Listen to this week's episode to learn from the experts at MuteSix on how to properly attribute sales to each platform when advertising on Facebook and selling on Amazon.
00:00 Speaker 1: You're listening to The Spend $10K a Day Podcast brought to you by the performance marketing experts at MuteSix. This is your source for cutting edge insight into the world of online advertising from the team with more Facebook case studies than any other agency on the planet. Here are your hosts, Steve Weiss and Stewart Anderson.
00:27 Stewart Anderson: Welcome back to the Spend $10K a day podcast, I'm Stewart Anderson here with Steve Weiss today, we are talking about something very exciting. The relationship between two of the biggest tech companies in the world: Facebook and Amazon, it's a unique challenge for anybody who's doing performance advertising these days. If you are selling both through your own store and on Amazon, you face a lot of unique challenges when it comes to tracking conversions and improving your campaigns. Steve talked to us a little bit about some of the main problems that people have when they're running Facebook ad campaigns and selling on Amazon.
00:56 Steve Weiss: So a couple of interesting issues we've seen over the years, just to be very cognizant and aware of when you're launching a business on both Amazon and Facebook. Number one, reviews. I don't think a lot of people think about this, but when people make purchases on Facebook, the first thing they're doing is they're Googling it and they're also looking at the reviews on Amazon. So if you're launching a product or service or you're trying to build a brand through Amazon and you're going over to Facebook and trying to run ads, just remember that before you put your product at Amazon, you should have the final version of your product because if you don't, you're gonna get bad reviews. And that's gonna have a really negative impact on your Facebook ad campaigns.
01:40 SA: Yeah, absolutely. And talk to me a little bit about how, if you are selling both on your own store and on Amazon, some of the issues that you're gonna face.
01:52 SW: Number one, remember that Amazon's what we call the Walled Garden, so the way to think about Amazon is that Amazon has it's data, Facebook has its data. And just from running Facebook ads, Facebook is a discovery platform so you're gonna be driving incremental value to Amazon. So it's really hard to attribute sales back to your Facebook campaign, so you're gonna see a dip, if you're selling a lot on Amazon, you're gonna see a dip automatically in your ecommerce store. So it's really hard from a tracking and conversion attribution perspective to really understand the overall impact of your Facebook ad campaigns.
02:29 SW: On top of that, just strategically thinking about your brand. I feel like a lot companies are just so motivated now, I gotta get on Amazon, I gotta get on Amazon, just because they're seeing everyone selling on Amazon, seeing how successful people are. And just remember that Facebook is still the place where people build brands. When someone buys a product in Amazon, they're not buying from you, they're buying from Amazon. So it's always the whole thing is if you wanna move a lot of product really quickly, you go to Amazon. If you wanna build a real brand, you first go to Facebook. And I think it's really important to differentiate the two expectations of both platforms.
03:07 SA: Yeah and part of building a brand in this sense is also building a direct relationship with the customer. 'Cause as you said, when they're buying from Amazon, they're buying from Amazon, they're not buying from you, they're buying your product from Amazon. And if you wanna own that customer relationship, you have to sell it through your store. So we've talked with a lot of clients about this issue 'cause we have clients that sell their entire catalog on Amazon. We have clients that sell nothing on Amazon, we have clients that sell one or two products on Amazon. Obviously, there's gonna be a different answer for every business but just kind of taking stock of the whole landscape, what would your recommendation be, strategically? If the company has several different types of products, perhaps an entire catalog, is the best answer to sell a few of them, try and get people familiar with the brand. And then, hope that will push them to your own store or is there another route that you recommend people going?
04:00 SW: So that's a really good Amazon strategy that I always recommend to clients we work with and partners and conferences I speak at, is really, you could use Amazon as a teaser, you don't need to put all your skews on Amazon. You just don't need to do that. You could put two or three skews on Amazon then actually people are then gonna look up your store. They're gonna use Amazon as a discovery mechanism, then look at your store and they're gonna see all these other products that aren't listed on Amazon. Obviously, Amazon want you to list every single one of their products on there. They wanna have full transparency, to be able to move the product cost up and down, they wanna get the greatest deal to the consumer to move as much product as possible, but one of the strategies is to really be thoughtful of which products that you put on your Amazon store.
04:46 SW: And also, secondly, how you optimize the listings, we can go a little more into optimizing Amazon listings with the right title tags, the right anchor text and really start understanding what key words on Amazon are people searching for to find your product. I think that's really... It's really interesting. What I like to do is I like to look at competitors on Amazon, I do a lot of... Amazon's the place to really understand competitive intel.
05:12 SW: I think that's the future of just Amazon and Facebook, specifically Amazon, is to really dig deep into your competitors and really understand where the trends, what are people searching for, how do you set, how do you use the description, the body of your Amazon listing to really drive action?
