Debunking Common Amazon PPC Myths⎜ Sponsored Profit ⎜ EP 221
Ryan Cramer: What's up, everyone? Welcome to my corner of the internet. I'm your host, Ryan Cramer, and this is Crossover Commerce presented by PingPong Payments, the leading global payments provider, helping sellers keep more of their hard earned money. Hey, everyone. Welcome back to another episode of Crossover Commerce. I'm your host, Ryan Kremer, and this is my corner of the internet where I bring the best and brightest names in the e- commerce space. Every episode here is presented by PingPong Payments. If you haven't heard about PingPong Payments, we are a cross- border payment solution helping people keep more of their hard earned money. By people, I mean you, the entrepreneurs who are listening to this. If you're an Amazon seller, if you're an e- commerce seller, if you're a business that's just trying to grow your business internationally, whether it's paying your suppliers, manufacturers, your employees, or just paying off some of your services internationally, wherever you might be in the world, check out PingPong Payments. It's free to sign up, it's easy to use, and it's going to save you time, money, and a headache once you decide to grow your brand. All you have to do is just go to usa. pingpongx.com/ podcast in order to check out for free... I should say free account and check out all of our past episodes. Again, this is episode 221, almost... we almost had 222 on February 22nd, 2022. Just by one episode we missed on that. So that's my fault for everyone, not being able to do one more today. But for the sake of doing it on a Tuesday, this is Tuesday, February 22nd. I'm excited because we're kicking off the week pretty strongly. There's so much going on here leading up to the... in the end of February, going into March. I know a lot of people in the industry are talking about events. There's virtual events going on right now, 7 Figure Seller Summit. We have Billion Dollar Seller Summit, which is kicking off here this week. And we also have Prosper coming up in a matter of, I want to say, less than three weeks. Check check your calendars, I might be wrong on that. But I feel like it's less than three weeks from now. With that being said, a lot of what I'm trying to get at is a lot of people are gearing up trying to get their house in order in terms of growth on opportunity for their brand on Amazon or in e- commerce. Now that can be lots of different things, but of recent, maybe you've not noticed this, but I certainly have, lots of articles coming out of high spin on Amazon or high... what it takes to be successful on Amazon. A lot of that kind of ties back naturally to what we're going to be talking about today. And that is PPC. I love the team that's coming with me today to be talking about some of the common Amazon PPC myths. Almost like we're going to be talking about something that a lot of sellers or companies think is the case, but maybe not so much if you're in the weeds on it on a day to day basis. So we're going to debunk those today. And I brought the team from Sponsored Profit, Laura and Darrell. They're the co- founders of Sponsored Profit. And they're joining me from across the pond, over in England. So without further ado, super excited to have both of them on today to help us debunk and to set the record straight in terms of PPC. Thank you to both Laura and Darrell, and welcome to Crossover Commerce. Let me bring you both on right now and unmute you both. Welcome both.
Darrell Paterson: Hey Ryan, how are you?
Ryan Cramer: I'm doing well. We were talking about this to... Everyone, Darrell wants to move somewhere warm, so we're going to have to give him a couple different options where he needs to move, besides England. But we appreciate you both joining us today. It's cold, wet, and rainy here, assuming very much like what it is in England. So I could be wrong-
Darrell Paterson: Standard.
Ryan Cramer: ...but probably not. Is that crosstalk?
Darrell Paterson: You don't have to be a gambling man to guess that it's cold, wet, and miserable in England.
Ryan Cramer: Oh, there you go. Well, hey-
Laura McCaul: Yeah, we've had a few storms as well and floods, so actually the part of the country that Darrell's in is... some of it is crosstalk-
Darrell Paterson: Underwater.
Laura McCaul: ...at the moment. So yeah, we've had some horrible weather and floods over here at the moment.
Ryan Cramer: You're going to have to Amazon Prime, maybe, one of those inflatable rafts or anything like that to get you out.
Darrell Paterson: Canoe.
Ryan Cramer: Canoe. Exactly. Hey, they sell him on Amazon, I know for a fact, I've searched for them. So it is a thing, at least here in the United States.
Laura McCaul: Yeah, no, my friend Frenchie's got an inflatable-
Ryan Cramer: There you go.
Laura McCaul: ...inaudible, yeah. Yeah.
Ryan Cramer: Well, hey, thank you both for tuning... coming on today. I know Laura and I chatted a little bit before, and Darrell, this is our first time chatting about this. When I invite everyone onto this kind of this space, if you will, is if people aren't familiar with you, I just want to welcome... introduce friends to the room if you will. So if Darrell, maybe you want to start since I even on the top- right, in my corner of the screen.
Darrell Paterson: Sure.
Ryan Cramer: Who you are, maybe introduce what your background is in the e- commerce space and how you are here today?
