Last Thursday, US time, many Amazon sellers (including US sellers and Chinese sellers) found that Amazon advertising data was abnormal again, ACoS soared within 24 hours, and there were no orders even after advertising costs were spent. At the same time, there are accounts in the Hui member advertising account operated by Huiwang Zhiying who have a similar situation. And many people in the U.S. seller circle said they would not spend more on Amazon advertising and would significantly reduce advertising costs. In the face of cost, traffic, and conversion, what should we do now? Does U.S. sellers ditch Amazon Inbound Advertising mean they have other ways to promote more effectively? Today's Huiwang article will give you an in-depth analysis.
Part 1: Thursday's Ad Rates Soar
Last Thursday, the U.S. seller circle generally responded that Amazon’s advertising conversion rate dropped sharply on the day, and ACoS soared. There are also a few sellers whose feedback is normal. Hui.com found that there is indeed a similar situation after seeing the seller's discussion combined with the data of the advertising background of Zhiying Hui members. Generally speaking, the accounts with a sharp increase in ACoS are mainly sellers with high budgets on the day. The low conversion rate leads to an increase in ACoS, while the ACoS of Hui member accounts with low advertising fees and high cpc bidding on the day is relatively stable. But overall Amazon's ads on Thursday and Friday were not stable.
And American sellers reported that if they chase CPC bidding now, the conversion rate can be increased, but once a competitor on the homepage lowers the price, the conversion rate will drop sharply, and ACoS will increase again. At the same time, although Amazon's category ranking BSR can bring a certain number of natural orders, it becomes more and more difficult to make profits under the circumstance that advertising costs have risen sharply.
Part II: Looking at sellers' situation from the perspective of Amazon's three major business segments
Although Amazon is involved in a wide range of businesses, its main revenue comes from three major sectors: the online retail market, Amazon advertising, and AWS cloud servers. Now let's take a look at the performance of these three sectors:
1. Amazon Online Marketplace
This should be Amazon's traditional main business, and it is also closely related to Chinese sellers and the cross-border e-commerce industry. However, according to CNBC, although Amazon's online retail market business is still significantly ahead of other online platforms, the growth rate is increasing every year. A 4% decline, while offline brick-and-mortar retail stores are rising at an annual rate of 12% after the pandemic ends.
2. Amazon Advertising
This is a new project that Amazon started in 2012 and expanded and established Amazon Advertising in 2018. But this business segment is now the fastest growing of all Amazon businesses, with Amazon advertising revenue increasing by 18% compared to the second quarter of last year, making it the fastest-growing platform for advertising revenue among all U.S. and global ad operators , and the third largest advertising platform in the United States (14.6%) surpassed Google, the world's #1 advertising platform (26.4% in the US market, an increase of 12%), while Facebook's advertising business still accounts for 24.1% of the US market. Ranked #2, but only up 1.5%, and Facebook's advertising business is shrinking when factored in inflation.
3. AWS cloud service
Amazon launched the AWS cloud service in 2006, and it has been the growth engine of Amazon's business since then. After Jeff Bezos stepped down, the CEO who took office last year was the head of the AWS business. But according to the latest data, Amazon Advertising's revenue in the second quarter of this year has reached $8.76 billion, nearly half of AWS's business.
For Chinese sellers, the above data has to make us alert, because if the growth rate of Amazon's online retail market slows down, it means that everyone's sales growth will also slow down. increasingly heavy burden. And Amazon's continuous increase in the control of the evaluation policy, especially the prosecution of more than 10,000 Facebook group owners involved in sending the test two weeks ago, almost makes it more difficult to improve the conversion rate through rapid evaluation.
Part 3: Sellers start looking for cheap traffic
In the first part, we mentioned that more and more American sellers began to reduce or even abandon Amazon advertising, but as the platform with the highest conversion rate, these sellers did not abandon Amazon, but began to look for cheaper traffic resources.
After communicating with several American sellers and online promotion companies in Chicago, we began to understand their current off-site promotion methods. Here we will introduce them to you:
Step 1: Choose a platform
Overall, they focus on publishing product information (content) on 4 platforms: Instagram, TikTok, YouTube, Facebook. Among them, they believe that the highest conversion rate is Instagram, Tiktok fans are more active (but the purchasing power is still weak), YouTube is more suitable for educational and how-to demo videos, and Facebook is more focused on product discount group promotion.
