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Navigating PPC and Organic Sales on Amazon

Join Mina Elias & Tom Waghorn on this podcast about PPC Keyword optimisation.
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In the fast-paced world of e-commerce, Amazon stands as a colossal marketplace, offering sellers a platform to reach millions of potential customers. However, navigating the intricacies of Amazon’s advertising landscape can be daunting. This is where the latest episode of the Clear Ads Podcast comes in, offering invaluable insights from Mina Elias, the visionary founder of Trivium Co., shedding light on the often misunderstood relationship between PPC advertising and organic sales on Amazon.

Elias, a seasoned expert in the realm of e-commerce, unveils the impact of PPC advertising on organic sales, challenging the conventional wisdom surrounding PPC metrics. In this captivating episode, he emphasizes the crucial yet often overlooked concept of misattribution in PPC sales numbers, urging sellers to consider the broader scope of total sales for optimization.

One of the key takeaways from the episode is the necessity for a balanced approach to PPC advertising, ensuring that it complements rather than hampers organic sales. Elias delves into a plethora of techniques to safeguard organic sales while harnessing the power of PPC, urging sellers to meticulously analyze PPC spend at different campaign levels to drive effective strategies.

The discussion also confronts the concept of cannibalization, emphasizing Amazon PPC’s primary goal of increasing visibility and the strategic timing of launching sponsored products. Elias emphasizes the need to prioritize profits over traditional metrics, shining a light on the significance of key performance indicators and consumer behavior in shaping a successful Amazon sales strategy.

Perhaps one of the most intriguing aspects of this episode is the exploration of efficient strategies to reverse damaged organic sales. Elias, drawing from his wealth of experience, uncovers actionable methods to rejuvenate organic sales efficiently, offering a beacon of hope for sellers facing such challenges.

This episode is a must-listen for anyone navigating the intricate world of Amazon sales. Whether you’re a seasoned seller or just stepping into the e-commerce arena, the insights shared by Mina Elias are sure to reshape your understanding of PPC advertising and its profound impact on organic sales on Amazon.

Tune in to the Clear Ads Podcast and unlock the secrets to harnessing the true potential of PPC advertising, as Mina Elias unravels the intricate dynamics of Amazon sales, leaving you equipped with the knowledge to propel your e-commerce journey to new heights.

Welcome to the Clear Ads Podcast, Highway to Sell. As usual, you’re listening to myself, Tom Wycorne. And this week we’re joined by a very special guest, Mina Elias, the founder of Trivium Co. Mina, I don’t know if you want to introduce yourself to our audience for those that haven’t come across you. And yeah, feel free to plug any links of where they can find you on socials. Awesome, man. Yeah. So my name is Mina Elias. I’m the founder of Trivium Group, which is an Amazon marketing agency. We basically help brands on Amazon start to finish. The website is TriviumCo.com.

And then you can find me on YouTube, Mina Elias, LinkedIn, Mina Elias, that’s M-I-N-A-E-L-I-S, Instagram at the Mina Elias. I’m pretty responsive and I’m putting out like a shitload of valuable content every day. So definitely follow. But yeah, I’m excited to, I see the questions for today.

I’m very excited to have this chat. Yeah. And I’m excited to dive into this. We’ve covered organic cannibalization on the podcast before, but we only skim the surface. I’m really keen to dive into that.

So yeah, that’s what we’re discussing this week. We’re going to be talking about techniques to ensure that your PPC advertising doesn’t damage your organic sales and how you can maintain a fine balance between advertising and that organic traffic. So I guess the first thing we should probably dive into is what do we mean by PPC cannibalizing organic sales? Why is that a concern for businesses? And the definition between organic sales versus PPC sales. So I don’t know if you want to kick us off there, Mina, and then, yeah. I’ll kick us off. So first of all, here’s the first and controversial and difficult pill to swallow is what you see in the campaign manager is not accurate. It’s misattributed.

And so you cannot rely at all on PPC sales. So that sometimes is a shocker to people because they’re like, damn, my whole life, I’m looking at ACOS, I’m looking at PPC sales, telling me that these numbers are not accurate. And that’s exactly what I’m saying. Those numbers aren’t accurate. And you can test them very simply by taking a campaign that’s spending $100 a day, making $300 a day in PPC sales. Pause that.

Just pause it. And then you should, hypothetically, only lose $300 in PPC sales. Go look at your total sales and see what happens. You end up losing more than $300. And then you realize, why did that happen?

Because those numbers aren’t accurate. There’s misattribution. And so I’ve tested this so much because it’s like, oh, how can I refine my ads so much? But I keep looking at the ads numbers and then realize, what if I just looked at the total sales instead of the ad numbers? And obviously, that puts us in the position of, okay, when I’m optimizing, I can only optimize one thing at a time, look at the total sales or in a very controlled manner, or else I’m not able to, right? Because you lose that middle piece, which is PPC sales. And as a result, I came to the conclusion that, unfortunately, we have to look at PPC spend at the different campaign levels, total sales. And even though total sales lumps everything up, the only way to overcome this is something called controlled experiments, which is basically changing one thing at a time and looking at the total result and seeing how it affects it. And so with that being the case, let’s not look at PPC and let’s not look at PPC versus organic.