Darrell Paterson: Yeah, sure. First, thanks for having us. I appreciate it. It's always exciting to share our thoughts and opinions with like- minded people, so that's all cool. Yeah, my background, I was ex- Royal Navy. I was an aircraft engineer, that was my original, original... straight from school. That was my craft. After leaving the military, I bummed around for a few years, really unsure what to do. I didn't like being told what to do after leaving the military, so I was always looking something to do myself. That's when I come across Amazon. That was 2013. Started selling my own branded products back then. Started getting quite good at doing PPC for myself. It was very different back then to what it is now. And that kind of grew gradually from there, helping a few mates, meeting people at events, and just chatting. And then met these guys, so Laura and our other business partner, Tim. We actually all met at events. And then, yeah, we decided to form Sponsored Profit, nearly four years ago now?
Laura McCaul: Yep. Four years ago.
Darrell Paterson: Yeah, so this is our full focus now, helping growing brands, helping them scale on Amazon.
Ryan Cramer: Are you still selling still? Or is that kind of crosstalk-
Darrell Paterson: No, I... Yeah, that's all gone now. So we're 100% focused on helping other brands grow now.
Ryan Cramer: Very cool. Well, that's an exciting story. Obviously, meeting at events. I feel like a lot of people with businesses that formed, whether it was in person or they just met through happenstance of," Hey, like- minded people," kind of collected it. Laura is a out how you felt when you met Darrell as well?
Laura McCaul: Yeah, I mean, and that's why it's great that events are coming back now, I think. Because you just can't quite replace them with anything else. There's great events, virtual events, but there's something about being in the same space, particularly if there's a bar involved, that always helps. They're always good congregation points. But yeah, I mean, I met Darrell and Tim at an event in Vegas, and essentially a lot of the events, not as much anymore, but certainly back then very U. S. centric. So we'd spend a lot of time over there and so when you in a room with a sea of American accents, when you hear other British accents, your ears prick up and you gravitate towards each other. And yeah, as Darrell said, both myself and Tim were also selling, so we were all sellers ourselves, but we discovered we were good at different things in our businesses. So Darrell's, he plays it down, he's like," Yeah, I was quite good at PPC." I mean, he was like a wizard and I don't think I understood half of... more than half of what he told me the first time we met. But he was really good with PPC. I sort of gravitated towards writing high converting product list things. And Tim was really good on the SOPs and processes side of things. So we each kind of lent on each other in each other's businesses to help each other with the things we weren't as good at ourselves. And then, as Darrell said, that expanded to sellers in our network, our friends, and then word traveled and then Sponsored Profit was formed really as an opportunity to move from seller to service provider. It was an opportunity that presented itself, which is great. And the reason I got into it was I had a career in landscape design in sunny LA. So seeing as we're talking about the weather. And when I decided to move back to the UK, working outdoors, for some reason didn't have the same appeal. I was like," Yeah, I don't think I feel like being out in the cold, in the wet, nine months of the year." And a friend introduced me to the opportunity on Amazon, so I was like," Wow, I've worked with some really frustrating and rubbish gardening products, so I'll start a gardening product brand." So that's how I got into e- commerce. And then, as Darrell said, then we met at an event.
Ryan Cramer: Darrell, you said 2013 is when you first started. Is this around the same time Laura, that you started your business?
Laura McCaul: No, I was a little bit later. I was 2015.
Ryan Cramer: Okay. So I would say both fairly early on in the FBA third party phase, if you will.
Laura McCaul: Oh, yeah. Compared to-
Darrell Paterson: Yeah, it was very different than to what it now, yeah, sure.
Ryan Cramer: Well, I was going to say, so Laura, I'm assuming not selling on Amazon still or still-
Laura McCaul: No, no, no. We've all exited or pivoted away from our businesses. And so, yeah, we're all in on what we do.
Ryan Cramer: Well, just a point for the audience, I think it's so fascinating to see service providers, but coming from the seller side, but then getting into this service side. Sometimes people will continue selling as well, but I feel like the dedication of, hey, having to help other people out in that regards just takes so much time away from their own business. I think that's the natural balance act, if you will, that it's difficult to assume. I see some people try to do it and other people are... they're developing technologies and software and all these things, it's like," Oh, and by the way, they're doing eight figures on Amazon, or multiple eight figures." It's crazy to think how certain people can do both and other people are like," I really want to really lean into the service side." So what was that conversation like for both of you? Did you still have businesses and you're like," Hey, I think I would rather do this and this is where the industry's going towards"? Is that how that conversation went?
Laura McCaul: Yeah.
Darrell Paterson: I think for me, the big realization was conflict of interest, right? We started to grow and take on more and more partners, and there were times that people would come to us selling the same kind of products that we were in our own brands. That's then a question in my eyes, the question of morality, right? It just didn't sit right with me. So the option was, all right, we either don't work with these type of products, which really limits our reach-
Ryan Cramer: Right, you guys weren't in niche categories, you guys are in pretty competitive categories in that regards.
