Amazon Business Placements Overview & Strategy

Amazon Business Placements Overview & Strategy Speaker 1: Alexa, play That Amazon Ads Podcast. Unknown Speaker: Which one would you like to hear? Speaker 1: The best one. Unknown Speaker: Okay, now playing that Amazon ads podcast. These gentlemen are completely changing the game. Speaker 2: After listening to that Amazon ads podcast, my ads are finally profitable. Unknown Speaker: I also heard they're pretty cute. Speaker 1: All right, Andrew, you run a business. I run a business. We both also work together on a third business. Have you ever used Welcome to the Business.Amazon.com URL to do your Amazon shopping. Speaker 2: That's a great question, Stephen. And the answer is a very quick no. I'm not, I'm probably not the target audience for utilizing Amazon business because I don't need a whole lot of stuff to do my business. Other types of businesses do that I'm repurchasing or buying things in bulk. All of my work is pretty much done on the internet using different softwares and things like that. So buying physical products and things like that is not something I'm typically doing on Amazon. Speaker 1: You sometimes buy things, like think about it, like for me, the couch in the background. I bought that. That was a business expense for me. I bought that on Amazon. You've probably bought several business items for Nebula PPC. Speaker 2: Yeah, this mouse. Keyboard, the mics, all that. Speaker 1: So we do, we make business purchases on Amazon, but do you use the business, Amazon business specific shopping. Speaker 2: Now, but maybe I should, maybe I should, I don't know. Speaker 1: I'll tell you, you shouldn't. Because back when I was, it was like four years ago, but like when Amazon Business was first kind of coming out, and I was trying to learn more about it. I was trying to see what the shopping experience looked like. And so I, when I went to the Amazon Business site, It said you need to convert your Amazon account to a business account. And if you convert it to a business account, there's no going back. It is a one way door. So you go and you're locked in for life as an Amazon business account, which basically completely changes the search results for you. And I did not like that experience. So I literally had to create a new Amazon account for my business to go back to the normal search page. But essentially what they're trying to do with the business is it's primarily for You know, large businesses, I think the best example is home builders, mainly just because I have a client that is in the home improvement space. And so if there are home builders, like if you are a contractor and you're doing this massive project where you're building, you know, 400 homes in a new development area, and let's face it, Amazon's a great place to buy even for these large purchases. Yes, you could go in person to Lowe's or whatever, but if you're trying to get these big secure deals, When you buy in bulk, you can get nice discounts. And so that's where the Amazon business site comes in. It's usually having some bulk offers or special offers to these large buyers that can come in and find some, I think just like the curation of the inventory is a little bit more tailored towards these large buyers where the stock is good, the inventory is high, you can get some bulk discounts, those types of things. Yeah, that's the only real example I have seen is with this one brand that gets some good B2B sales. But what about you, Andrew? What have you observed just in terms of, yeah, who's actually on this site? Speaker 2: Yeah, good question. Now, I kind of think of, you know, things like janitorial supplies. So if I run like a home cleaning business or something like that, where I'm constantly buying a bunch of Clorox and a bunch of pledge and all these different types of cleaning materials, that'd be something where I might consider having an Amazon business account because I do get, like you said, those bulk discounts. Now, from the seller's point of view and from the seller side of things, You can set up your listing to have specific tiered pricing for businesses looking to buy certain quantities. You can give them a little bit of a discount whenever they're buying things in bulk. So you can set that up on the back end of Seller Central and that would basically be all you need to do and that those pricing discounts only show to the people who are signed up with that Amazon business account. But other than that, I think of doctor's offices maybe like buying. gloves and masks and things like that. But other than that, I don't really have a whole lot of examples or a whole lot of clients really that even have a big B2B audience. I was going through and checking some of my accounts and just seeing how much of our spend was actually going towards these business to business placements and it was rather insignificant for most of them. But I'm sure and I know there are fringe cases where there are sellers who their A big portion of their audience actually is these other businesses and people coming to Amazon trying to buy things in bulk. Speaker 1: Yeah, that is all very well said, Andrew. But the other thing to keep in mind is even with these contractors, janitorial supplies, hospitals, gyms, whatever, I'm not sure how many of them are even aware that the Amazon business opportunity exists. You know, they're probably even businesses are just doing their shopping on the normal Amazon website. So