So many people that I work with, the clients, they’re always like, oh, we’re 40% PPC. We want to see a 30% PPC mix. First of all, it’s impossible for us to even get those numbers.

They’re not accurate. And then the second part is, it doesn’t even matter, right? At the end of the day, what matters is your revenue and your profits.

So let’s talk about cannibalization. The search results page consists of, you have a headline search ad at the top, then you have a bunch of sponsored positions, then you have organic positions, then you have video ads, and then you have more sponsored positions and that’s it. More organic.

Yeah, they’re more organic. And then maybe a video at the bottom. I don’t know if you’ve seen that, but I’ve seen sometimes like two videos on the page. Yeah, sometimes there’s a clump of three at the bottom, isn’t there? They really mess around with sponsored brand places at the moment. Yeah, exactly. They’re basically trying to see how much more ads they can put on the page without affecting customer experience. So with that being said, the goal of Amazon PPC is to get as much visibility as possible and to drive as many people to the listing as possible, right?

It’s not for conversion. Conversion then depends on your conversion rate, but the goal of us advertising is just to get more people into the listing. What happens when you’re ranked organically and then you throw up PPC like a sponsored product ad? Now you’re ranked organically, let’s say position five and you’re ranked PPC position. Will that result in more people coming into the listing and is it worth the money? So for example, you are getting a hundred people into the listing from this one keyword while you were ranked organically. Now you added a sponsored rank. Now you’re getting 120 people into the listing, but you’re spending $100 a day on that keyword.

Or let’s say you’re spending $50 a day. Is it worth the extra 20 people to spend $50 a day? Well, what if you then throw up another ad, right? A headline search ad, a sponsored brand. And now you’re spending another $50 a day, now you’re spending $100 total and your total sessions from that keyword is 130. So you went from a hundred organic to 120 with the sponsored product and now 130 with the sponsored brand. Was it worth it?

Now this is the meaning of cannibalization. We’re bringing probably the same people into the listing, but we’re now giving them this option to spend money. Like, Hey, here’s this option for you. You can come into the listing for free, or you can come into the listing and spend money. And so the way that PPC should be used hypothetically is to get you visibility where you don’t have visibility. So you have zero people coming into your listing or little people coming into your listing from a certain keyword. Now you run PPC. Now you have a lot more people coming into your listing from that keyword. So it was worth the money that’s being spent because with those people- You’ve gone from zero to nothing. Yeah, exactly.

From zero to something. And so that’s very fundamental level is how do you prevent that issue from happening where you have a hundred people come to the listing and then you launch some campaigns and now you have 120 and you’re spending a bunch of money and this is the worst part, right?

This is the killer. You will go and you’ll look at campaign manager and we’ll say your video ad has a 7X ROAS. Amazing performance. But then you go look at your total sales. They’ve barely changed. They maybe went up a little bit. You’re spending $50 more, $100 more a day on this campaign and you’re making $30 more, $50 more, $100 more.

So worst case, you’re at a 1X ROAS. But the thing is you’re like deceived by what you see in campaign manager.

And this has happened to me before. I learned it the hard way, which is we had this one client that was pushing so hard for video and they’re like, we know video is going to crush this, the new hot thing. I’m like, fine guys, you know, if you want to go hard, let’s go hard. We launched a bunch of video ads, sponsored products for PPC. Performance went way down and it looked like video was doing amazing. And they kept telling me, you need to optimize sponsored products.

You need to optimize. I’m like, guys, it doesn’t happen overnight.

The ads became worse. The only explanation is that the data is wrong. And then finally I put my foot down. I turned off all the video campaigns and the performance went up. And I was like, okay, this is very clear evidence that there is cannibalization. Yeah. I’m just going to play devil’s advocate because we’ve talked about having already an organic presence and the adding PPC needs to add value. I’m like, just because there’s a good ROAS doesn’t mean we’ve brought new customers in. But we know that the PPC placements are higher than the organic slots. So you could make the argument that yes, you’re there organically, but with Amazon trying to push more and more sponsored slots at the top, you actually lose that visibility, even though you might be ranked organic one to four in that first row of slots. And there’s the argument that people might not scroll below the fold.

So even though you’ve got that organic visibility, is there an argument for making sure that you’ve got visibility in those sponsored slots where someone might not scroll down to actually find that? Yeah. So very good question. At the end of the day, it’s going to matter when you do launch that sponsored product. So let’s say you wanted to test that theory out. You’re like, okay, I think that people are not making it below the fold. It’s simple. You just launched that sponsored product ad. You’re now on the top of search first page. How many more people came into the listing and how many more conversions did you get? So you say, okay, let’s test it.

Before I was making $500 a day. After I’m now making $600 a day, but I’m spending $100 on ads.