Laura McCaul: crosstalk-
Darrell Paterson: Yeah, so for me it was more a case of this doesn't feel right, so what are the other options? Where's my heart? Where's our passion? And it wasn't in the brand anymore. So that was a good reason to exit the brand and focus 100% on helping other people.
Ryan Cramer: Gotcha. So you both either sold your business or gave it to somebody else and let them take it over, is that how that worked for you guys?
Darrell Paterson: Yep. And the same for Tim as well. Yeah.
Ryan Cramer: Gotcha. When did Sponsored Profit really become a full focus for you guys then?
Darrell Paterson: So 2000...
Laura McCaul: 2018?
Ryan Cramer: Okay.
Ryan Cramer: 2018. So been around for four or five- ish years or so, obviously full fledged with that. Very fascinating, because obviously that would... back in 2018, if I remember correctly, Amazon maybe had a very limited number of sponsored PPC placements that you can obviously make a name for yourself as a brand or anything like that. Now it's quite the opposite. Maybe there's all but one space, I think it's in similar products, or not similar products, it's in the bundles section, I think that's the only place that you can't really sponsor an ad. Or maybe you can't now, it's been a while since I've looked.
Darrell Paterson: Yeah, you can actually run brand ads through bundles.
Ryan Cramer: Right. But almost, what, the top seven search placements are... they're all crosstalk-
Darrell Paterson: It depends. Depending on the layout, yeah.
Ryan Cramer: Right.
Darrell Paterson: You've got this one's a brand ad, typically four sponsored product ads-
Ryan Cramer: Then organic.
Darrell Paterson: ...then a couple organic. Then you've got video editorial picks, Amazon's Choice-
Ryan Cramer: Right. Which are all paid placements.
Darrell Paterson: Yeah, it's gone crazy. It's changed.
Ryan Cramer: So I guess going into this, and I mean, we've just talked about this for 15 minutes kind of getting into it, what is the conversation... like, you guys did this from the beginning, with not that being in the case on Amazon, but now they've really leaned into, and obviously it's completely 180'd of now you have to. Amazon says they don't, it's not a requirement, but everyone in this room, if you will, knows that you have to spend on advertising in order to be prominent within any sort of Amazon space to sell products, to launch out to anything of that degree, to have successful brand on Amazon. Do you guys feel lucky with that regards of like," Hey, we're going to do this and really lean in PPC"? Or is this something that, naturally, you were like," Wow, this is kind of in our favor. We really should develop our wherewithal and our skill sets in that regards"?
Laura McCaul: Well, it's interesting. When we first started the business, because I had the product listing copywriting background, when we first started Sponsored Profit, we did both. So we did product listing creation, and I worked with a photographer on the images side, and we were also doing the PPC. And that's a really good blend, right? Because you've got the traffic and the conversion piece. However, about a year in, we could see lots of changes taking place on the platform. So on the conversion side, Enhanced Brand Content and A + Content had come out. We were first starting to see a few odd video snippets here and there, Storefronts 1.0 was out. So there was a lot of changes taking place there, and definitely the first, I think, signs that Amazon was really starting to go down a branding path. At the same time, on the advertising side of things, all of a sudden changes were starting to show up in advertising and there were developments there. And so we, about a year in, we were like, okay, do we go full service agency? Because we can see that the marketing and advertising side of Amazon was getting more complex. Or do we just go in on one thing and go in sort of really deep? And I think Darrell can speak to some of the changes that we were starting to see even back then. And we kind of hedged our bets and we went all- in with PPC because we felt the changes were more seismic, but not only that, with PPC, people really feel that pain point in their pocket. We all know there is absolutely value to having an SEO optimized, high converting product listing or quality products. There is a value and a cost you can attribute to that in terms of the sales that you'll make for your product. However, when it comes to sellers and it comes to seller central, when you log in every morning, the first place you look is your payouts and your balance. And then you look at how much your ads have spent. So it's a very... PPC is very much tied to money being spent, and that pain point is very great for a lot of people. So that's also why we've gravitated towards PPC, because it's where people were really hurting the most. But Darrell, the changes we saw back then? There's been so many I can't remember now, but you'll probably be able to remember.
Darrell Paterson: Yeah. On average, I think, there's less... certainly these last couple of years, there's been like change a week. I think it's a lot to keep up with.
Ryan Cramer: I call it death by a thousand paper cuts.
Darrell Paterson: It is. It's constant. It's challenging, for sure, but I love it. Yeah, I think back in 2018, you were just saying there about the sponsored ad placement, I was just thinking back to what it was like when we first started. And do you remember it was, the ads were down the right hand side of the page, right?
Laura McCaul: That's right. Yeah.
