Allume Group

A version of this article was originally published on Ad Exchanger.

We are witnessing the rise of retail media networks designed by major retailers to deliver a targeted, personalized experience to shoppers. Walmart, CVS, Amazon and others are putting resources behind this trend, and marketers will need to sharpen their approach by addressing multiple critical factors, including their relevance, keyword targeting, negative targeting, and the shopper’s buying journey to be successful.

It can be daunting, but a thoughtful approach will pay big dividends.

Keyword Relevance – Be Strategic

Keep ads relevant. At a minimum, the ad should feel like a natural part of the search and browse experience. But ideally, the ad should feel useful and time saving, as though the right product is being presented at the right moment.

Highly sophisticated ad platforms like Amazon won’t even let you “win” keywords that are not relevant to your product. Relevancy is literally built into the algorithms. In some instances, a maker of cellphone cases isn’t even allowed to win bids on terms like “toilet paper.” A manufacturer might want to do this to capitalize on traffic going to a specific category or item. For example, an unrelated brand, such as an electronics item might decide to bid on “face masks” (a top-searched term on Amazon’s platform) during the COVID-19 pandemic to expose their product to significant amounts of traffic.

This kind of policy reduces the possibility of gaming the system and also forces ad buyers to be highly strategic and careful in their decisions.

Think Like a Shopper

Sellers should bid on the kind of terms shoppers actually use to search products. Think about the broad category and then drill down to be as targeted as possible. A common mistake is bidding on keywords related to the brand’s marketing copy. Customers search on their needs and problems, and advertising keyword strategies should align to this. This often means focusing on needs-based searches (“dry skin”) vs. solutions-based searches (“radiant skin”).

In addition, on more sophisticated retailer ad platforms such as Amazon, the more relevant the search phrase is to your product, the lower your bid amount will be.

It’s important to target where the customer is in the decision-making funnel. While customers expect to see ad content on, say, a category home page on Amazon and Walmart (middle funnel), it would be difficult to sway a customer making a very specific or branded search with an ad for a different, out-of-category product (bottom funnel).

For ads that appear deeper in the search journey, like on a product detail page, targeting is paramount. Ads can be more useful to shoppers when the content is tied to something they bought in the past or is related to a frequently visited category on that site (as opposed to something they have never shown interest in). An ad that shows a quote from a customer review or something else that helps inform a purchase decision will be much more effective than the sudden appearance of an unrelated product.

Also, an ad showcasing your product’s unique ingredient or other special feature can, at this point in the sales funnel, be extremely effective.

Understand the Platform

All the major platforms have their own nuances. And they wield enormous control over which ads are seen and how. Understanding them enables sellers to take best advantage. For instance, “negative targeting” on Amazon filters out search phrases that include your search term with unrelated search terms (making sure your bid for “butter” doesn’t show up when a customer searches “Peanut butter.” doesn’t allow out-of-category advertising at all, and an advertiser cannot win an ad slot if they aren’t already on the first couple of pages of search results. Instacart offers high-performing targeting that are unique to consumable items and grocery delivery, such as “buy it again.”

Additionally, if there is a product that someone is unlikely to buy more than once, like a coffee maker or toaster, don’t keep advertising that product to them. At best, that kind of ad is irrelevant and much more likely to cause annoyance and negative perceptions

Know Your Competitors (and Yourself)

Brands need to think of search in the same way customers do. A recent search for “peanut butter” on Amazon yields 48 results, half of which are either not peanut butter (crackers, cookies, candy, etc.) or are not nationally known brands. If brand managers think these out-of-category and category-adjacent products aren’t their competition, they’re making strategic decisions with the wrong information.

Understanding the true, online competitors, often quite different from brick and mortar competitors, will go a long way to defining the best strategy for your products. It will affect the competitive keywords that are bid against and points of differentiation that are called out in keyword choices and all other aspects of marketing on a platform. A search measurement, such as Share of Search or another digital shelf analytics tool, will help you quickly identify key competitors for your critical keywords.

Some brands, especially high-end products, have the preconceived notion that they don’t need to bid on their own brand name. They believe customers will seek out their products without any extra ad spend on their part. However, the coverage that kind of ad spend provides can benefit both well-known brands and lesser-known brands alike. And, don’t forget, if you don’t bid on your own name, your competitors likely will.

Using ad tech is a strategic and increasingly complex piece of the selling puzzle. Ads must be compelling and engaging, certainly. But they also need to be strategically sound, well-placed and differentiated in order to help the buyer in their journey to conversion — no matter where they  currently sit in the sales funnel.