So you’re net even there, aren’t you? Exactly. And now here’s another case, right? And this is because what I’m explaining is maybe a little bit simplistic and it’s too idealistic, right? The other cases for main keywords, for example, I noticed that being in position one and two resulted in tremendously more people coming into the listing at a much lower conversion rate. And so we went from 100 people coming to the listing to 200 people coming into the listing. But our conversion rate went from 20% to 8% because like the quality of the people coming in from position one was very poor, especially on a main keyword, because it’s like a broad search. There’s still discovery versus when we moved it to position four, we had way better results versus when we moved it to position seven, we had even a better result. So this is one thing to keep an eye out for. And the hard thing is have to test, unfortunately, right?

You have to test. Yeah. I’m in position one.

I’m in position four. Now I’m in position seven. Where am I getting, you know, like that incremental growth at a decent ROAS? Because I don’t want to be getting, let’s say like, you know, $500 a day in sales at a 5X ROAS.

Now I’m 650 at a 3X ROAS. What was the point of it? At the end of the day, our game is to make profit. And you know, if you care about revenue and, you know, those vanity metrics, it doesn’t really help. At the end of the day, how can I increase my bottom line? That’s what’s going to make it to the bank. And then you have also the other cases, which is for very specific long tail keywords, ranking on position one, two, and three might be very good for you. Maybe if you’re actually organically positioned in seven, you’re right. They might just click on the sponsored one and then skip everything else because it’s very targeted. So that’s all of the different considerations you need to have when thinking about this. And I think you touched on a good point there.

You were talking about like the metrics we need to be focused on. It’s very easy to focus on revenue and your ACOS, your PACOS, your ROAS. We say that a lot of our advertisers and a lot of clients tend to get trapped in what we call a ROAS jail. They’re just so focused on the ROAS, but they’re not looking at everything else that’s coming to them. You need to look at your profits. You might have an incredible ROAS. If your profits aren’t going up or your profits are going down, who cares how profitable that one keyword is or that one campaign is if you’re not actually making any extra money from that. It’s about taking a step back and really taking a look at those KPIs that actually are relevant to your business. And I think people are definitely seeing a shift in what they focus on because I remember when I first started doing Amazon advertising, it was all about the ACOS or the campaigns. And I was like, okay, let’s take a step back and see how the spend is affecting organic sales as well.

So we moved to TAPCOS and then it was a growth profit. And that really was a game changer for our clients. Who cares if the ACOS has gone up 10%?

Your profits have gone up like 50%. Why does it matter if the advertising is less efficient, as you would say, if you’re actually making more money?

Does it matter? Exactly. Exactly. And I think a big part of that, because you’ve been through it enough times to see, okay, let’s go from ACOS to TAPCOS because you realize that. And I think for a lot of people, they never make it to profit. Like they make it to TAPCOS because all of us talk about it, but they never made it. Because it’s so difficult to completely detach and say, okay, everything in the middle doesn’t really matter.

You’re just tweaking knobs. What’s the outcome like? Let’s turn this a little bit up. Was it better or worse? Let’s turn this back down. Was it better or worse? And for them, it’s very hard to conceptualize that. Like how can you make decisions like that?

It’s very difficult. And the answer is iteration, you know, iteration, documentation, being very patient because I was very impatient. Every time I would listen to a podcast back in 2018, I would be like, okay, I heard this guy say this thing.

Let me change all of these things. And I would just change too many things and change my main image and my listing images and at the same time, do my PPC and all this stuff. And I was never able to make that connection between what I’m changing and the profits because the visibility is not there. Yeah. And that’s it. You never know which one of those levers you pulled was the reason why it improved or dare I say, actually got worse. I guess I come from an easier position when it comes to shifting which KPIs and going because I’m not a seller.

I’m on the advertising side. And I think sometimes the sellers and the clients think, well, it’s easy for you not to be focused on ACoS because it’s not your money. And you’re just telling me to be focused on midsection, whereas they want to see profitability at every single level. And it just doesn’t work like that, but yeah, we just need to get people profit focused rather than fat cost.

How do you guys do reporting? What metrics are you showing? We’re really focused on conversion rates and click-through rates and gross profit at the moment.

That’s our main thing. Like, are our conversion rates going up, are our click-through rates going up, and is the profit going up? It’s almost like, who cares what the ACoS is? Who cares? Well, I guess there’s some care of TACoS because you don’t want to be spending too much, especially if we’re talking about cannibalization. But yeah, it’s amazing how many people we’ve actually got to take a step back. I’ve gone on the days of people asking for like 20% ACoS, and I’ve got a fantastic client who’s willing to go to like a 45% ACoS now because he can see that TAPcoNs is coming down and his profits are going up.

And there’s lots of outside factors. It’s not just Amazon.

He’s like utilizing TikTok, he’s utilizing influencers. There’s a lot of positive things coming into that buy-in. He’s just not focused on ACoS because he knows there is a bigger picture now rather than just what’s happening in the campaign manager. And what happens in the campaign manager absolutely influences what’s happening on the organic side. It’s that whole flywheel effect, isn’t it? I know that’s a cheesy phrase to say because everyone uses flywheel, but it’s true. You turn one thing on and just keep everything spinning. You almost can’t come out of it at one point. I just had a conversation with someone, and this was funny. He was basically telling me they got into Walmart nationally. And so they started trying to push people to the Walmart store, and they ran a bunch of Facebook ads targeted, like geo-targeted certain stores and the people around them.

