The purpose of advertising on Amazon is simple: increase traffic and conversions. And a key way to do that is to optimise your ad strategy, based on current ad data and performance results like your return on ad spend (RoAS).
In theory, your RoAS number tells you how well you’re maximizing your ad spend on marketplaces like Amazon. But traditional RoAS numbers tend to inflate your performance and cause you to overspend on your ad strategy.
With best-in-class software and technology, Pattern helps brands improve their Amazon advertising strategy and results by providing them one simple metric: true RoAS.
Why Traditional RoAS is Inaccurate
To understand why true RoAS is helpful to brands, let’s talk about how Amazon and other agencies traditionally calculate and present RoAS.
It’s common to see ad spend numbers inflated by cannibalisation. For example, let’s say you’re selling probiotics. You may be paying for sponsored ads to win the top placement for the keyword search “probiotics for women.” But, if you’re already ranked in the top organic results with the same keyword, you probably would have gotten the click anyway. Paying for a top ad placement spot when you already have one is cannibalisation.
Another way brands cannibalise their ad spend is by overspending on optimizing branded search terms for their product listings. Consumers that search your brand by name are already highly likely to click on your listing and buy your product. When Amazon and other SEO agencies include this traffic in their RoAS reporting, the score looks much better than it would be without including branded search terms.
Understanding True RoAS
At Pattern, we’ve created proprietary acceleration software to truly optimize Amazon ad spend. Pattern’s patented tool applies artificial intelligence to the advertising process to maximize incremental growth, or true return on investment, rather than causing brands to overspend by cannibalizing organic sales.
Our software helps brands optimise their efforts by providing live and updated information on your product listing’s keyword performance. We show the keywords your product is not organically ranking for and the ones that you can conquest and overtake for your brand.
If your ranking improves in one area, the ad spend will automatically decrease for those words or phrases until the software detects a drop in ranking, signaling that your ad spend should go up again. This dynamic ad spend monitoring will help you save money while maximizing incremental growth and improving your RoAS.
Optimise Your Amazon Ad Strategy with Pattern
Knowing your true RoAS is key to improving your Amazon performance. Advertising agencies and marketplace account managers often give you an inaccurate RoAS ratio or value, which incentivizes you to spend more on advertising, increasing their revenue rather than yours.
With Pattern, a 3P partner on Amazon and other marketplaces, we view our brands just as that: a partnership. When you win, we win. You succeed on Amazon by maximizing your ad spend and we have the data and resources to help you do just that. Accurate, transparent data and reporting will help improve your advertising strategy to drive more traffic to and conversions on your products.
Ready to finally get your true RoAS? Contact us.