Darrell Paterson: So that was the placements. There was one or two at the top with the brand ad when they first started doing brands.
Laura McCaul: crosstalk. Yeah.
Darrell Paterson: And then it was just down the right hand side. There was nothing throughout the search results. There was nothing really on product pages, even then. That was a fairly new thing, right? One reel of sponsored products on a product page. Now there's four or five in certain layouts. In addition to all of the sponsored brand ads, sponsored display ads, video ads now on product pages, it's completely changed. I always describe it as it's like playing Monopoly now, right? It's a game of real estate. It's not just about having a full funnel marketing strategy, it is a game of real estate. If you can identify where there's where competitors are weak and go and park your for sale sign on their property, you're going to pick up some sales and steal market share. And I think that's the biggest shift that I've really seen over this last four years, is it used to be a case of throw some ads up, you could just launch an auto campaign... And I still see auto campaigns running now from... predating when we started, and we don't want to touch them, right? Because they're just phenomenal.
Ryan Cramer: Right.
Darrell Paterson: We have no control over them, really, compared to what we have now. You couldn't negate ASINs and all that kind of stuff. But they were just... well, just so much inaudible on them now, they're still performing well, the couple that have got in mind. But that was it. That was really that easy. You didn't need to understand PPC, you didn't need to understand advertising or marketing in general. It was just do this, turn this on, set a bid, and make money. It was like printing cash. And gradually, over the years, that's got less and less the case, and it has become a much more sophisticated platform. It was quite raw back then, but now, taking the lead from a lot from Google ads, changes that Google's seen over the years. I know they took a lot of highly sought after employees at one point back in 2018, 2019. And you can see how it's transitioned the same way that the Google has, which for us as an agency is great, because it gives us more levers to pull, more things to try and test, right? Because not everything works for every product. Not everything will work for every category. So having all of these different things to try is great for us, but it makes it much more complex for your average seller to try and figure out.
Laura McCaul: But I think, actually, also on the back of that, I think that's a really good point. And I know we haven't got stuck into the mix yet, but I think just coming back to that as well, while there is this... obviously a sophistication that's come onto the platform and that huge increase in real estate, that is still where the opportunity is for sellers. So yes, it's gotten more complex for sure, but at the same time, it does actually provide sellers with more opportunities. Because I do think there is a healthy, or maybe slightly unhealthy, cynicism towards advertising on Amazon. But it's here to stay, it's not going anywhere. However, what it does mean for sellers is that there are more places and ways and opportunities for you to get your products in front of customers. It's just you need a more flexible and adaptive approach. But with all that real estate, there are more opportunities to find more placements for you to connect with customers. So I do think that it's still a positive development, it's a positive evolution-
Darrell Paterson: crosstalk.
Laura McCaul: ...but like Darrell says, it does make it more complex. But Amazon wants to put your products in front of their customers and they're just finding more and more ways for you to do that.
Ryan Cramer: Right.
Laura McCaul: So I think there's a positive to take from it, too.
Ryan Cramer: Like you said, it's a scientific... it's now a scientific way to do it. It's not just a you're just buying impressions, it's as simple as you have to know which ones to target, how much to outbid everyone else. There's more of a science to it. So that's why I wanted to get you both on today. So you've seen this evolution, it's not simple anymore. And a lot of people think, obviously with the increase in cost... I just saw something on CNBC, an article with an agency in the PPC world also, this past weekend that anything that costs maybe$0. 04 to click, now is a$1. 64. I mean, obviously marginal growth, but comparatively, it's quite a bit. So I'm curious, besides just what cost is and everything like that, what are those things that you have to constantly reassure, reeducate customers on the end of," That's not true, this is actually how it works," or going into that myth section? If you would both share some of those that you're commonly encountering and debunking those, if you will, we'd love to get started on that. So Darrell maybe kick us off and the most common one that you're constantly trying to overcome with people of what is that?
Darrell Paterson: There's a lot. I'll just-
Ryan Cramer: What's your favorite? Let's start with your favorite.
Laura McCaul: crosstalk.
Darrell Paterson: I'll go with my favorite, that's probably the best one, yeah. It's actually one that's not spoken about too frequently, and that's been in on singular and plural versions of the same keywords. So just to give a bit of background on this one, Amazon will let you add a keyword in a plural form... single form, plural form, with, whatever they call them, stop words, filler words, things at, or, to, with. All of these kind of in between words. Amazon will let you bid on all of those type of variations. And what we were finding was, particularly for high volume products, the data was being massively split. So just give an example to make this a bit clearer. The example in question was board games for kids. So coming into to Q4, that was quite obviously quite a high volume search there. And when we dug into the data, we were finding that there was lots and lots of spend being shifted across this different search terms that were being attributed to the same keywords. So board games for kids is the same as board games for kid, which is the same as board game for kid, board game for kids, board game kid, board game kids. There's like 14 different variations of that keyword. Whereas the one singular keyword, board game kid, we took all of the other 13 out and then all of those sales for all of those search terms got attributed to one keyword. So we were able to make faster decisions, with less wasted ad spend, with less risk of falsely negating poor performance search terms, which we were seeing across the board once we started digging much deeper into this. And this has become one of our initial go- to strategies when we start working with a brand and we dissect all the data, we see this on pretty much every single account. Because Amazon will just let you spend and it's not clear that you don't need to do both. Although it is clear Amazon's documentation, but it's not... it's never made particularly clear in any of their training. So yeah, you don't have to bid on the singular and the plural, only bid on one, it doesn't matter which, but save yourself some money in wasted ad spend, and make faster, smarter decisions by consolidating the data.
