Features
Understanding the Amazon Buying Journey is the foundation for successful advertising on the platform. Let's take a step-by-step look at what happens from the moment a shopper enters Amazon to the point they make a purchase, and how your ads play a role in this process.
First, a shopper goes to Amazon and begins their shopping experience by entering something they're looking for into the search bar.
This is the search term, the exact words the customer typed into the Amazon search bar. The shopper is then taken to a page filled with products relevant to that term, known as the search results page. Think of it like a virtual shopping aisle where the top shelf products are at eye level, and nobody really looks at the bottom shelf.
These results, or product listings, offer a short preview of each product, including an image, rating, and title.
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Amazon ranks these listings based on various factors, analyzing billions of data points, like the product’s historical sales or the customer’s previous interactions. Generally, products that Amazon deems more likely to be purchased are placed nearer to the top of the page.
Why? Because shoppers click on products at the top of the page far, far more frequently than those at the bottom, or on subsequent pages.
Once the shopper sees a product that they like, they click on the listing to learn more about the product, and they land on the product detail page.
This is the product’s landing page that contains all of the detailed information for that particular product, including the buttons to buy the product. The product detail page includes product images, description, customer reviews, model numbers, pricing, product variations, and more.
This is the page the shopper learns more about the product, reads reviews, and decides ultimately whether to buy it or not.
Here, our mystery shopper adds the product their cart, finalizes their shipping and payment information, and places the order. This completes our Amazon customer’s shopping journey.
Let’s quickly review.
Now that we've understood the general buying journey, let's see how advertising fits into this picture.
Just as before, a shopper types in a search term and is taken to the search results page. And of all these product listings, many are ads, also known as paid listings. The listings that aren’t ads, are called organic listings. They show up naturally with Amazon’s ranking algorithm. No artificial ingredients or paid shortcuts. The farmers' market of Amazon, if you will
Paid listings are ranked similarly to organic listings, but with an additional key factor: the amount the advertiser is willing to pay to appear on the page.
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In the blink of an eye, as the search results page loads, an entire auction unfolds, similar to the fast-paced bidding at an art auction, but without the fancy hats and gavels. Amazon uses the bid you set for your ad to determine where your ad ranks in this auction. Well… sort of, but we’ll cover bidding mechanics in more detail in later video.
An impression is counted each time your ad appears on a search result page. Even if it’s at the bottom of the page and the shopper doesn't scroll to where they can actually see it. If the ad was rendered on the search results page, it's still counted as an impression in your ad console.
Up until this point, none of the advertisers on the search results page have paid any money for their ads to be seen. The advertisers have only said what they’re willing to pay if someone clicks on their ad.
This is because Amazon uses a Pay per click, or PPC model for their ads. In PPC advertising, advertisers are only charged when some clicks on their ad. It's like a free billboard that only charges you when it works. There’s other advertising models that exist, but Amazon almost exclusively uses the pay per click model for their advertising, with only a couple exceptions, so we’re only going to focus on the pay per click, or PPC model in this series.
Let’s get back to our shopper -
They land on the search results page filled with both paid and organic listings. The listing that catches their eye has a small “sponsored” label above it, and they click on it. Now we’re getting into some significant metrics
Amazon now charges you for the clicks, triggering that click to be added to your clicks metric inside the ad console, and the click cost to be added to the ad spend column.
The metric that shows the percentage of shoppers that clicked on your ad after seeing it is known as the click through rate, or CTR. It’s calculated by dividing the total clicks by the total impressions, and multiplying by 100 to get the percent.
The click through rate can be a useful metric to gauge how well your ad is standing out from the competition.
A high click through rate means your ad is attracting a lot attention and enticing shoppers to click to learn more about your product, while a lower click through rate might mean that it needs some optimization, such as better product images, a different title, or more reviews.
After the click, we know the drill - they land on the product detail page, and possibly buy the product. If they buy the product, this is known as a conversion. They converted from a shopper, to a buyer.
The percentage of clicks that result in a conversion is known as the conversion rate, a crucially important metric when it comes to Amazon bidding.
With the purchase, an order is attributed to the ad in the ad console, and the revenue from the sale adds to the sales column. If these terms seem overwhelming, don’t worry. This introduction is just the beginning, and we'll cover them in more detail later.
With their new product on the way, our shopper has completed the Amazon buying journey. Like a modern-day fairy tale with a happy ending for both the shopper and the advertiser. With this understanding of the Amazon buying journey and how it relates to your advertising, you've grasped the essentials.