in terms of figuring out if this is worth it to you, and in a second here, we're going to we're going to share our screen. Actually, I'm going to go into the screen share right now. So we'll pull this up. All right. So we've got a screen share here. We're showing the last 30, 40 days or so. Today's May 1st, which is my birthday, by the way. So, Andrew, wish me happy birthday. Speaker 2: Dude, I didn't know that. I should know that. Happy birthday. Speaker 1: If you guys, if you guys want me to have a good day, make sure you comment happy birthday in YouTube, even though this episode is going live in a few weeks. But looking last week on, uh, it was on April 24th was when we were recording the episode on off Amazon placements. And I had mentioned that earlier that week, I had switched all my campaigns to minimize spend. We went from maximize reach slash spend to minimize spend or reach. And let's just look at the impact when I filter down for these 745 campaigns, the off Amazon placements. When I made that change on the 23rd, 24th, it looks like the spend did not change. If anything, it increased. Actually, up here, we can just see specifically what's going on with these spend trends. So we don't know yet how to minimize the off Amazon spend yet because flipping that toggle seems to have no impact. But let's switch over to the Amazon Business Placements and see what's going on there. So now we have a view that is showing all of our placement data, which By the way, Andrew, this update went through yesterday, but check this out. We have this now, this nice Excel function where when you select a group of cells, we'll show you the average. So if you're like, oh, how much am I totally spending on non-top of search placements? You just want to look at rest of search and product pages. Boom. That's pretty nice, huh? Speaker 2: Beautiful. Love that. Great addition. Speaker 1: I'll turn off this comparison for now too, just so we can get a better, just clean this up a little bit. So Amazon Business Places, now this brand that we're screen sharing, we're keeping it anonymous, but like I said, it's in the home improvement sector. So they do have home builders, contractors, sometimes making large purchases from this brand. However, The amount of those sales actually happening on the Amazon Business website in terms of our total ad sales, it's like around 1% of our total sales and spend. It is a slightly better conversion rate than product pages, but it's not necessarily better than, you know, rest of search and top search. Some other thing that's very important to note is the Amazon Business Placements are actually included in The top of search product pages, rest of search. So actually, yeah, when we're seeing this top of search, like all of these placement sales are including Amazon Business. So what's happening on Amazon Business? If you have a 50% increase for Top of Search, that is increasing for Top of Search both on Amazon.com and Amazon Business. So it's applying to both. And then if you increase on Amazon Business by another 50%, it's additive. So for a business Top of Search placement, you're now up to a 100% increase for those specific placements. We don't yet see on Amazon Business an individual breakout for different placements. What was the top of search visibility or conversion rate for Amazon Business? What was the product pages conversion rate for Amazon Business? I could actually be wrong on that. That data might be available in the API. It's not available in the ad console, that's for sure. When you're flipping around to campaigns, you only see the Amazon Business Placements and then the All the rest of the typical placements. I think in the API, you actually can get that breakout. But for simplicity, we're not showing it here. We're just showing it the way the ad console shows it, which is just the total overall performance for these Amazon business placements. So, Andrew, any other observations just from these metrics for the last like 40 days and what's going on here? Speaker 2: Yeah, all good points, really. I mean, that piece about how the placement modifiers stack is super important to know, because, you know, if you've got top of search set, you have an audience that you're targeting, and then you also add a modifier to your B2B placements, all of those things are going to add up. So if you've got a base bid of $1, and you've got 100% top of search, and 100% on a new to brand audience, and then 100% on the B2B placements, that's a 300% increase that you're adding to that $1 base bid. So that's super important to understand and know. Now, one thing that's interesting is just that you're not seeing quite the conversion rate discrepancy on Amazon B2B. Amazon actually reported that on average, the Amazon business placements do about two to three times higher conversion rates than the traditional placements do. I was actually looking at my own accounts and on one of them we saw about a 46% higher conversion rate on B2B versus the average conversion rate. And then on one of them was actually 59% lower than the average. So I think it just kind of depends. It's a case by case basis, but Amazon reported, you know, two to three times higher on those B2B placements. And I think that's probably just because the better pricing, it's a very specific audience that's shopping there. So, you know, perhaps you do see higher conversion rates there and there's justification for adding some placement mods to