Ryan Cramer: So we're giving Amazon a little bit of credit that they're going to consolidate the plural versus a singularity, and they're not going to differentiate the two, correct?
Darrell Paterson: Yep.
Ryan Cramer: Little bit of credit with that regard. That's smart because I would think, because of me in search terms, I think traditional SEO, you have to account for misspellings, at least on YouTube. I know for all the time you have to account for misspellings and that's how your video ranks.
Darrell Paterson: Misspellings is different. So-
Ryan Cramer: Right, that's different. But I was like, yeah, plural or plural, singular or plural, I thought I would maybe bundle all those things together. But that makes a lot of sense. I think that's a really great tip in that regards, too. But yeah, misspellings, that's a whole different animal. So that's a bad road to go down. But Laura, do you have anything specifically, like your favorite one that you like to debunk? Or do you want me to fire off a bunch?
Laura McCaul: Yeah, well, I mean, this one kind of follows on the heels of that a little bit, which is that more keywords doesn't mean more sales. So I think there is a sense of more is better. And for us, less is more. So what I mean by that is we're big proponents of the 80/20 rule. And so what you'll find in your PPC account is that you'll find 20% of your campaigns, or at a even more granular level, 20% of your keywords driving 80% of sales. And so it's very counterintuitive. But what we tend to do, and certainly when we first start working with an account, is what we want to do is we want to strip everything away, we want to really get down to what keywords driving sales and really focus the ad dollars on that. Because, again, I get there's... and there used to be the approach, and so it's kind of entrenched now at... in this is how you do Amazon PPC, but I mean, I remember when we were selling, and even not that long ago even, that there's a whole throwing mud at a wall kind of approach, which is, I'm about to launch a product, I don't really know what the main keyword is. I mean, I'm going to hazard a guess, however, I'm going to chuck a bunch of keywords in a campaign, cross my fingers, and I'll just wait for the data to tell me which of those keywords is going to convert and sales and which aren't. Well, that's a surefire way to spend a lot of money very quickly and actually not get very good quality data either. So when we're launching products with PPC, and when we're starting out with campaigns, we start with a handful of keywords. We make use of brand analytics, in particular now for keyword research, but we really want to find what are the most relevant, obviously balance that with we want... not search volume, but search frequency, if we're in brand analytics, but we're really looking for relevancy now in those keywords and not just search volume based off third- party tools. And as I said, safety in numbers, let's just throw a load of keywords to see what sticks, because it's just not a very efficient way, A, to launch a product because you're also sending mixed signals to Amazon. Because what we need to tell the algorithm what our product is and also what our product isn't. So all we're going to do by throwing in lots of keywords is confuse the algorithm. And then also, again, when it comes to efficiency, we want to make sure we're spending our ad dollars on the keywords that are driving sales. So again, the disadvantage of having bloated campaigns with lots of keywords in them is you're spreading your ad dollars really, really thin. So you're not giving those keywords a chance to prove themselves. We're not giving them enough budget so we can make decisions based on the number of impressions, the number of clicks, the number of conversions. But again, I think there's this kind of sense of safety that if I just have lots of keywords in my campaigns, I'm bound to make sales and that's good enough. And we want to really impress upon people that less is more and to really focus on the stuff that's going to give you a return and not the stuff that's basically just going to bleed you dry.
Ryan Cramer: What about, maybe the one I initially think of, we talked about this earlier, my SEO or my PPC campaign for Google versus Amazon. If I'm somebody who's on direct to consumer and I'm like," Oh yeah, just copy and paste my strategy from Google on to Amazon, that should work, right?" Anyone want to take that one?
Darrell Paterson: I'll take that one.
Ryan Cramer: Let me lead you down the path. Why is that wrong?
