Optimize Your Amazon Ads Strategy By Knowing The Impacts Of The Product Life Cycle

In many ways, the evolution of your Amazon business and the products within your mix mirror the growth you should consider when determining how to allocate funds to your Amazon ads strategy. The budget you should set aside for advertising in each lifecycle stage is very different because you have other goals for what that budget will do for your business. Accordingly, the metrics you need to measure to determine the success of that spend – and whether you’re getting a solid return on your investment – also vary quite a bit.

We’ve all seen viral products defy the Amazon product life cycle altogether. These products go from entirely unknown to the next viral sensation, seemingly overnight, riding the wave of their unique utility, novelty, and social media acclaim.

When you’re evaluating the long-term viability and sustainability of your products, there are four lifecycle stages to consider:

• Introduction
• Growth
• Maturity
• Decline

Your product pricing strategy and the way you allocated funds for advertising vary quite a bit during these stages. When you’re able to develop a pattern and a system for your strategy based on this, it becomes much easier in time to react quickly to the curveballs thrown at you along the way.

Let’s take a look at each of the stages in some detail.

Once you’ve established some initial demand and people are starting to purchase your product consistently, you move out of the introduction stage into the growth stage. As the number of reviews of your product increases, your sales volume increases as well. Sounds great, right? Well, not entirely. With success comes imitation. So this initial success will more than likely be met with well-established players in your niche also starting to sell your product (or if you’ve white-labeled something – trying to knock it off.)

That said, you’re still in the driver’s seat because you were the first to market your product. Therefore, demand is still working in your favor, and it’ll take the competition some time to catch up as long as you stay nimble and continue making smart decisions. The risk of sticking with this product is low at this point, and you still have a step up.

As we all know, however, that relative comfort doesn’t last for long.

Much like there are four stages in the traditional product life cycle, there are three stages in the Amazon PPC advertising life cycle.

Here they are:

• Launch
• Maintenance, and
• Profit

The decisions made during these stages can change the trajectory of your Amazon business, for better or worse. It’s very important to consider how to optimize your ads as your product moves through the life cycle to make sure you’re not spending recklessly and your spending is serving the purpose you’re intending.

Let’s take a look at each of the stages more closely.

While there may be light competition in your niche and you’re gaining some quick word-of-mouth, that doesn’t mean this organic traction will be enough for you to maintain momentum. Every successful Amazon product has a marketing foundation built on a combination of organic attention and well-crafted PPC campaigns.

When to kick off your advertising campaign during the launch stage, the timing of when to kick off your advertising campaign can vary somewhat depending on the type of product you’re selling and the inventory you have available on hand at launch. If you have stock on hand to sell at launch – and the level of competition is low enough in your niche – you should consider launching ads from the outset!

It’s a great way to get some early traction from the knock-on effect the ads will have when aligned with your other traditional marketing methods, including email, social media, and the like.

If you’re in a market that’s a little more saturated and competitive, it’s probably a good idea to hold off on triggering an ad campaign until your products have some reviews.

Advertising during the launch stage is an experimentation ground. You should be experimenting with different types of ads, different durations, different volumes of spend, targeted toward various audiences to see what drives the results you seek.

Just like in the Introduction stage of the traditional Amazon product life cycle, the goal is awareness. Without awareness of your product, nothing else matters. Once you have understanding, you can tweak your ads to optimize for what you want to pay per click and drive the click-through rates you need to achieve to ensure consistent sales.

If you’re positioning these ads correctly, you should be armed with a ton of actionable data. You’ll see which search terms had a high volume of impressions. Those signal the keywords that are worth you chasing in future ad campaigns. Click through rates for keywords will let you know what your market cares about, and conversion rates on those clicks start to paint a picture of the funnel you’ll need to work from as you move potential customers from awareness to interest, to decision, and eventually to action (purchase).

Consistent sales during the launch stage allow you to grow and eventually have a mature product that can be a healthy part of your product mix.

Once your product has been in the marketplace for a few months, you’re moving out of the introduction stage of the life cycle and into the growth stage.

You have plenty of data at hand, and your product’s detail page has more than likely been through several rounds of iteration. These iterations have given you strong gut feelings about your product and the right marketing mix that will allow it to continue to mature.

You’ve established a solid product-market fit, and you’re actively using the keywords which have been identified as unique to your product, powerful in eliciting a response from your target customers and leading to conversions.

At this point, your product pages serve a dual purpose as a showcase for what you’re selling but also a destination for your advertising campaigns. A great strategy during the maintenance stage is to build campaigns that point directly to your product pages, as you’ve built up enough of a presence in your niche at that point to be competitive in doing so.

During the maintenance stage, you’ve learned what you need to know about your product. Any new data that comes along won’t change what’s obvious. Given that the goal is continued, careful optimization of your ad campaigns combined with slow but steady scaling of your spend, so your growth remains incremental but predictable. This total growth is the key to moving into the maturity stage of the product life cycle, where the real magic can happen for your bottom line (even though the challenges will also be more substantial.)

Like any other platform which earns from advertising, Amazon will be more likely to start to reward you with the organic rankings you want for your primary keywords the more you scale your campaigns. When this spend is properly targeted and your CTR aligns with the conversion growth you’re seeing, the idea of organic reach at some point offsetting (or at least becoming complementary to) your paid reach doesn’t seem like such a pipe dream!