Step 2: Create Content
The relevant contents are mainly as follows:
1. Short videos (the most interactive), short videos that provide solutions to customer pain points are more popular on Instagram and TikTok, and some even directly use Douyin to deliver videos
2. Product pictures (maintain account and fan activity)
Even if the current product pictures are beautifully done, the amount of information and the possibility of making customers interested in the product are much lower than that of short videos.However, in order to keep the account active and gain target fans, many accounts will cooperate with many product pictures
3. Forwarding and sending test (get free traffic)
Testing and guaranteeing the number of orders placed each day are the keys to Amazon’s operations. After Amazon’s continuous crackdown on delivery testing, we can see that more and more American sellers are still conducting delivery testing, but in the same way as the previous Facebook group delivery testing. There is a big difference, the current practice is:
(1) Send the test through Instgram
(2) Ask customers to share @ own friends
(3) Allow customers to cash back after purchasing products on Amazon
(4) Customers who get products for free must provide short video content
(5) Customers voluntarily leave Amazon reviews
Through the above methods for Instagram delivery testing, a product will be shared by a large number of customers, and the BSR ranking and organic order volume will be improved with little or no Amazon advertising investment.
Part 4: Advantages and Disadvantages of Instagram Delivery
Hui.com has met many social platforms and online promotion companies in the United States in the past week. The traffic and conversion rates they bring to brands are indeed huge. The brands promoted through them are not only some new brands, but also many international big names.
However, we also noticed the limitations of this method in our communication with them, that is, almost all brands cannot obtain huge traffic through the above methods. The reason behind it is that the brand has a single product or a single target group, so creating The number of content and accumulated customers is very limited. However, because these social media promotion companies involve a wide range of products, they can continuously create creative content, attract the attention and sharing of a huge customer base, and push precise customers to the brand’s Instagram account in the post for attention. and form transformations.
But we also noticed that American sellers are also extra careful when doing delivery tests:
First, they don't require customers to provide reviews in advance
Second, they promote their own independent websites on social platforms
At the same time, they will pay great attention to collecting the email and contact information of customers
However, through the above methods, we can see that when these sellers promote Amazon's products, especially new products, they often set the price of the products at a very low level, and then send Amazon's new product links to customers through mass emails. The above methods can quickly increase the BSR of the product on Amazon. In short, improve BSR through off-site testing, and get more conversions through on-site organic traffic (or a small advertising fee) while BSR improves. It's also easier for them to keep up with customer reviews because they have the customer's contact information.
Part 5: Huiwang Vancouver Studio
Although we can’t say that every brand can get a good conversion rate through the above methods, we have shared with you in the past article that Amazon’s #1 seller in the household kettle category, Simple Modern (Instagram account: @shopsimplemodern) It has now stopped investing in Amazon ads and is promoting products almost exclusively through social sharing.
The following is Simple Modern's Instagram page for your reference:
The following are Simple Modern's Instagram delivery rules:
Many Hui members expressed their desire to learn their off-site promotion methods after we shared our last article about Simple Modern and Quadlock, but the very real problem is that there is almost no way for product videos to create materials that are close to the lives of overseas consumers. Even if you find foreign models to shoot in China, you can't find a lot of overseas life scenes. And even finding celebrities overseas for video shooting is very expensive.
In order to solve the above problems of everyone's feedback, Huiwang has now established a video studio in Vancouver, and will cooperate with the Vancouver Film School to create more professional short videos and product video content for Hui members.
At the same time, over the past 2 weeks, we have visited several US social promotion companies and will work with them to promote the created videos to more consumers.
In the studio testing phase, we will select a small number of products for Huiwang Zhiying Hui members to launch related video production and product promotion work, and will expand the product range in the near future. The work done by Vanhui.com will not incur any cost to Smart Camp members, including:
1. The selling point story
2. Video shooting of product details
3. Shooting of overseas life scenes
For the following third-party services, Smart Camp members can consider whether to participate according to their own circumstances:
1. Send the test through a large red person account
2. Overseas model hiring and shooting
3. Special venue rental (eg: gym)
4. Special supporting props