Darrell Paterson: Just they're two very different platforms, right? People do search on Amazon for product research, but typically Google is a search engine for information. I know Google Shopping and e- commerce in general, but it's a director of websites. People still looking to buy stuff, right? But they don't go to Google with the same buying intent as they go to Amazon. And that's a very different keyword. If someone's browsing and they're looking for information, the way they're going to search is very different to the way they're going to search on Amazon. And I think that, as the algorithms got smarter, this has become more and more important. That whole relevancy score that Google gives, that Amazon doesn't yet, I'm hoping that's an update that they do come out with, but yeah, there's got to be some kind of hidden relevancy score that's given to every target, right? And that's the biggest difference, I think, between taking those keywords from Google and putting them straight into Amazon is that the buying intent. I think with Google you can afford to be a little broader and try and capture more of that search traffic. On Amazon, I think it's more important to be super relevant rather than casting a wide net.
Ryan Cramer: Right. I think a good example on what I initially think of that, Darrell, is I heard this, I think... I'm going to give Amy Wees credit from Amazing At Home, she's a friend of the show. I think she was talking about strategy on Google, which is best garden tools. Like, obviously people are going to search for," What are the best..." Research phase," What are the best garden tools I should have for city living," or something like that. You're not going to use that same phrasing in Amazon because I don't think a lot of people use the phrase" best garden tools" in Amazon at all, it's just" garden tools," or" garden tools for city living," or anything like that. So the phrase" best" shouldn't be used in any phrasing. And I started to think about that, just the psychology of which the intent is there of," Hey, I need products or research," one versus the other-
Darrell Paterson: That's the key, right? And it depends where you're aiming in the whole marketing funnel. If you are looking to grow your... the consideration or the awareness phase of the funnel, then absolutely, you could touting broader terms like that. But in the knowledge that you're not going to get the same kind of return on ad spend.
Ryan Cramer: Right.
Darrell Paterson: Because you're not hitting that high buying intent. You are just trying to get in front of people that are browsing and shopping. And that's very different concept to running sponsored product ads and trying to maximize your return on ad spend. That is typically for bigger brands that have the budget to be able to focus on these higher up the funnel strategies.
Ryan Cramer: Or maybe more of a DSP play in that regards of... maybe in that regards, potentially, in that. Cool. I mean, I came up that one, so is there any major ones that are screaming at you, Laura, that are also ones that you just love to tell people," That's not true at all"?
Laura McCaul: Yeah.
Ryan Cramer: You kind of giggled to yourself, like,"No."
Laura McCaul: Yeah, I think another one is you don't need PPC if you're organically ranked highly. So we'll often speak to sellers who say," Well, I'm ranked number one or two in my category, I don't need PPC." And of course we would argue sort of against that because you still have to bear in mind, first off, in terms of what you're presented with on those search results, you're going to have a sponsored brands ad along the top there in the banner, and then you're going to have some sponsored product placements. And again, depending whether you're on mobile or on desktop, and then depending on the category, to find those first couple of organic placements, you've got to look for them because the ad placements have the better placements. But I think as well, the myth here is really that paid and organic, they work best together, it's not necessarily that organic is better than PPC because organic is free traffic and PPC is paid traffic. They work best when they're combined. PPC can help widen, really, the exposure and discoverability of your products that helps you rank higher for a broader range of keywords. So they very much work together, and together they make a deadly combination, particularly if you're a bigger brand and you're wanting to consolidate, you're wanting to defend your position in your category. So yeah, having a higher organic ranking is great, but using PPC can help you double your results and keep you top of mind with customers. And again, that's a big part of, let's say for example, those sponsor brand ads at the top where you've got the brand logo, you've got the custom headline, you've got the three product photos, it's up the funnel. And it's that kind of brand awareness and front of mind. So yeah, so for the sellers who believe that PPC and organic work against each other the bottom line is increased visibility, increased brand awareness and traffic, and together... they're stronger together and you can really kind of dominate.
Ryan Cramer: And I-
Darrell Paterson: Yeah, I just going to say, we've seen it so many times where people have come to us and said," I was number one for ages and then I turned my ads off and now I've dropped to page two," and it's like, well, what did you expect? Your competitor's just come in and taken that position and all those sales through target keyword. You're no longer making those sales. Yeah, you're still making the same organic sales, but you're not... you just gave up half of your sales.
Ryan Cramer: Right.
Darrell Paterson: And I think just tying back into the whole real estate conversation from earlier, the shift... another shift over that same time period, is the amount of sales that are coming from ads on the average brand. I think across the partners that we work with at the moment, we're seeing approximately, it varies massively from category to category, but anything from 40 to 55% of sales coming from paid versus organic. Whereas certainly when we were still selling, it was more like 20 to 30% were paid. And that was kind of the crosstalk-
Laura McCaul: And that was considered high, yeah. 30% people were like,"Oh, that's a bit high."
Darrell Paterson: So now when we talk to brands that say,"Well, I don't want more than 15% or 20% of my sales to come from PPC," it's like, well, okay, that's fine, but you're probably leaving money on the table and you're going to get swallowed up. Yeah.
