or anything like that can happen from, you know, a variety of different places where that demand is actually generated. But just really interesting to see, you know, how things have kind of evolved when it comes to you know, off Amazon platform and how it's impacting things on platform. Speaker 2: Well said, Andrew. Let's go on to our fifth and final point. This is the one that nobody wants to hear, but For a large amount of these CPG sellers on Amazon, you need to just come to grips with reality, step out of denial, and your product just probably isn't going to work. You are too late to the game. The space is too crowded. You don't have enough differentiation between your product or the product isn't good enough. There's there's people who've been here for 1015 years. They've perfected everything. You had an idea just like, oh, man, I think I can make a really good flavor protein. Uh, like, like, I, I got a better chocolate ingredient for protein. If you're trying to start a chocolate protein powder now. You have to have something miraculous about your product, and it would probably not be legal if it was, but that's what you would need to actually step into this space now and try to win against these people that are so much larger than you. So, Andrew, what are some ways in which people can realize if this is going to work for them and if it's just going to take time or not? Speaker 1: Yeah, I think you said it best whenever you mentioned differentiation and positioning of the product. If you don't have something that really sets your brand apart, sets your product apart from all the other infinite number of options that are already out there, then you're basically dead in the water and you need to go back to the drawing board and reformulate or re-strategize how it is you're going to position this product to make it actually compelling to people based on what they're wanting. One of the brands that I work with has been on Amazon for 10 years and they have a very unique differentiation within the product which I've been able to learn a lot about over the years and that's really what has set them apart from all the other noisy competitors and things like that. Anybody and their brother can buy protein powders from, you know, wherever and mix up a formulation, send it into Amazon. That's not what's going to allow you to grow and differentiate. You got to have something very unique and position your product in a way that is sets you apart from the rest of the market. And that becomes more difficult to do when there's so many other sellers, there's so much saturation within these categories. Speaker 2: Yeah. And something else is that if you do have something that's going to differentiate you from the rest of the pack, then you're probably going to really need to grow that audience through those Instagram ads anyways, just because It's really difficult a lot of times to tell just from like the main product image and the search what's actually different about that brand. So I have one example here, which I was on, I was just scrolling through like Instagram reels and I saw this one ad for It was like probably a four minute long ad and I watched the whole thing. I wish I could find that video and we could like show it here, but it was just an ad. It was just some guy just describing the technology behind his safety razor. And I've been using safety razors for like, I don't know, 15 years. And you know, there's like a couple of things I look for is just like, is it heavy? Is it durable? Whatever. And they last a lifetime. So I wasn't really in the market for a new safety razor, but the video they were, they were describing how they do things differently, which is basically changing the angle of the razor and how they clamp it tight. And he was saying, the reason why no one else does this is just because it's extremely difficult and extremely expensive to build it this way. But like it works, it makes a difference. And like, they're proving it. They've got like these microscopic videos showing like how the cuts affect whatever. But, The video itself had like, you know, 50,000 likes on it. Tons of people in the comments that were just like, I got it. I love it. And so I'm instantly seeing a ton of social proof on this video as well. And I just knew something was different about this. So even though it was like an $80 product, the most expensive safety razor I ever bought, I got it. And sure enough, the product was super, it was completely different from anything I've ever used before. And I love it. And Yeah, that's just like if I was just searching for safety razors on Amazon, I probably would not have discovered it. By the way, in case anyone's wondering, it's called Henson Shaving. So if you like safety razors, you can check that product out. But, you know, they were late to the game. They had something different about it. The product was so strong. Everybody loved it. So that's why they were able to succeed. But if you do not have something that is that big of a strong differentiator that really makes you stand out from the pack, that people really love, you're getting praise and adoration from everyone who tries it, then consider a different category. I've just seen too many people for way too long try to make something work with a product that's probably You know, it might be like the 10th best. I mean, that would still be even high. You might be like the 10th best brand in the category, but you know, 80 to 90% of all the sales are going to go to the top two to three brands. And then the rest of it's going to be divided amongst everyone else. So you're getting a very small sliver of a sliver of the sales on Amazon and you're just never going to really be able to grow because you're never going to get that review momentum because you're never going to get the sales needed to get you there. So you're just kind of DOA and should consider finding a different product. Speaker 1: That's such a good example too of just off Amazon. Having such a good impact on Amazon. I mean, a four minute long video, you wouldn't be able to even run that on Amazon as a sponsored brand video. Those can only go to 45 seconds. So you don't even like have the time or attention, I would say people aren't I wouldn't think watching all of those videos on Amazon, necessarily. But you needed that off Amazon placement to kind of get that storytelling all through a four minute long video of all these features, all these benefits, the differentiation, it took that type of placement to actually influence the sale of you going to Amazon buying that thing. And that's such a An interesting thing, too, in a platform where everybody thinks it's a race to the bottom, that you can still position yourself as a premium product and succeed on Amazon. You just have to change the way that you're actually reaching, influencing, and describing and positioning the product. To the consumers themselves. And you know, if it's a good product and things work well, and if there's a big differentiation, then you can potentially afford to occupy that premium price point within categories where everybody's just trying to slash prices or products are commoditized. Speaker 2: Yeah. And the only reason why I mentioned it was a four minute video, I forgot to say, I watched the whole thing. And all the comments were also saying like, this is the first video I've actually watched, or the first ad I've actually watched all the way through. It was just engaging. And I don't know what it was. I sent that video to Luke. I was like, dude, I don't know what it is about this thing. There's nothing necessarily interesting. It was the product that was interesting, really, what it was. It was the founder of the company was just explaining how they made the product. And it was just fascinating. And it engaged everybody and their sales have gone through the roof, I'm sure, just based off of what I've seen. Um, yeah, if you are, if you are already a successful supplement brand and you're launching a brand new product, That's gonna be a lot easier for you as well. Andrew can attest to this. Clients I've worked with, I've seen it myself too. If you already have that brand quality score, whatever you wanna call it, Amazon's going to help you. If you have a history of successfully launching products, Amazon knows you're good for it. So they're gonna naturally promote you, make it a little bit easier to start winning those placements. You're also gonna have a loyal customer base, which is gonna make it really easy to like, in branded search, show off your new products, try to grow that product line. But if you are completely new to Amazon, my advice would be, meaning within the last one or two years, if you just started within the last year or so trying to get a product in the CPG space and that category is competitive, it's not like, oh, I can make a much better product and all the other ones suck, so I can do something better and actually succeed here. That's great if that's the case. But if you're joining some other super competitive vertical, And for the most part, you're just not going to make it. But if you are thinking like you're right on the edge, like I think I can make it, then you've got to do all those tactics that we said before. You've got to fix that listing, make it perfect and multiply that that target ACOS based on your expected LTV. Speaker 1: Yeah. And if you're just getting started in the last year and you're at a three and a half, four star review, You might just want to quit while you're behind. Anyway, if we missed anything, if we left anything out, make sure you leave a comment. Let us know your experience. Make sure you like and subscribe this video and we'll be back next week with another episode of That Amazon Ads Podcast. See you there.