05:29 SA: Yeah. We've talked to some people recently, some earlier this week that are really, really savvy about Amazon 'cause obviously, you touched on something really important before. Which is that because it's a Walled Garden, it's hard to really know exactly what happens when somebody buys on Amazon. And you can't feed that data back to Facebook which is a problem. You don't get that auto optimization, you don't get that machine learning. But you are able to sometimes measure the effect of Facebook ad campaigns. You can do things like lift studies which are a little bit complicated but can produce results. The other, I think important thing when you're analyzing the overall cost of driving conversions on Amazon, in conjunction with these lift studies is knowing that if you drive traffic... Let's say you're taking an unconventional route, and you actually are driving traffic to an Amazon store page or you're driving traffic to your own store knowing that traffic is going to Amazon.
06:29 SA: You also can factor in, "Hey I know that Amazon... If this person doesn't buy of that first purchase, they're gonna probably hit them up with retargeting ads." Amazon's gonna spend the money to actually convert those people. So is there a way, obviously this is again another question that's probably gonna vary from brand to brand, but do you have a methodology or an approach that you apply when you're thinking about, "Okay. What is the value I'm associating with driving traffic to an Amazon store page from a Facebook ad?" Either directly or indirectly? How do you analyze that?
07:02 SW: There's a lot of by products that go into driving traffic from Facebook to Amazon, the pros of that are obviously for specific search queries, you're gonna start getting indexed. We've seen companies get indexed from driving Facebook traffic to Amazon, actually get organic Amazon listings boost. And also you could have in your ads specifically buy on Amazon, buy on Amazon, get a discount. Amazon loves that. Obviously using Facebook as a mechanism to drive organic to boost organic on Amazon is a strategy that's becoming more and more popular as you understand the real, how that specific niche, who the main competitives are in that niche. So, I think number one, the pro is to drive traffic to Amazon to increase organic ranking and discovery inside of Amazon.
07:53 SW: Number two, I would said understanding... I guess the con is just measurement. That's the number one thing, people wanna know ROI, they wanna understand measurements. So the main con is that you're gonna drive traffic to Amazon and you have no clue. You have no relation with this customer after they leave the fan page. They're gonna buy your product or they might... What people don't understand is that when people go to Amazon from a Facebook ad or go from a Google search, when you hit that listings page and you don't buy, Amazon's not just remarketing your product to them, they're marketing your competitor products to them.
08:31 SW: The user that you're driving to your Amazon listing, Amazon's taking that data and saying, "Hey, I'm gonna market both your product... We're gonna re-market through dynamic product ads, to both your product, as well as other peoples product." Cause remember, Amazon's only gonna serve the most relevant listing that's getting the highest conversion rate. On one hand, you definitely wanna drive sales, but on the other hand you really wanna be thoughtful about the traffic you're driving, because if doesn't convert, Amazon's not gonna keep showing your listing under specific search terms.
09:00 SA: Yeah. And it sucks knowing that you paid money to drive traffic and have your competitor get the purchase. [laughter]
09:06 SW: Yeah. That's the most awful part of the whole situation, is that you just don't know. And I think it's a bigger question to talk about the relationship between Facebook and just "market places". Had a meeting... We were at CES this week and I got to meet the person who runs the marketing platform for Target. Target is also coming up with their own marketing platform. You can market, you can take Target's first party data and actually run ads to people inside of Target. All these, market places from Jet.com to Walmart, to Amazon, they're all trying to do the same thing, they're all trying to build a walled garden with their own first party consumer data. And they wanna charge advertisers to reach people who buy specific products. And it's really key to understand how market places figure into the grand scheme of your business. What percentage of your business do you want market places? Obviously if you invest more into market places you know that you're gonna take that away from actually building a brand that people recognize. Cause when you go to market places, there's no recognition of anything.
10:10 SW: There's value in Facebook, there's value in market places, but long term the question I have, and I asked everyone who does Amazon on a very large scale. If you are looking at building a business and you're trying to build real equity value. Equity value that makes your brand stay around for the longest, what real equity value are you building from having an Amazon store, and having all your customers buy through Amazon? What are you building? It's almost like a wholesaler relationship.
10:40 SW: And I know a lot of people are always gonna fight me on this, and I'm little prejudiced in this sense, that I love Facebook, I think Facebook is where brands are made. I think that there's performance branding, brand performance. I think that's the new Facebook term for Facebook. But I feel like, Facebook's where you go to build brands, drive sales, and drive equity value. And I think that's the difference, right now at least between Facebook and Amazon. That's not to say that Amazon's not a great place, we've made a lot of money on Amazon, for our partners. So that's my thought process and the way I understand the competitive landscape right now.
11:18 SA: Yeah. [chuckle] I think that's a pretty good description right there. Is there anything else that you think... Obviously a lot of entrepreneurs when they wanna get started, and they wanna sell products. Amazon is very attractive. If you had to boil down the message in a 30 second sound bite, what is your parting advice for that entrepreneur about, "Hey, you're getting started, you're selling products, here's what you need to be doing." You either need to be on Amazon or you don't, or a combination of both?