ensure that you're showing up and really competitive whenever people are searching on that B2B site. Speaker 1: Yeah, something else that is probably more so conversion rates, what's gonna happen to conversion rates, I think is really up in the air depends on on many factors, right? I think part of it's going to be how many other brands have compelling B2B offers. If you're really the only one that offers these big bulky buys, like let's just say you're selling I mean, this is probably a really bad example, but let's say you're selling like a protein powder and you sell it by, you know, normal people are buying like a one pound bag, maybe a five pound bag, but you're selling like 50 pound bags, right? Because this is going to be going into some massive, it's going to, I don't know, A massive chain that makes protein smoothies and that's what they're known for, something like that. This is a very bad example, not really. But I guess because where that example is coming from is I was working with a matcha brand at one point and they did have this massive bag of culinary grade matcha. Their primary target audience was kitchens And, you know, drink making folks who are trying to buy in bulk. So in those scenarios, if you're like the only brand that really has that offer and everyone else on like the business site is just selling, you know, they're just on the business site by default. You also, you can't choose like if you want to be on business or not. I think Amazon is just, you know, using some kind of computer that's just deciding what seems relevant to those brands. So bigger items, bulkier items automatically are listed there. But if you're the only one with a compelling bulk offer, You're going to have less competition there, which is likely going to mean larger conversion rates. For this brand that I'm working with right now, there's nothing really, their products are higher AOV, as you can see here, like they're averaging like $150 AOVs. So they're already like bigger products because this is an item that is going in the home. And so Already, like all of the competitors are also going to be on this website. What we do see though, so the conversion rates don't really increase because I don't think we have a lot of a unique offer that sets us apart from other brands that are probably appearing there. However, What we do see is the average order value increases. We could also probably look at the number of units per order. And yeah, I mean, units per order, we have, I think, a slightly higher number of units per order compared to average. So that's going to be essentially increasing the average order value, which could warrant larger CPCs and some bigger pushes. If you've got room to grow there, but the biggest metric that we always look at, of course, is the revenue per click, because that is a combination of both average order value and conversion rate. Both of those are the most important metrics to figure out. How much can you afford on these bids? And the top of search placement continues to be the most important placement in terms of highest conversion rate and highest RPC, even though the AOV is average, but that really high conversion rate is increasing our revenue per click quite a bit. That placement is including some Amazon business placements, but it's safe to say that this is mostly non-business placements just because the total business placements overall is A fraction of our spend and we can also. So here's a here's a fun fact, if you're trying to figure out. Okay, well, how do we know if these Amazon Business Placements, just by looking at this, if they mostly came from top search or whatever, you can use the click-through rate as a close proxy for where most of those clicks are coming from. You can see that we have varying click-through rates here. So this one's landing at about 1%, which is pretty close to the average for the entire account, which is 1.3%. So this is probably the placements that we're getting on Amazon Business is a very similar mix to what we're getting just on the normal Amazon site. So a little bit of a blend of everything, which for us is, yeah, let's pull over clicks column here as well. Yeah, most of those clicks for us are happening at rest of search. Good bump at top of search and etc. So those are just kind of my observations as I'm like analyzing this kind of in real time with all you guys. But Andrew, do you have any, I'm just going to kind of jump into some, some applications and strategies unless if you have anything else to add here. Speaker 2: No, I think the only other thing I was going to say on this is that, um, We're all talking about sponsored products and these business placement modifiers and things like that became available just for sponsored products, but they did also release a sponsored display targeting feature where you can start targeting B2B audiences. I specifically target B2B owners or like procurement professionals with I think the other one. So just another important piece to know if you are a B2B seller and looking to really hone in on that targeting and hit those B2B professionals, there are other ad types where you can get a little bit more refined and hitting those audiences as well. But that's all I had to add. Speaker 1: Yeah, now let's talk about strategy. What should your adjustments be for Amazon business? For 99.9% of our listening audience who wants to be always on the leading edge or the bleeding edge, which I learned both of