Ryan Cramer: Here's one, maybe for both of you. And I love the phrase circling the customer, if you will, right? Of both paid and organic, that's a good thing. It's a buyer psychology of the more often you appear in front of them-
Laura McCaul: Absolutely.
Ryan Cramer: You have seven nos before you get a yes, right? Like you're saying no psychologically to all those different ones in front of you, but if you can get to that yes, and you happen to be there, that's a good thing. What about the phrase in terms of cost raising, and I'm curious about this for both of you, I've heard a lot of people say, if this is true or not, just that the rise of an aggregator, if you will, or the aggregator area-
Darrell Paterson: This is the hot topic at the moment, right?
Ryan Cramer: Well, this is a curiosity, too. Personally, I don't believe this, but the growth of people in the aggregation space, they are rising... they are responsible for the rising costs of PPC. Is there any data or anything of the sorts that backs up that claim or affecting in that regards?
Darrell Paterson: I think there's a number of reasons why cost per clicks have gone up so much. And I'll come on to aggregators in a sec. Just before that, I think one thing we have to bear in mind through this whole COVID over the last couple of years, is that a lot of bricks and mortar businesses that were never even considering getting online, had no choice but to get online. And where's the easiest place to get set up and get selling quickly? It's Amazon, right? You haven't got to go and figure out Google ads and running out your own traffic to your own storefront, it's already there. And Amazon is by far the behemoth. Still, even all these years in now. So that's one contributing factor. I think there's a lot more competition. There's a lot more sellers registered to sell on Amazon during the last couple of years. Naturally, that's going to increase competition for the same ad positions, right? Although, there's a lot more real estate, there's a lot mores to go along with that. Secondly, I think Amazon's got much, much better at promoting how important PPC and advertising is in general, particularly the whole full funnel piece. They've given us brand metrics, showing us how we compare against our peers for the consideration phase, awareness phase, the purchase phase, how many people are searching for our brand. And all of these things, psychologically say to a seller,"You're not doing enough. You need to spend more." So people get more aggressive to try and improve those percentages. The big one that come out last year was the top of search impression share, which is super useful and everybody should be using it. But what did that do, when that column appeared in Campaign Manager and everybody's account?" What do you mean I'm only showing up 10% of the time for my most important keyword? My most important ranking campaign, I'm only 5%." So they went and smashed their budgets up and smashed their bids up to try and get more impression share. So I think those two things, aside from the aggregated conversation, are definitely contributing to increased CPCs. The aggregated conversation, I think there is... I believe there is something in that. And I don't think that's necessarily in a bad way. I have heard some people saying they've just got so much money, they just put stupid bids on and they drove the cost up. Possibly. I think it's more likely the fact that they go above and beyond and they're building teams of experts, right? They've got the money to hire good people. And if you speak to anybody in this industry, they're struggling to hire and keep good people. We just seen a feature last week by Amazon increasing the baseline salary by 100%, right?
Ryan Cramer: Sign me up. I saw the base salary in there, I said," Where have I been working?" No, I'm just kidding.
Darrell Paterson: Yeah, I'm over here.
Ryan Cramer: I'm over here. It's nice.
Darrell Paterson: Yeah, but-
Ryan Cramer: I just read a book that they did that for that reason, and that was a Jeff Bezos thing of put equity into working hard so that your earn out will would become an equity long term. Not the case anymore. Yeah, it's all in, like you said, keeping talent and whatnot. And this is going to another thing, maybe Laura, you can speak on this, it doesn't make sense why they would just throw money at everything because, A, that's not smart money usage and it's a lot of waste, and these companies are on the hook for how to wisely spend their money. So why would you waste that in that regard? So that whole thing doesn't make sense to me, how that lines up.
Laura McCaul: Yeah, I mean, I'd intend to agree with you on that, Ryan. I mean, because ultimately they're all about the bottom line. And so okay, yes, they will have greater purchasing power, so I guess in terms of COGs, maybe in terms of logistics, obviously if they've got that purchasing power at scale, obviously their margins may be bigger. So they will have some wiggle room, like Darrell said, potentially to kind of be more aggressive in their bidding and their strategies. But ultimately, like you said, Ryan, it doesn't make sense to just be silly about it because they might be well financed, but they've got to deliver and they've got to get a return. And for those that are leveraged and they've raised money, they've got invested who are going to be saying," Where's our returns?" So they've got some pretty stringent circumstances and results that they need to be working within and delivering. So yeah, I think while they might have that more purchasing power, maybe slightly bigger margins, they still need to deliver on that. And they're smart people, they're not going to throw money away unnecessarily. They need to make it work. So yeah, I'm inclined to agree.
