Growth Newsletter #086

If you’re running PPC ads on Amazon, it’s not always clear how much you should be spending on them.

Here are some numbers that can serve as benchmarks:

• A useful framework from Ad Badger: Your Amazon ad budget should be about 10% of your total Amazon revenue. So if you’re doing $100,000 a month in Amazon sales, you would budget around $10,000/month for ads.
• The average daily spend for Amazon sellers is $268.21. That’s high for new advertisers.
• Aim to spend enough to get at least 100 clicks a month on each of your keywords. A common issue with Amazon ad campaigns is having too many keywords for what’s budgeted. The result is that most keywords—sometimes around 90%—don’t get enough clicks, which means insufficient data for the bidding process.

To optimize bids, use the Inch Up Method: Keep initial bids low while you’re gathering information about how keywords perform, then gradually increase bids as you learn which keywords get clicks and conversions. So you might bid 10¢ on Day 1, 20¢ on Day 2, etc. 

You can also use the target bid formula:

Target bid = (average order value x conversion rate) / (1/target ACOS).

If your average order value is $12, your conversion rate is 10%, and your target ACOS is 30% (about the average for sponsored product ads on Amazon), your target bid would be (12 x .1) / (1 / .3): 36¢.

Ad Badger has created a bid calculator you can use to find your target bid.

Do you use tiered pricing? 

Here are 3 steps you can take to make your higher-tier package more appealing:

1. Create a clear hierarchy between tiers. Customers subconsciously want a recommendation. You can use design choices to suggest a tier for them.
2. Make your higher-tier incentive more valuable—if possible, consider using a larger discount for your higher-tier offer.
3. Use descriptive tier names to set expectations and communicate the value on offer. “The complete package” feels more enticing and comprehensive than “the essentials.”

Pair this with “four pricing psychology tactics to increase conversion” from newsletter #070.

Do you work in early or growth stage B2B marketing?

Emily Kramer, former Head of Marketing at Asana and Carta, is hosting a 4-week B2B Marketing training program on Maven.

There are not many people better suited for hosting this program than Emily. She’s led marketing teams from Seed to Series E with $0 to $100M ARR over 15 years in startups. And she’s coached dozens of marketers 1:1 and built the curriculum from the back of those experiences.

You’ll leave her 4-week program with a better understanding of setting strategy and hiring across marketing, a guide on how to position your startup, and frameworks to plan, prioritize, and execute initiatives. See the program here.

People naturally prefer rhymes.

In multiple studies, we rate rhymes as likable, memorable, and trustworthy. Researchers hypothesize that because rhymes are easier to process, we’re more likely to remember and believe them.

That’s why rhyming has historically been so successful in advertising.

Think Bounty’s “quicker picker upper” or Liberty Mutual’s mascot, the LiMu emu.

But rhyming’s not just for creating catchy slogans. You can use rhyming to trigger action in your ads, subject lines, CTAs, headlines, and landing page copy.

Some examples:

• Zapier makes you happier (from Zapier's homepage and social media)
• Integrate, Automate, Innovate (also from Zapier)
• Be kind to your mind (from Headspace's homepage)
• No skimpin' on the chicken! (from HelloFresh's homepage)
• CrapWrap (the name of Firebox's gift-wrapping service)

If you see an opportunity to get creative and rhyming fits your brand voice, consider testing it out.