There is no denying to the fact that Amazon is an uber-competitive marketplace. There is competition at every point. Competition to rank on the first page, the competition to be seen more, competition for price, competition for better images. It can be difficult for small sellers to survive, forget the thriving part. However, one of the ways sellers use to reach a broader spectrum of audience is through Amazon Sponsored Ads or PPC. The affordable and easy to use tool is utilized by multi-million dollar Amazon brands as well as the 3rd party sellers. But now this advertising tool seems to take a toll on the hard-working organic results and you might be one of them who is affected. There have been two such instances in recent times:
#1: Demotion Of Organic Search Results
Amazon’s search result pages are increasingly showing paid results in prominent places. For searches in high competitive categories, there are no organic results in the first line of the search result page. The first line is jam-packed, with only the sponsored results. Until the customer scrolls down the Sponsored Brand Ads, Sponsored Product Ads and Our Brand label of Amazon, they find the organic search results. Most customers don’t actually bother to go this down and usually find their ideal product right from the first line of the product.
It is said that Amazon has unlimited shelf space. But in this “unlimited” shelf space, the most profitable position is the #1 page of the search results. There may be over 1,00,000 hemp supplements available on Amazon, but amongst them only the first 120 will be seen by 99% of the customers. Others would simply lie there on the 2nd, 3rd or the 10th page. By demoting the organic results, Amazon is not only losing the trust of hard-working sellers but also demoting the consumer experience. How? If you notice carefully on the below picture, the products on the first line of the search result page don’t even have great reviews. Naturally, the customers who used these products didn’t have a great time. While exactly below the organic results seem to have some great products from reliable brands. They have great reviews, better ratings and a professional main image. It is clear that by tempering with the search results, they are ruining their impression in the long run.
#2: Replacing Of Organic Product Suggestions With Sponsored Ads
Your battle doesn’t end after bringing a customer on your product detail page. Exactly below the product images and add to cart section and above the description and review section, you will find multiple rows of products similar to yours. They can be better than yours in terms of reviews and price so there is a possibility that those products are able to woo the shopper right from your product detail page. Up until now, these recommendations were selected by Amazon. But now they are being replaced with sponsored results. Sections like “Customers who bought this item also bought” are replaced with “Sponsored Products Related To This” Item, “Brands Related To This Category On Amazon,” and “4 stars and above” sections which are clearly paid positions. Visually there might be no difference in these paid sections and the previous organic sections, but otherwise, there is nothing the same.
Seems Like Paid Advertising Is Dominating Organic Efforts?
According to Market Pulse, brands and retailers selling on Amazon will spend as much as 9.85 billion dollars on advertising in the US alone. Almost 4% of the total sales earned on Amazon are through paid advertising. Amazon may still be smaller than Google and Facebook when it comes to advertising, but sellers cannot ignore the fact that ad conversion rates on Amazon are much higher than ANY other platform. Reason? The audience viewing your ad on Amazon is genuine shoppers with concrete purchase intent. This is the reason why bids set on Amazon are much higher than any other advertising platform because your ad is more likely to convert. And amongst all the ad formats available on Amazon, Sponsored Ads are responsible for the maximum amount of ad spend on Amazon. They are easy to set up and if made the right way, they can bring your product on the first page. This is why ALL the Amazon sellers use it. And Amazon too, finding Sponsored Ads profitable seems to favor them more, which is why sellers are experiencing a partial behavior mentioned previously.
Amazon’s customer-centric approach is the gold standard in the online retail world and it has been used as an example by all the competitors. To give its customer the best experience possible, it never used to temper with the organic results. The search result positions were based on paid advertisement + editorial recommendation. But nowadays it seems to be fading. Instead of relying on factors like relevancy, its prioritizing products based on ad spend. Indeed it will be difficult for sellers who were already ranking high but are now ignored because the world’s most customer-centric company is now chasing advertisement profits. You might be thinking that what’s the point in spending dollars on optimizing the listing and images? All that matters is PPC. Well, this is not completely true. And here are some of the reasons to prove it to you why organic efforts still matter.
Here’s Why It Would Be A Grave Mistake To Cut Down On The Organic Efforts:
#1: You Pay From Your Profits To Get A Sale
We all know the woes of selling on Amazon. You pay for taxes, you pay for FBA, you pay for advertising and after all that, the profit you get is little. You cannot actually cut down on the taxes or FBA costs, but you can definitely do something about the money you spend on PPC. Try to reduce that and your profits will automatically increase.
#2: Organic Efforts Are An Investment
PPC sales are an expense and organic sales are an investment that will bring dividends for years to come. You are paying for a position and it’s not confirmed whether you will earn a sale by being at that position or not. There is a possibility that customers clicks on the ad, views your product and do not buy the product. The money you spent is going to be wasted. While on the other hand, with organic ranking, you have got nothing to lose.
#3: PPC Sale Increase & Organic Sale Decrease Is Not A Good Sign
Although PPC seems to be a shortcut to achieve sales faster, it is not a permanent solution. It should be a way to help you rank higher. If your PPC sales are more than your organic sales right after the product launch, it is acceptable, but if the scenario remains the same, then it’s a warning bell. Your advertising sales should have a snowball effect. After sometime, it should lead to organic sales and brand awareness. So it won’t be right to just depend on paid sales just because it’s an “easy” way to get sales.
#4: PPC Positions Are Not Permanent
They change every day. Today you might be on the first page, but there is no guarantee you will be on the first page tomorrow or the day after tomorrow or after one month. New products are listed every day and bids are adjusted every day. Amazon being greedy for money, will only choose the products based on the bids. So after some time, you may lose the position at which you are now. While if your organic ranking is higher, you might be demoted, but Amazon won’t be able to completely take away your position.
#5: Amazon SEO Is Critical For PPC’s Success
Ever heard of retail readiness? No amount of PPC efforts are going to help you if your product detail page isn’t ready for the traffic you bring. The most significant metric of your PPC campaigns and ads is conversion. If your overall conversion rate is low, the ACOS naturally will be high and the money you spent is going to be wasted. Before even starting your PPC campaigns, it is necessary that you make your product detail page customer-friendly.
#6: Amazon’s Updated Algorithm Doesn’t Support PPC As It Used To
Did you read my blog on Amazon’s latest algorithm update? It is believed that Amazon’s updated algorithm, widely known as A10, gives more importance to relevancy and not PPC. PPC used to be a significant deciding factors before and it was believed that more PPC sales can bring great results in organic ranking. But the situation has changed now. Amazon has understood that it would be best if the “most deserving product wins” and not the “most paying product.”
Maybe Amazon is partial; maybe with the changes in the updated algorithm, we may see a change in how the listings are positioned and ranked. But no matter what the situation is, you cannot ignore the fact that organic efforts never go in vain. It might sound too cliché, but it’s actually true. At the same time, I am not telling you to completely stop PPC; that would be insane. Try to maintain a healthy balance between the both – just make sure PPC sales don’t overpower your organic sales. And if you need any help in increasing any of the two sales, then feel free to contact us. Our team of Amazon Consultants consists of both: Amazon SEO Experts and Amazon PPC Consultants.