And they didn’t get any more sales in Walmart, but their Amazon sales went up. And I’m like, for everyone who’s on Amazon, this is what business really is like, right? You run a Facebook ads campaign, your Walmart sales go up because you’re trying to drive people to Shopify. You run a Facebook ads campaign or an Instagram campaign trying to go to Shopify, your Amazon goes up. You just have to be okay with understanding that there is a lack of attribution. And if you’re very segmented and target one thing at a time, everything will improve. You can’t force people to change their shopping habits. I’ll see Instagram ads, I’ll see Facebook ads, I’ll see any social media ads. But my first portal call is to then just go and treat Amazon like a search engine and look for that product or look to that brand. I don’t care where you try to vent me to, I’m going to Amazon because that’s what I know.

That’s exactly how I am. I’m the exact same thing. Yeah, that’s my job. It’s the same with my wife. She lives on Amazon and a lot of people have prime subscriptions. You can’t, like people are paying that prime subscription to get that free bit day delivery. Just because you’ve sent them to Etsy or a Facebook store or a Shopify store doesn’t mean they’re going to go there. They’re going to go where they’ve spent their money already. And if they’re going to get free next day delivery, sometimes it might cost them a dollar or two more on Amazon, but free delivery, you can’t beat that. Next day delivery. Yeah. It’s such a repeatable, like comfortable shopping experience.

I think that’s why people love it. And Amazon is a brand itself. You know that with that customer experience that if that sale gets messed up or the delivery gets messed up and it comes damaged, you don’t even have to deal with the seller. Just go to Amazon and they’ll fix it for you. It’s stress-free. My wife doesn’t even know who she’s bought from.

She thinks she just bought from Amazon. She doesn’t even know that there are sellers on Amazon selling. She thinks it’s just one big shop. I highly doubt there are other people that don’t think that same way as well. Another question here. If we have damaged our organic sales, how do we reverse that damage?

And how do you do that efficiently and methodically? Because you already talked about like turning off a campaign and seeing how much that actually damaged your organic sales and actually went down further than the spend and the sales that were coming from that campaign. So what strategies would you suggest to our listeners who think they’re suffering from like damaged organic sales? What can we do to reverse that damage?

When should you do it? How often should you do it?

So that you don’t actually… You’re talking damage as in they were cannibalized? Yeah, they were cannibalized in the organic sales. But like, what can we do so that any changes we make actually don’t do any extra harm? Because I imagine some people are going to be apprehensive about turning that campaign off. Yes, you might not cannibalize your organic sales anymore, but you actually might decrease them because you’ve decreased your exposure. Yeah, totally. Good point. What I would do is I would focus first on a sponsored brand, you know, video and display. Because I think that’s the biggest area of cannibalization. And first thing I would do is take one sponsor brand campaign that we’re spending, you know, let’s say $50 a day on, right?

That was $500 a month. And I would lower the bids and I would wait and see what happens to my total sales. And then I would lower the bids again and I would see what would happen to my total sales. And I’m not just looking at total sales, but I’m also looking at total spend, total sales, and then my total ROAS.

Because, yeah, maybe my sales did go down, right? And you know this, Tom, when you optimize for profits, you’re adding negatives, lowering bids. And that might result in your sales going down, but your profit will go up and you’re going to become more profitable because you’re now focusing your money more on the stuff that’s converting well, not on the stuff that’s not converting well. So it’s not just about total sales, but it’s like I was spending $1,000 a day and making $3,000 a day in sales.

Now I’m spending $700 a day making $2,800 a day in sales. Yeah, I lost $200 in sales because I lowered the sponsor brand, but as a result, I’m more profitable.

Yeah, you saved $250. Yeah, that’s the way to think about it.

The other thing is, if you’re doing this with sponsored products like regular PPC, I would start with the keywords where you’re very highly organically ranked and highly sponsored ranked, and then again, lower the bids and wait and see, lower the bids and wait and see. And it is painful. You’re going to have to be incredibly patient, unfortunately, but with enough patience, you will figure out, was the sponsor products, a campaign worth it by having them up high?

Or can I reduce them, reduce my ad spend? Your ad spend was $100, now it’s 50.

What happened to total sales? Did they go up?

Did they go down by $50 or did they go down by $150? If you lowered your ad spend by $50 and your sales went down by $50, that’s amazing.

You had a 1X ROAS on that ad spend, who cares? So that’s the way to think about it. And there is no way to do this. If you’re listening to this and you’re trying to do this for 30 keywords at a time, oh my God, I have a gut feeling that I’m cannibalizing, you’re going to hurt yourself. Don’t go with your gut, go with testing. Your gut helps in a lot of situations in life, it’s definitely not going to help when you’re talking about Amazon PPC. No, it’s data, data, data. Exactly. Exactly. And it’s one change at a time. Also please don’t lower sponsor product ads for a couple of keywords and then at the same time change your main image or go from a 4.3 to 4.2 stars or upload new A-plus content because you’re not going to know what’s happening.

