Off Amazon Placements for Amazon Sponsored Products – Are They a Scam?

Off Amazon Placements for Amazon Sponsored Products – Are They a Scam? 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 2: All right. Amazon has created yet another way to waste your ad dollars, drive up your ACoS with off-Amazon placements. So we're gonna be digging into all that. Stephen, let's jump into it. What do you got right from the cuff? Speaker 1: Well, I'm going to be pulling open a screen share just so people can see where this conversation is coming from. What has happened is Amazon has, it was about a year ago that Amazon started, no, it was 2023. So about two years ago, give or take, Amazon started saying, hey sponsor products, you can now push these ads off of Amazon should you choose. Little background context, previously it was only sponsor display campaigns, which were the ad types that could go. Off of Amazon, which everybody tested, DSP does that quite famously and everybody realized that off Amazon placements are horrible for multiple reasons. You're just going to get the lowest click-through rates, the lowest conversion rates and the worst attribution window. So it's just the ACoS is always crazy and conversion rates are bad and it's just a big problem. So that's why people didn't like that for Sponsored Display. And sponsored products is everybody's first love, the most native ad format in the entire ad console, best conversion rates, lowest CPCs. We love it. So when Amazon started pushing these ads off of Amazon, essentially converting them into more of a sponsor display type, you can understand why everyone said, we're not going to do that. And so people Did not. And it wasn't really a problem because we had some reporting for off Amazon, but the spend that we were seeing was negligible. And Andrew, I think you have some observations around that as well. Speaker 2: Yeah. Yeah. And the biggest thing with that is they give you no control over it. So they're just pushing stuff off Amazon. They give you no control of how to minimize that or reduce that spend at all. It's just happening. You know, without your discretion. So that was probably the most annoying part. But yeah, whenever, you know, it first started rolling out, we could get some level of observation around how much of an impact it was. And in general, relatively negligible, at least for the accounts that I've been working on. I was seeing, I was just checking before this episode and most, the accounts I'm looking at have, you know, it's less than 1% of spend. That is actually being pushed off of Amazon. And I'm not sure if that's how it's always been, but generally like it's between 1 and 3% for my accounts. They did add some ways to control it, but it's still pretty primitive and it's not super clear exactly how effective those, these new tools are to actually try to minimize the spend that's going off Amazon. Now we, I have observed that the conversion rates are significantly lower when these ads are placed off Amazon. Just makes sense. This is not the native platform where these ad types typically exist. And on one of my accounts, I saw that the conversion rates were 83% lower than the average conversion rate that I was seeing across all placements on Amazon. So big drop in conversion rates when you start pushing those ads off Amazon. And yeah, it's been pretty pretty drastic difference. Speaker 1: Yes, good points, Andrew. One other thing to mention, if you guys have been following this podcast for a while, you know, we love talking about placements and we're usually saying that in a very average sense. The product page placements are typically the worst. Out of those three placements that you get, top of search, rest of search product pages, product pages typically underperforms, which makes sense just due to the nature of the placement being placed at the bottom of a product page. Someone already clicked on that product. They navigated to that product page because they liked something about that product. So now you're Naturally going to be second pick. And so you have to overcome all these objections. So that's usually why product pages performs worst. And that's why our strategies has been because we can't reduce bids specifically for the product page placements. Instead, we have to reduce all the base bids for the keywords in that campaign and then increase for the other two placements, which are doing better. That's just a recap of our placement strategy. When it comes now to these off Amazon placements, they make product page conversion rates look through the roof. Relative to what we're seeing and just to give you an idea and you can see what I'm looking at and the reason why we're now having this conversation is because it seems like. Out of nowhere, the off Amazon spend, which used to be inconsequential, is suddenly spiking. So I am filtered down here to just one campaign and just looking at the month-to-date performance, basically the first three weeks of April, to see the spend across all three of these placements and see what's been going on. And you see that the highest spending placement right now is off Amazon, which is averaging a 0.6% conversion rate. Compared to our 9% conversion rate for product pages. So product pages is more than 10 times better conversion relative to these off Amazon placements. And just look at the ACoS. I mean, Top of Search is still the best performer as it typically is. But these off Amazon placements going crazy with an 80% ACoS for this campaign, which is 10x above the total for this campaign. Andrew, that setting, we also, there was some news on these campaigns where there's two settings that people can use on these campaigns between maximized reach and minimized spend. Tell some folks about that real quick. Speaker 2: Yeah, so if you go to the ad console and you click into one of your campaigns, under the campaign settings, there's a new little setting at the bottom that you'll be able to see here. You can either maximize reach or minimize spend. And Amazon rolled this out not that long ago, maybe a couple months ago, where you could actually try to prioritize whether you want the spend going off Amazon or not. And when they first rolled it out, I was kind of going through my campaigns and all of them were by default set to maximize reach. So Amazon was like, Definitely skewing towards trying to push more of that traffic off Amazon. Now, at the time, I didn't really think too much of it, to be honest, and I have thousands of campaigns, and so I didn't really mess with it too much. I was kind of just watching to see what would happen, and I didn't see a huge spike in off-Amazon spend or anything, but anyway, eventually, I don't know what happened with my account, but the setting changed at some point, where now they're all set to minimize spend, And so I didn't actually do that manually or anything like that because I would have had to go through thousands of campaigns and change that setting because there was no way to do it in bulk operations