those are appropriate. I was trying to figure out which one is it. It's both or the cutting edge. But whoever's trying to be on the forefront of innovation and thinking that this is an opportunity to, you know, Jump on this, grow your sales before anybody else gets on it, capture that momentum, that early mover advantage. I have bad news for you. It's probably not going to be very impactful and worth your time to put a ton of thought and just hours into figuring out how to make these placements work. Because for this brand, as you can see, without any placement adjustments on Amazon Business, The target ACoS for this account is around 15%, so we're already kind of hitting that. So it's already naturally kind of optimized. And that's just because the performance that we're getting in this case happens to be pretty similar to everything else. So it's pretty optimized. If I saw that my, let's just say I saw my conversion rate was double what it normally is and the ACOS is super low and I think there's an opportunity to increase there, then you could come and just say bulk set placements to like a 25 or 50% increase. You would essentially want to be doing it based on however much better those conversion rates are relative to all of your non-business placements, which To figure that out is a little complicated. You'd have to like take the totals and then subtract just the Amazon business placements to get to your non-business placements and figure out what those totals are. So you take your business placements and then your non-business placements, figure out how much better are those conversion rates doing. And then you can maybe add an increased modifier there by that much. And then just depending on how much like spend you're getting on those placements, you might need to reduce your base bids a tiny amount. But again, I would not worry too much about that. It's just going to be a lot of time and energy and that time and energy would be better spent elsewhere. This is one thing Andrew and I were talking with a Discord member about which, by the way, if you haven't joined the Discord yet, join so we can have these ongoing conversations. It's free to join. It's just a community of PPCers and Andrew and I are there with the AdLabs devs and we just hang out with people and talk strategy. Someone was getting really in depth into all of these like weird technical, you know, cutting edge strategies. And I jumped on a call with them and I looked at their account. I was like, bro, how about you first just like get good keywords? Because right now half your keywords are completely irrelevant because like your harvesting strategies are stupid. And I didn't say stupid, but you have bad harvesting strategies, bad negating strategies, bad bidding strategies. These are the lowest hanging fruits that are responsible for 90% of your overall performance. So don't sink 20 hours into a tactic that's really inconsequential for you when you're missing the forest for the tree. And you can't downbid these placements. So if you see that Amazon Business is greatly underperforming and you want to downbid that placement, that's unfortunately just not possible. You can't go negative on those placements and there's no opportunity to increase specifically for non-business placements because if that was an option, That would be a workaround. You could just reduce the base bids and then increase for non-business placements, but we don't have that either. So there's absolutely no way to reduce spend on business because you can only increase for these three placements, which is inclusive of the business placement. So you can't reduce the spend there. For most people, the spend's already low. You can only increase there. So if you're seeing a really high conversion rate and a really low A costs and you want to increase there, go for it. Speaker 2: Yep. All very well said. So it's going to be a case by case basis. You're going to have to go through, analyze your data and figure out whether or not business placements are actually producing anything for you. And then from there, you can decide whether to actually apply that modifier, whether it's necessary or not. And so I imagine for a majority of people, it's not. And in my case, for all the clients I'm working with, it's not. It's not worth the effort. It's not worth the additional attention. It is something to just check in on. It's a new feature. It's got a lot of buzz behind it and people are interested in it. So might as well look into it, check into it. But otherwise, put your time elsewhere, focus on those. Let's talk about some of the core drivers of performance and what's actually going to have a bigger impact on your business. Like Stephen was talking about, your bid management, keyword harvesting, campaign structure, all of these things are going to yield a much higher upside whenever you put a lot more attention into them than divesting that attention into business placements. Speaker 1: Absolutely. So let us know if you guys have questions. Drop those comments below. Also let us know topic requests. We are running out of ideas here. So you either need to give us a good idea for another episode or we're just going to stop producing episodes because we don't know what else to talk about. But next week is episode 100 of That Amazon Ads Podcast. We have a very special episode for you guys with a special guest. So make sure you subscribe so you don't miss it and we'll see you guys next time.