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Amazons Winning Ecommerce PPC Strategy

Amazons Winning Ecommerce PPC Strategy

 

 

Amazon has an Ecommerce strategy. It focuses on PPC (Search) advertising.

  • In 2015 Amazon raked in over 70 Billion dollars. This figure is all the more phenomenal when you look at it’s competitors Apple, Walmart, Costco and The Home Depot, whose combined revenues were less. Amazon sweeps them away.
  • But what is the secret of their success? Fractl, a Florida based company, analysed its marketing spend and it is fascinating.
  • Amazon spends most of its money on paid search advertising, and tellingly, its competitors mostly do not.

The annual breakdown is $8 million on TV and Radio, $54 million on Print media, and a truly phenomenal $1.35 Billion on paid search advertising.

That is over 85% of its spend on this channel. Of competing brands, Apple and Etsy put similar proportions on search. Apple is considered the worlds most valuable brand, whilst Etsy had a phenomenally high ROI on its ad spend. So the three top PPC spenders analysed all had the majority of marketing spend on PPC advertising.

The other interesting finding is that organisations that spent a lot on search, tended also to have good organic traffic, reflecting a professional ecommerce led business strategy.

The bottom line is that ecommerce businesses really can achieve great success from search advertising, reflecting that it is a very effective means to drive growth.

The key is to NOT set upper limits to your PPC spend.

The ammount any business spends should be set by ROI, and since it is fairly straightforward to measure the value and impact of search advertising, in terms of sales and sale revenues, it is a very quantifyable and optimisable advertising medium. With optimisation the ROI will improve, and as long as it remains so, increasing spend is an effective way to grow a business. Amazon has been able to expand its operations to match the growth quickly, and it has come out far in front.

If you would like to know more, why not give us a call here at Network Intellect – Telephone: +44 (0) 844 543 0980 or visit our page on PPC advertising here.

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