For many consumers, joining Amazon Prime is a no brainer. From free 2-day shipping to unlimited movie and TV streaming, Amazon Prime offers its members tons of benefits that make our lives easier.
Prime Pantry is one such benefit that maximizes convenience and cost savings for consumers. Prime Pantry offers grocery and household items in every day pack sizes (a single box of cereal or a single tube of toothpaste). Amazon ships these items to the consumer in the same box. This means that Amazon can offer free shipping for thousands of lower price point items that typically could not be shipped for free individually.
Consumers pay a monthly fee of $5.99 to get unlimited free shipping on Pantry orders, or a flat $5.99 shipping fee on individual orders if you do not order more than once a month. There is also a $6 coupon applied to your order when you add five or more items to your basket. And, Prime Pantry orders of $35 or more also qualify for free shipping.
This makes Prime Pantry unique because its consumers are in “basket building” mode. They are seeking items to fill their basket and qualify for the coupon and free shipping.
In turn, this creates a shopping experience rife with advertising opportunities.
Prime Pantry & driving trial
Because of the consumers’ basket building mindset, Prime Pantry offers particularly value to brands who are trying to drive trial and introduce new consumers to their products.
Consider a CPG brand that sells their smaller pack offerings through Prime Pantry, and their larger pack offerings on Amazon.com.
The customers buying the larger pack offerings on Amazon.com are likely brand loyalists, lapsed-buyers, or consumers who are, at the very least, aware of the brand.
The shoppers buying smaller packs through Prime Pantry are more likely to be basket building and trying a brand for the first time. This makes Prime Pantry a great way to drive trial and expose new consumers to your products.
So what’s the catch?
Through Amazon Advertising, brands can promote their Prime Pantry ASINs (ASINs, or Amazon Standard Identification Numbers, are blocks of letters/numbers that uniquely identify items on Amazon) just like any other product offered on Amazon.
However, several challenges make promoting Prime Pantry ASINs tricky:
- Prime Pantry items have a low price point, leaving less margin to turn a positive Return on Ad Spend (ROAS). Most Prime Pantry items are priced under $10, which means there is limited margin for your cost-per-click bid. If you try to promote a Prime Pantry ASIN using Sponsored Products Manual Keywords Targeting, the competition is often so high that your keyword’s average CPC will be 25% or 50% of your item price, sometimes even more. At that price, you would need a 50% or higher conversion rate to turn a positive ROAS. Yikes.
- There is no way to segment your Sponsored Products keyword impressions to only serve within the Prime Pantry environment. This means that your ASINs will also be promoted on standard Amazon.com search queries, and users searching on Amazon.com have less intent to purchase Prime Pantry ASINs than those who are searching within the Prime Pantry environment.
How do I make Prime Pantry work for me?
Product Display Ads (PDAs) are the answer! PDAs’ Product Specific Targeting option allow advertisers to effectively reach consumers who are basket building and shopping in Prime Pantry’s unique environment.
In my experience, PDAs are the least-utilized Amazon Advertising campaign type.
This is likely because it is the only campaign type that does not feature keyword-based targeting. The targeting options for PDAs are interests/categories and specific products. However, this is what makes PDAs great for Prime Pantry.
With PDAs’ Product Specific Targeting, you are bidding for a placement that is a specific ASIN’s product detail page (PDP), right below the buy box. Targeting Product Specific PDPs allow for a lower CPC than keyword-based targeting methods, and a higher conversion rate since the user’s goal is to fill their basket.
Strategies for using PDAs’ Product Specific Targeting
So, how does this all come together in practice?
Luckily, I’ve had the opportunity to test this approach in the wild and have found that it leads to very positive results.
Working with CPG and manufacturer advertisers, I’ve found that it increases the advertisers’ visibility in Prime Pantry.
And, compared to Sponsored Products keyword-based targeting for the same ASINs, I’ve seen lower CPCs, higher conversation rates, as well as significantly better ROAS and Advertising Cost of Sales (ACoS).
There are also multiple ways to apply this approach. You can use several different strategies with PDAs’ Product Specific Targeting to drive trial and grow sales. For example:
- Upsell: Try to upsell users searching on a smaller pack to a larger pack offering from your brands’ products.
- Conquest: Target your direct competitor’s PDPs to convert consumers and grow category depth.
- Basket Building: Target products from related categories to encourage basket building and trial.
- Brand Protection: Target your own brands’ PDPs to protect against your competition promoting their products on your brands’ PDPs.
More on PDAs
Lastly, it’s important to note that, historically, non-keyword-based targeting capabilities were available only within the Product Display Ad (PDA) campaign type. But in early November 2018, Amazon Advertising introduced these targeting features to the Sponsored Products campaign type as well.
In the past, PDA campaigns also had some pretty serious limitations.
For example, there was a lack of individual target bidding, target level reporting, and the ability to optimize the campaign with negative target exclusions.
Fortunately, all of these limitations have been addressed in the November 2018 update with the recent addition of these targeting capabilities to Sponsored Products.
Craig DeTora is a Senior Paid Search Manager at Catalyst where he specializes in driving the Amazon Advertising strategy and execution for some of Catalyst’s largest CPG and ecommerce clients.
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