Attention: The Risk of Pausing Amazon PPC Campaigns!
Henry Ford once said stopping advertising to save money is like stopping your watch to save time - A perfectly summed up statement on how pausing Ads will have a long-term impact on your business/sales.
Return of Advertising Spend (ROAS) is the only direct tangible data point that Amazon provides, and unfortunately, the only one influencing most sellers' decisions on what to do next with their campaign or Ad spend strategy. Truth be told, the impact of an Ad Campaign is like a “Flywheel effect”; you need to start understanding the small wins that will accumulate over time to give you greater success.
Consumers don’t buy a product the 1st time they see them, the decision of buying a product happens after skimming through multiple products, multiple search queries, cost analysis and a lot more and this is where an Ad or consistent Ad campaign helps.
PAUSING AD CAMPAIGNS: Read Below
1. Product Awareness Impact
Research says that it takes more than 5-6 visual impressions of an Ad that a consumer needs to see before the brand can be trusted. The very essence of spending heavily on advertising is not only to convert direct sales but also having a long-lasting recall value that might make your product an option to buy.
Pausing a campaign will directly put a brake on the brand marketing.
2. Organic Growth Decelerates
It’s uncanny how organic and Advertising sales are co-related, though one might say they are completely different. One of the main factors affecting organic ranking is the sales velocity, and it has a huge impact on how your product rankings are affected for various search terms following the Sales Velocity Metrics.
However, there is no official confirmation from the Amazon A9 algorithm that organic rankings consider sales velocity as a metric but it seems that it is a huge determining factor and if we further dissect the Sales Velocity, you would understand that it is directly proportional to the number of sessions we can create for your product page.
Advertisement is the easiest way to keep on generating relevant sessions for users to get to your product page.
3. Less Sales = Less Reviews = Less Trust
In a world of millions of products, there are very few metrics that a user gets to make a decision while buying a product, Reviews! The more the reviews, the more trust it creates for customers to buy. The only way to get reviews or ratings for your product is to sell the product.
This is like a “Chicken and Egg” theory, products won’t sell without a review and one cannot get a review without a sale. This is where Ads do the magic, they replace (in people’s mind) what a review does for product purchase; Ads do the same for creating a trust to get them on the product page.
4. TACOS matters
As a seller, you cannot just take ACOS as the only dependent factor. An important data metric that needs to be considered for your advertising is not only the return of investment on your Ad spend but also the total sales or in Amazon language - TACOS (Total Advertising Cost of Sale).
If you consider ACOS as a silo metric, for most cases it’s only going to feel like a lost battle. But over a period of time, the combination of sales from organic and constant brand awareness creation is going to be beneficial.
5. Growth Hampered
Great business leaders in the past have observed that you cannot avoid your competitors. To survive in the market, you need to stay ahead of the competitors. But is it something that is worth your time?
It’s a very common mistake to only value customers with the value of goods sold and not look into the competition.
Pausing your Amazon Ads will ultimately result in risking your product page traffic, while your competitor gets a way with it. The reputation that you have built based on running advertisements when paused will increase the chances of opportunities going to competitors. You might end up risking:
Repeat Purchase (ACOS will decrease for the purchase over a period of time)
The feedback that helps you get more sales and create better awareness of products.
Word of mouth.
Thus, when you are pausing your Amazon Ads, you are giving your competitors a free ride to your products with a lower Ad spend.
Conclusion:
The famous retailer John Wanamaker once said “Half of the money I spend on advertising is wasted, I don’t know what half”
We, at YourSeller, believe that Advertising is an “ART” developed over time by taking into consideration various mathematical and physiological factors affecting the Customer Product Purchase Journey. With a greater focus on the factors discussed above, we are rightly placed to make a positive impact on sellers’ ability to get a better long-term ROI on their advertising investments.