So try and be very disciplined and it’s that careful changes, controlled changes that will result in you understanding what’s happening to the bottom line and then you have way more control. And another angle to come from, because I know that we’ve talked about keywords in general, is branded keywords. If we’re targeting our own brand, that’s obviously going to be something else that can potentially cannibalize those organic sales. Because if someone is searching for a specific brand, they’ve shown a high intent to purchase from that brand. If we’re searching for that, I guess they’re 95% more likely to buy a Coca-Cola than a Pepsi. There’s that chance that someone might go for the Pepsi because it’s 50% off and way cheaper than the Coca-Cola at that time of the search. We got any advice for anyone who might be too reliant on branded searches? Because there’s an element of wanting to protect your own brand name because there are going to be competitors out there bidding on your own terms and if someone’s bidding on your own terms, there’s that chance that they could win over a shopper. So there’s an element of us needing to defend that position by bidding on our own branded terms, but also acknowledging that if someone is searching for that, that’s actually what they want to buy anyway.

And they don’t care what they see at the top. They will scroll until they find that Coca-Cola. Maybe Coca-Cola was a bad example because they’re going to be at the top every time. I was just going to say, I love that you used the example Coca-Cola because a lot of people use examples like this, but no one listening to this podcast is Coca-Cola. So let’s say like someone’s looking for MMA nutrition, my electrolyte supplement, what happens when I don’t advertise and Liquid IV that has 100,000 reviews, four and a half stars shows up. I mean, I have 5,000 reviews, but yeah, you’re typing with my brand name, but it’s very enticing when you see someone else that’s better than you. So unless you are the best, honestly, my opinion and this cross the board, protect your brand name because if it’s not you, it’s someone else. And like, why take that risk? I get it. Right. Maybe you’re overspending a little bit, but for most of us, there is someone out there that is significantly better.

And we know we’re not the best seller. We might think we’re the best seller, but there’s someone right next to us with tens of thousands of reviews that is making a million dollars a month. And we’re not that. And so as a result, I would say always protect your brand name. Yeah. Thank you for that. Yeah. Wrong example with Coca-Cola, but I’m glad I mentioned it because you backed that up with an incredible point there. Are there any tools that we can use to track organic versus PPC performance or help us identify any organic cannibalization, whether they’re internal to Amazon or external third party tools? Because we’ve already covered like what metrics we should be looking at and tracking, but is there anything else that we can do to help us with that?

No, I don’t think there’s any tools out there. I think anyone that claims that they know the difference between PPC and organic is again, they’re lying to you because we don’t know that the data that Amazon is providing is accurate. Right. Because it’s the case of they clicked on an ad, they searched and they bought it again from a different computer, from a different ad.

Amazon didn’t catch it. There’s just so many examples of why that data could be inaccurate. And so when we’re looking at you, you have your spend across all of these individual campaigns and then only your total sales and your profits. The one thing that I would say is if you have an analytics tool, we have our custom built analytics. I know my real profit, you know, we’ll build it out, something like that. There’s other companies too, but essentially if you can see on a product level, your daily spend or your daily sales, and then all the way down to your conversion rate, your click through rate, all the way down to your profits per day. The only thing is it will allow you to see the data easier. So when you do these experiments, like what we do is let’s say we updated the main image, we’ll put a comment on that date and it’ll have a little color on it that says we updated an image there. So we’ll look and see, okay, the last seven days of click through rate and conversion rate and profits data versus the next seven days. And we can make a decision, okay, this main image was better. So that’s the only tools that you have out there, which is something that’s going to present to you like a SKU, not SKU level, but like parent ASIN level data clearly so that you can see spend, sales, click through rate, conversion rate, you know, profits.

But besides that, there’s nothing. And this whole cannibalization thing is going to have to be testing and looking at the data. I’ve noticed that in some of the automated optimization tools, I’m not going to name any names because that’s not fair and it doesn’t really help with my point, but there are some features where you can optimize your bids and budgets and even pause and unpause keywords based on your current organic positioning. Do you think that’s doing more harm than good to just decrease a bid because we’re in organic position one or completely pause a keyword if we’re in organic position one? And if we slip out of that position, the automation. enables the keyword or ramps the bid up again?Do you think we’re relying too much on just placement data without any kind of sales data and revenue data to back that up? Yeah, I think the problem with that is it’s an assumption that all keywords behave the same.

So that’s the problem number one. And then problem number two is it’s going to be significantly harder. I mean, it’s a good idea in concept, right? Like when you come like, you know, I praise these guys that did this because that’s a great idea, right? You’re ranked high organically, let’s drop the ads. But the problem is that you’re creating a generalization and you’re running that generalization on everything. Every keyword. That was my first thought. Yeah. Every keyword behaves differently, even to things like Helium 10 or Data Rover, whatever we’re tracking our keywords at ranking through.

We’re doing that against each individual keyword, aren’t we? Not just I’m rank one. Let’s stop advertising. You start influencing each individual keyword based on that rank rather than just looking at the beta. I’m glad you mentioned that. And Tom, let’s say that this is the case, right? Let’s say that, you know, you run this and it’s a good idea and you run this.