or no software tools really had it at the time. So it was a really new feature. And so yeah, this is the only toggle that we really have to kind of Try to pull that spend back onto Amazon where we can actually have strong visibility on it, good control over it. And yeah, so that's that new setting. You definitely want to keep an eye out for that and check your campaigns to see if all of them are set to maximize reach or minimize spend. And by default, you should be most likely setting this to minimize spend, unless you have some bizarre strategy that I'm not thinking about. Speaker 1: Yeah. Also, Andrew, do you know what the definition of reach is? Speaker 2: Nah, tell me, Stephen. What is it? Speaker 1: Wasted spend. Speaker 2: That's a good way to put it coming from Amazon. Yeah, that's it. Speaker 1: So it is funny because they're like do you want to maximize reach or minimize spend? It's like they're treating reach and spend as synonymous. And comparing, do you want to maximize or minimize it? And there's a few other super weird things going on here guys, which is that when I look at this campaign, when I look at the placement settings on this campaign in the actual ad console, I don't see any off Amazon placement data within that ad console. I'm only seeing the spend from these three placements. And then there's also Amazon Business, which if there is some spend on the business placement, that is actually the top of search, rest of the product pages includes business placements. So we'll do another episode talking about Amazon Business. We're not gonna worry about that for now. But what's weird is that you see on this campaign, it's totaling up to $1,800 of spend for this period. But in the ad console, the entire campaign is only reporting around $900 of spend, which is raising a lot of questions for us because it looks like that off Amazon spend is not actually being attributed to the campaign. So it's like, where is this spend going? And if we think that that same performance is factored into these placements, similar to how the Amazon business placements works, well then that raises more questions because if this $900 is spent here, if $870 of that was off Amazon, then that makes absolutely zero sense for where the sales are going and coming from. Because these just really aren't lining up. Like you wouldn't have if, like you would have more sales It's raising a lot of questions. It doesn't make sense. And I'll just tell you personally that myself knowing this account and this campaign and having managed it for years, this is very abnormal performance. And so yeah, we like or I should say the current ACoS and conversion rate spend for these placements is very normal. That's what I meant to say. These are very normal. And at the campaign level, it looks like nothing has really changed on this campaign. But through the Amazon Advertising API, where we're pulling these out off Amazon reports, I'm seeing that for this whole account as a whole, around six, seven percent of my entire spend is going off Amazon with like half a percent conversion rate. And It's just very confusing. And this happens to also be a brand defense campaign for what it's worth. So it's like, I don't even know where this brand, where this brand defense, we're bidding on branded keywords. Is this going on? I don't think it's going on Google. Is it going on Pinterest? Like, I don't know where this is going. And that's the other thing, like, if these placements are inclusive of off Amazon placements, what's the top search, rest of search other placements? Like, what are people searching on? Like what platforms What other retail, I'm guessing it's other retailers. I don't know. So lots of questions to be asked here. Speaker 2: Yeah. Yeah. I'm sure it's, it's going on, you know, similar to like the DSP and display ads. They can display on a lot of the other sites and outlets that Amazon owns. So I'm sure that some of it's that, but yeah, it definitely doesn't make a whole lot of sense to have 871 of your, would you say a thousand dollars of spend on this campaign going off Amazon. So it looks like this is, Unreported spend whenever you go into the ad console and compare it to what we're actually pulling through the API. So yeah, very bizarre behavior there. And it's got a lot more questions than answers on this one. Speaker 1: Yeah. And I'm just going to summarize what this table is saying. Either These three placements are inclusive of Amazon, which means 90% of all of this campaign spend is going to off Amazon. Or that is not inclusive of off Amazon, which means around half of the campaign spend, so only half of the campaign spend is going off Amazon, but that spend is not being reported in the ad console. Which is scary because it's like, are we going to get billed for this later? Is it going to be charged to the brand's credit card? I have no idea how that's going to work. So either 90% of my spend is going off Amazon and I can't control it. And for whatever reason, the off Amazon spend is not attributing sales properly. So either that's happening or only half the spend is going off Amazon and I still can't control it. Speaker 2: Yeah. And quick question. Did you have the setting on this campaign set to minimize reach or minimize spend on this or was it set to maximize reach? Do you know? Speaker 1: So I did. So the settings were set to Maximize reach by default because all my campaigns were set to maximize reach by default. And you can't change these on bulk operations. And so if you're trying to switch everything to minimize spend, you're going to have to go through one campaign at a time. Unless if you are connected to AdLabs, then on the main campaign optimizer, you can come here, you can select all these sponsored product campaigns. Do bulk actions and then you can change the setting here for sponsored ads. You can switch that to minimize spend and you can hit apply and push that through. So that's I have since done that and I did that within the last couple of days. So I don't know if that's going to help. I guess we'll have to stay tuned and see. But yeah, a minute ago when I was looking only the off Amazon spend, it did not make a difference with yesterday. So I put those changes through on this Tuesday, the 22nd, and they are now still spending. So I guess we'll have to see. Speaker 2: Yeah, we'll see. We'll check back and See if that setting actually does a whole lot for us. But yeah, quick way to save some time making those changes if you're an AdLabs user. Speaker 1: Anything else to add to this topic, Andrew? Speaker 2: Nope. I think that's it. And Alex Hormozy said that when you ask people to do a whole lot of different things, they do none. So when we ask you to like and subscribe and leave a comment, we should just actually be asking you to do one thing, and that is subscribe. So make sure you subscribe to that Amazon has podcast. Catch us on the next one. We'll see you there. Speaker 1: Peace out. What has happened is Amazon has, it was about a year ago,