11:46 SW: Depends. Are you trying to build a hustle? If you're trying to build a business where you're the middle man, and you're sourcing products and you're sourcing what's hot, you have great factory relationships, and the element of brand isn't as important, and you're just trying to drive a bottom line revenue, then I would say Amazon's your spot. There's not gonna be a better marketplace for right now than Amazon. Amazon will open doors to other marketplaces from Jet.com to Walmart to Target, that's the first place you go. But if you do have a brand and you're very thoughtful about that brand relationship, I would be very sensitive about the specific products you put onto Amazon. I wanna understand which products that have the best reviews, which products do I wanna feature on Amazon? 'Cause if you get bad reviews on Amazon, it's gonna drag down your whole business.
12:32 SW: Every single marketing channel is gonna go down if you have bad reviews on Amazon. So, being very thoughtful about which specific products you put on Amazon, and then, how many products is also... You don't need to put your whole product catalog on Amazon. There's also a discussion about how much do you have for FBA? How much product do you send to Fulfilled by Amazon, how does that affect your supply chain? There's a whole bunch of questions that go into going Amazon and marketplaces into your core business model, but I would be very thoughtful of which specific products you put on Amazon and then really put teaser products, put your best performers. Cause there's a huge amount of risk with just doing Amazon.
13:15 SA: Yeah. Yeah. We could probably do a whole series of podcasts on Amazon, but I guess, knowing that piece of advise, I think is really helpful, really telling people to not rush into anything, to really be methodical in how they approach this. One question we have to ask obviously before we jump off here is, if you are offering some or all of your products on Amazon and you have your own store, how do you adjust strategy from a Facebook ad standpoint, versus somebody who was previously just running ads for their own store? Knowing that hey, okay, some of this traffic might end up on Amazon, what am I doing on my Facebook ad campaigns to kind of adjust?
13:58 SW: I know people don't wanna hear this, but the reality is that people are gonna convert on Amazon. You don't know how many, you don't know any attribution, but when someone sees an ad, they're gonna go on Amazon, they're gonna check it out, and they're most likely with Amazon Prime, they're gonna buy on Amazon. Until, Facebook comes out with Facebook Prime, people are gonna go on Amazon, and use Amazon Prime, so that's the reality. So, using that as a benchmark, being a little bit more conservative on your CPA goals, roll out goals, 'cause the reality is, is that not everyone's gonna purchase from your store and if you're trying to base very aggressive growth goals, while having your ads compete with Amazon from an attribution perspective, then you're just not gonna hit your goals.
14:41 SW: So, I would say that if you are growing your Amazon store, you are running Amazon ads, you are really pushing Amazon as a main marketing channel, maybe being a little bit less aggressive in your KPIs, to really understand that there is attribution. And maybe turn Facebook down one day if you're spending $4000 grand or $5000 grand a day on Facebook and you're like, hey, I wanna understand how much of this attribution is going to Amazon, maybe turn Facebook off for a day, or turn it down a certain amount to see how that impacts your Amazon store, that'll really tell you what type of attribution is really going on.
15:21 SA: Makes sense, makes sense. Any parting thoughts? We've got a lot of information here, but...
15:25 SW: Also, we're talking a lot about looking at your Facebook stats, I know this is just a little thing I'm always thinking about is, what we call a look back, so obviously you generate a lead or a sale today, that's $30 CPA. Seven days from now you go into Facebook stats and you look on January 12th, whoa, it's down to $15 or $20, so that's called attribution. And really to understand your attribution from a measurement perspective, if you're running Amazon, is to really start doing a look back test, where you could actually look back before you're running Amazon, understand, okay, on average every seven to 14 days, my CPA is dropping 30% to 40%, because more and more people are being attributed to my funnel back to early campaigns. Well, when did you start running marketplaces and other types? So, platform selling your product, less and less of that attribution Facebook is gonna pickup, so you're gonna start seeing that your CPA on one day click, which might be very high is not gonna go down as you go farther and farther into the life cycle of that impression.
16:27 SA: Yeah, good point, good point. Really important to think about that.
16:31 SW: So, just really important, measurement, I'd say, 2018 is the year of measurement. Facebook's trying to be really transparent in terms of how the auction works, what goes into the auction, what goes into bidding, very, very important. 2018 is gonna be the year of measurement. And I think we're gonna have a bunch of new content on measurement for all the people who love data and who love measurement, we're gonna have a bunch of new content coming up. We're gonna be collaborating with some awesome people on the measurement team and very exciting for all the people who love to geek out and who love to talk data, ooh, so exciting.
17:06 SA: I'm excited.
17:08 SA: Yeah, we've got a lot of great content coming up, especially about measurement as Steve just mentioned. If you have any question about marketing on Facebook, obviously, but also selling products on Amazon and marketing on Facebook, please feel free to email Steve or myself. Steve@mutesix.com or email@example.com. Thank you again, and we will be back again soon with more great Facebook ads content.
17:35 SW: Cool. Later.