But then like we don’t know, right? Because what we can see is our spend and our total sales and profits. But what if in between that, like what caused the sales and profits to change is that you said, OK, when we reach a high organic rank, we’re going to drop the sponsored rank. So you drop the main keyword sponsored rank and you made more money there. But you drop the long tail keyword sponsored rank and you lost money there. And as a result, two different things happen, right? You lost money, you made money and then you look at the results and they’re very it’s very noisy. It’s hard to say that this worker does not work. And you are never going to get to like to that answer because you’re not segmenting enough. And then how you know, you can go you can go like all the way down to say, OK, if the search volume is twenty thousand to fifty thousand do this at some point. But again, at the end of the day, the hard thing is if you’re changing multiple things and then looking at one outcome, you can’t you can’t tell, you know what caused it.

You know what I mean? That’s the example that I always give Let’s say you’re a DJ and then you go on a DJ set and then you change six buttons and then the sound changes. Which one of those buttons or which one of them caused this? You know what I mean?

It’s the same thing. It’s the same thing. Yeah. Yeah. We’ve covered things like sponsored brands, but I want to bring up sponsored display. Can that hurt your organic sales? And also this is probably going off on a complete tangent, but I would love to get your opinion on BCPM campaigns as well. I have two loaded questions.

Let’s start with the BCPM campaigns. I’ve honestly had zero success with BCPM campaigns because being charged for just being viewed, it doesn’t align with Amazon as a as a platform. Right. Amazon as a platform is demand capture. So your target is someone’s has a demand and you’re trying to capture it and get them into your listing. And so serving them ads for the purpose of viewing just means that we’re not aligned in our goals. Right. My goal is not.

And that’s why DSP. Right. Our DSP rep will keep pitching our clients like Twitch and stream TV stream and all this stuff.

It doesn’t make money. So you don’t make money on views. We make money on people going into the listing. Yeah. And I don’t think someone on Twitch is doing it. And I guess the reason I went off on that tangent, because I don’t think it’s completely unrelated is we’ve been talking about how things have been attributed.

And I think the BCPM side of attribution is shady. I guess similar theories are raised about DSP. Though I think DSP is a lot more accurate than BM, especially with the merchant token links you can put in there. But we’ve had campaigns where we’ve reported to clients through BCPM said, oh, we’ve sold 100 units of this product. And a client will say, I’ve not sold any of those. So what the hell is BCPM talking about? But it’s actually an estimated sale based on the click and not even the click, but the view or potentially the click. But it also might’ve sold a completely different product that they just went down the rabbit hole and bought something else from the store. And it’s just becomes the mess, but it’s very easy to get really low ACOSs. And that’s the, I think once again, people get trapped in that ROAS jail by turning on a BCPM campaign. We had a difficult client that actually left after he built his own BCPM campaign in our account and they had incredibly low ROASs.

He thought he was making tons of money from them and I’m doing a better job than you. And I was like, oh my God, what have you done? Spending tons of money and making no more money thinking that he’d done a better job. We just couldn’t, we couldn’t argue with the guy. You’re going to have to learn this mistake yourself. It’s funny that you said attribution is shady.

What’s that new program? It just came out, I think six months ago where you can see the path of the customer, which adds they clicked on, which resulted in the sale. Oh, the path to purchase. I can’t remember the name of the program. The path to purchase. We can see that through Amazon Marketing Cloud as well, can’t we?

Yeah, it’s through Amazon Marketing Cloud. Here’s a funny thing. I was one of the early people to see it. This is because we have a relationship with a brand that’s doing, I think 100 million on Amazon, in that range, right? Close to a hundred million. And they invited them to the program and then they did this whole presentation. And so he said, Mina, you’re better than us at advertising.

Please sit in. So I sat in, I didn’t say anything, didn’t say who I was, what I did. And they were talking and they gave this whole presentation and sent a Slack message to the guy. And I said, I bet you by the end of this call, they’re going to say that the path that has the best purchase, best ROAS is the one with the most ads. And then by the end of this call, they’re like, this is the one that gives you the best. And it was the one with the most ads.

Come on guys, you think we’re stupid? And so this is the problem that I think a lot of people haven’t seen the reality of. There’s a lot of misinformation in the numbers and people just haven’t caught on yet. They’re like, oh, I trust Amazon, whatever they’re telling me. I’m like, I can trust the ad spend because it comes out of my credit card. I can trust the total sales because I see it in my pay statement. And you can look at the fees and you can break that down, but everything else in the middle, you can’t really trust it. That’s it. Amazon are a business as well. They want you to spend to make more money. They’re going to recommend the ads that just spend money easily, whether that’s sponsored around or sponsored display, where you’ve got less control over where that’s going. Yeah. You asked me about sponsored display cannibalization.

I do also believe that there is a level of sponsored display cannibalization because we’ve turned on sponsored display campaigns, for example, retargeting and remarketing. And this is definitely going to be a high ROAS. They’re going to bring more customers that wouldn’t actually convert. But again, all it did most of the time is racked up a bill for ads. We would run these things for a month. And then at the end of the month, I’ll say, okay, guys, show me the numbers.

