Retailers Face Budget Decisions as Amazon Retires Product Ads

August 11, 2015

Marketplaces ChannelAdvisor By ChannelAdvisor

Amazon recently alerted existing advertisers that they will no longer offer the popular Amazon Product Ads advertising format after 31 October. Advertisers were notified by email and were directed to a Seller Central FAQ page for more information. Amazon did not provide any additional insight into the decision to sunset the image-based ad format. However, they did use this announcement to introduce a new advertising format, Amazon Text Ads, as a possible alternative for retailers. The curious timing of the announcement will likely put some advertisers in a bind, as most Christmas advertising budgets have been approved and allocated.

Similar to traditional product listing ads found on comparison shopping sites and search engine results pages, Amazon Product Ads had become a popular option with retailers. Product Ads allowed retailers to serve image-based ads to customers shopping for specific products and actually drive them back to their own website instead of requiring shoppers to complete the transaction on Amazon.

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You Have Options 

If you’re currently advertising with Amazon Product Ads, you still have some time to decide how you’re going to reallocate your efforts. Fortunately, there are plenty of options available.

  • Stick Your Toe in the Water – Within its communication to advertisers, Amazon revealed that it is testing a new advertising format, Amazon Text Ads, as a potential alternative to Amazon Product Ads. Amazon describes the new format as a “pay-per-click advertising solution for creating and running texts on Amazon.” It then goes on to mention that the ads will drive traffic back to your website when clicked. It’s safe to say that switching to a text-based ad format, after using an image-driven format, may not be ideal for some advertisers. However, Amazon Text Ads will provide advertisers with an opportunity to reach an audience in purchasing mode, and then drive these shoppers back to their website for the conversion.
  • Sell, Sell, Sell – Depending on your current selling strategy, your decision may be as simple as selling your products on Amazon’s Marketplace and using Amazon Sponsored Products to promote your product listings. While you will lose some site traffic, as all transactions will occur directly on Amazon, you’ll make up for it with additional sales.  
  • Stake Your Claim – Each of the major search engines gives retailers the chance to own a valuable piece of online real estate with Product Listing Ads. Whether you’re just beginning with Google Shopping or looking to reach new audiences with Bing and Yahoo, your products will be front and center with customers when it matters most. 
  • Create Second Chances – Nothing is worse than losing a customer who is ready to check out. Recapture those cart abandoners with Facebook Dynamic Product Ads. This new retargeting feature allows retailers to serve relevant product ads within the Facebook news feeds of previous site visitors, no matter the device type being used.

Though the Product Ads sunset is a couple of months out, we’ll be here to guide you as you determine how to best allocate your advertising budget for the greatest ROI. Stay tuned for an upcoming blog post where we will outline our recommended transition steps and review the new Amazon Text Ads format in greater detail.