We spent 30,000 on PPC last month, and this much was our sales and profits. This month, we spent 30,000 on PPC, 5,000 on, sorry, sponsored products, and then 5,000 on sponsored display. And this is our revenue and our revenue hasn’t changed. It looks like it’s hard to tell because you have these months.

September was 78,000. October was 82,000. November was 79,000.

And I can’t tell if it did anything. Yeah, exactly that. I’m interested to see how you do use sponsored display because we do a lot of DSP.

That’s where we rely on it. That’s what we rely on for our remarketing because it’s so much easier to stack up the audiences. You know exactly who you’re targeting. You can negate all those people that you know have already purchased or purchased a competitor.

For sponsored display, I’ve used that for defense and offense. If I want to make sure that I’m defending my listing under the buy box, under the bullet points, so there are no competitors there, I’ll employ a tactic where I’ll potentially show a different size or a different color or even something I can cross sell with. And then I might attack a competitor. So I’ve got my cheaper, better reviewed, better rated product, better quality hopefully product on their listings. Are there any other ways that you would use sponsored display? No, I think you covered it perfectly.

But I do have a question for you. So when it comes to DSP, DSP is pretty much the same as when you’re looking at sponsored brand or sponsored display. It’s an additional type of advertising. It’s even more difficult because it lives in a different platform.

Yeah, completely different entity. How do you guys combine your PPC and DSP spending and sales in one dashboard? Are you doing it manually in a sheet and then it gets put into some? It depends on the level of the client and how much they’re spending. The smaller ones will combine it in a sheet that we like, we know what we’re spending, where we’re spending. It difficulty becomes when we’re managing DSP and another agency is doing PPC. That means a lot of meetings need to happen and you can’t necessarily always agree on coming up with a dashboard. But for our biggest spending clients, we’re using some dashboards built through third-party Amazon Marketing Cloud providers. So there’s one that we use called XPN and they’ve got their own dashboard and we’re able to see exactly where every single cent is being spent through a PPC, through DSP, where that path to purchase is and making sure we’re not just relying on those ad types that are the ones that appear everywhere and cost more and have more placements. And that’s to be trying to drill down so it’s not just the path to purchases.

DSP, DSP, DSP, DSP. After seeing one sponsored ad, so we’re trying to find that most efficient path. So yeah, it can vary from client to client, but the biggest spenders get that treatment on XPN’s dashboard. Yeah. I was just wondering because for us, it’s how granular do you get? Because I want to see PPC spend and DSP spend and see as I change one, what happens to the blended ROAS and start with an 8X blended ROAS and then when, let’s say when DSP is zero and then you’re down to a 6X ROAS, but what happened to total sales and what happened to profits? And so for me, it’s really how do I combine because the equation is your sale price minus your Amazon fees minus your cost of goods sold. That’s your profit per unit times number of units you sold.

That’s your total profit every day minus your ad spend. Now you have to do minus your ad spend minus your DSP spend as well. And so figuring that out is not the easiest. Yeah. And another angle we’re coming from with DSP at the moment is trying to work out what other KPIs are valuable because there are hundreds on DSP, some that I don’t even use, but it’s also very easy to get trapped in that ROAS jail that we keep mentioning. But one I’m looking at is the overall cost per acquisition of that customer of that product. Yes, it might cost me more to run those DSP ads, still mop up those conversions that didn’t happen. Hopefully they’ll convert within the next seven days because of my look back audience on DSP. But there’s always that argument of, did I need to do it? Is it already in their brain that they’re going to purchase it anyway?

Maybe they’ve written it down on a notepad. Maybe it’s still saved in their shopping cart. We just don’t know all of that information. So it’s looking about what influence us running DSP has on the overall cost for acquisition. If the ROAS is slightly under target, we’re trying to argue, does it matter at the moment if your cost per acquisition is coming down because you wanted to get that sale and you didn’t get that sale through PPC. We’re coming in with DSP to finalize that sale. How much does that end up costing overall? And if the cost per acquisition comes down, in theory, it’s been beneficial. Yeah. Yeah. That makes sense.

Looking at cost per acquisition is definitely a good metric to track. Is your advertising actually helping or not? Yeah. Yeah. In theory, everything should be cheaper in time, right? You want to get all the organic sales and spend nothing on advertising.

But that’s a dream. That’s a dream. It’s got a few more questions to go through. This might be a less field question, and I don’t know if there is an answer to this, but are there any particular industries, any categories, subcategories, or types of products where PPC is more likely to cannibalize organic sales? And so how can these be handled differently? That’s a tough one. I honestly haven’t seen enough data to say one thing or the other when it comes to industry.

Have I seen enough? I usually see the same across all industries, but I haven’t seen enough evidence to say at one industry, this happens more than another. So I don’t want to say something that’s that accurate. Yeah. Fair enough. And I don’t even know if I’ve got the answer there because the main things I’ve noticed where it seems to be easier to cannibalize is when there is a strong brand presence and someone already is aware of that product and they know what they were looking for.

We’re almost wrapping up with this episode. So it’s always good to leave with some key takeaways. So we’ve talked about so many different things with the organic cannibalization, whether that campaign type, ad type, budget, or keywords we’re going for. But it would just be great if we could leave our listeners with three key things to monitor to ensure that we don’t damage our organic sales. Yeah. What would they be? When someone is starting out and they can keep an eye on these three things to monitor ahead of setting up their, or even their account to begin with, or if they’ve been advertising for eight years, what things can they start looking at today to see if they’re damaging their events? Yeah. I would say, number one, look at your spend, sales, and profits every single day. Most people are living in campaign manager and they’re not looking at their profits. Make sure that you’re tracking your conversion rate as well as the rate, because as you increase sponsored brand by spending more money on sponsored, what could happen is you could be getting lower clicks rates and conversion rates because certain positions are getting window shoppers.

So that would be the first thing. Second thing is using keyword tracker. I definitely think keyword tracker is super useful because you can see your sponsored rank and your organic rank at any point in time. And then the final thing would be overlaying the two. So have a tracker for, I would say, the main keywords that you’re pushing. You can see your organic rank and sponsored rank at any day and how much money you’re spending on those keywords. And feel free to adjust the spend, drop the spend, and then look at your profits and say, okay, I dropped the spend.

What happened to my profits? I increased the spend to my profit. At the end of the day, it is really, it’s a profit game. It’s not a revenue game or a tacos game, profit game. And when you’re scaling and you’re trying to discover new keywords or testing, I don’t know if Mina’s theory is right or wrong.

Let’s test it. Cool. I’m going to go and increase the bids on these keywords that show up high sponsored and organic. That’s fine. You’re in a scaling phase, a testing phase, and your profits will dip. But once you have that data, you shouldn’t be scaling down things that didn’t work and realizing that higher amount of profits or else you’re yo-yoing and higher, lower, higher, lower, higher, lower, and never really appreciating the profits. So I would say if you’re scaling, that’s fine. And then optimize after the learnings and then sit in a profitable state and then try and improve your click-through rate and conversion rate during those periods. Because for the same advertising and everything, you can have more profits by increasing your conversion rate by 1%, for example. Brilliant. Thank you so much.

And it’s been a pleasure having you on our podcast, Mina. I know it’s the first time and hopefully it’s not the last time. If there’s anything else you want to plug, I know that you shared your socials and where people can find you at the beginning of the podcast. But if you’ve got any deals or any offers that you want to share with our listeners that they can benefit from, feel free to plug away. Oh, yeah, definitely. So if you guys visit the website, TriviumCo.com, we do give a full audit and strategy. So it’s not just an audit telling you what’s wrong with your account, but more like here’s the areas of opportunity.

Here’s how to capitalize on them. It’s a whole plan. Just click on the get a free audit button.

The website is TriviumCo.com. TriviumCo.com. Brilliant. Thank you so much, Mina.

So we hope you enjoyed this episode. As always, please do share the link to our podcast with friends, family, peers, and colleagues. And if you or someone you know is interested in having us or Mina work on your advertiser account, book a call with us through our website, ClearEyesAgency.com or visit TriviumCo.com to get in contact with Mina. And I’m sure both parties will be more than happy to hear from you and help you. So until next time, thank you very much.

That’s bye from myself and goodbye from Mina. Bye guys.

Title: Episode 66 – Understanding the Impact of PPC Advertising on Organic Sales on Amazon

Introduction: In this episode of the Clear Ads Podcast, Mina Elias, the founder of Trivium Co., provides valuable insights into the intricate relationship between PPC advertising and organic sales on Amazon. The discussion sheds light on the often overlooked misattribution of PPC sales numbers and the need to consider total sales for effective optimization strategies.

Main Theme: Mina Elias emphasizes the critical impact of PPC advertising on organic sales, debunking the inaccuracies in PPC sales numbers and the resulting misattribution. He advocates for a comprehensive approach that considers the interplay between PPC and organic sales, ensuring that PPC efforts do not harm organic sales. The conversation delves into techniques and strategies essential for maintaining a balanced approach and effectively analyzing PPC spend at various campaign levels.

Key Points:

  • Misattribution of PPC sales numbers and the necessity of considering total sales for optimization.
  • Techniques to prevent PPC from negatively impacting organic sales.
  • The significance of analyzing PPC spend at different campaign levels.
  • Exploring the concept of cannibalization and the primary goal of Amazon PPC to enhance visibility.
  • Timing considerations for the launch of sponsored products on Amazon.
  • Emphasizing the shift towards focusing on profits over traditional metrics and the importance of key performance indicators and consumer behavior.
  • Strategies for efficiently reversing damaged organic sales.

Conclusion: Mina Elias’ in-depth discussion provides a comprehensive understanding of the complex dynamics between PPC advertising and organic sales on Amazon. Listeners gain valuable insights into strategies that not only optimize PPC efforts but also safeguard and enhance organic sales, ultimately driving profitability and sustainable growth.

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