Darrell Paterson: It's not just inflating the price for inflating the price sake, right? And pushing people out. I think they're just doing it smarter. They understand that there's a full funnel marketing strategy now available to use on Amazon and they're fully implementing it. Whereas a lot of the brands that these aggregators are buying, they're buying quality products, right? But they're not necessarily buying brands that are maximizing their potential. I mean, we've had a number of partners going through this right now, looking to exit. And they're getting some great offers because we've scaled up their PPC and helped them grow their business. A lot of people that are exiting haven't maximized PPC before exiting, and this is why it's so attractive to the aggregators, right? They're seeing these opportunities of these great products with potential and now they're extracting that potential. So whereas before, the brand might have been bidding a dollar for a click, and quite happy that they had 5% ACoS on their PPC, now the aggregators come long and going," Yeah, we can be way more aggressive than that." And yes, it's going to push everything up slightly, but it's nothing malicious or just the fact that they're throwing tons of money at it. I think they're doing it in a sensible way, a smart way, and the way that everybody should be doing it. I think that's the difference.
Ryan Cramer: Right. It's not a jealousy thing. Money, you can blame anything. Like anything with money, you can blame. I just think, like you said, it's a strategy thing and how they are smart with it. I think that's a successful thing. You can't say that's something that's representing less than 5% of products out there, all Amazon, that's the rise of... that's the cost rise. I just think obviously, shopper demand, anything like that, that's going to naturally rise cost over time.
Darrell Paterson: Yeah.
Laura McCaul: I think as well, just to add to that real quick, Ryan, is... and this is something that we've talked about almost at day one, when we started this business, is mindset. And the willingness to invest in your business, the willingness to take risks, the willingness to try things, and PPC, a lot of it is testing. And that's something, in terms of the mindset, that's something that these aggregators have in spades. They just, some stuff's going to work some stuff isn't, but we need to spend money to make money. There is a big difference, I think in this industry, between... I think entrepreneur is a title that's banded about a lot, but there's an entrepreneurial mindset that has that sort of attitude towards risk, to trusting professionals to do what they're good at, that kind of thing. And then there's a lot of business owners or sellers who are actually quite conservative, and that's okay. But certainly in the PPC space, when we've seen now the marketplaces get more crowded, it is that more entrepreneurial mindsets, depending on the category, slightly more aggressive approach to PPC that's winning out. And I completely can see how that doesn't sit well with lots of sellers. And I totally get that. But if you are going up against an aggregator in your category, being conservative is going to... it's not that it's going to be a challenge, but you're not going to be able to go toe to toe to them. The category is going to change and maybe your sales are going to change. But that whole mindset and attitude and approach, that's, I think, a real game changer in these categories as well. And PPC is where a lot of that can be won and lost.
Ryan Cramer: I love that.
Laura McCaul: To be honest with you.
Ryan Cramer: Yeah, I love that, Laura. I think that's a good thing to keep in mind. Again, it's mindset and how you want to attack it. Entrepreneurial mentality is half the battle and what you want to try to make a chance on, or just kind of, like you said, take that step back approach. Vincent, obviously, a great content so far. So Vincent, thanks for listening on LinkedIn. I didn't even know we... Well, we do get some comments on LinkedIn sometimes, so that's always a plus. I love that.
Laura McCaul: I know inaudible Vincenzo crosstalk-
Ryan Cramer: Oh, Vincenzo, yeah. I said Vincent for some... I saw Vincent all of a sudden. This is what happens when you glance at a screen with 100 things in front of you, guys. It's like a producer's nightmare over here. Final thing for you Darrell and Laura, as I'm scaling internationally, and I think a lot of our customers that... at PingPong, they have this notion of when I grow internationally, it's scary to think that there's so many different strategies to grow in different marketplaces. There's over 20 now, Amazon marketplaces to date that you can sell your products on. If I'm in the United States and I'm doing really well, I personally think that this is year of growth, internationally for lots of different brands. And I think you're going to see a lot of" How do I make my brand more visible, internationally?" What is some of those myths that I'm taking my brand from one marketplace to essentially a whole different marketplace and culture and country and everything of that sort? What are the PPC myths that you guys have to educate people on?
Laura McCaul: That's a good question.
Darrell Paterson: Probably just the whole translation piece, I think is the biggest. I think we've seen a lot of people go from selling in the U. S. or selling in the UK, and then trying to expand quite rapidly into multi- marketplaces. And I think given the challenges already over the last couple of years, certainly with inventory and shipping issues and... That's one consideration is that that's all going to be multiplied potentially, right? I think from a PPC specific standpoint, like I said, the whole... Amazon are getting quite good now at reaching out with an account manager that will do all this stuff for you, and one of them is translation. So," Oh, if you're expanding to five European countries, we can translate all your keywords from the U. S." Well, that's all very good and dandy, but a lot of those words will mean absolutely nothing once translated. It needs to be done by a native speaker. That's makes a huge difference. I know when, even back when I was selling, I craft... Laura actually wrote my product list in, for the account in the U. S., and then when I went to Germany, I had them translated by Amazon, and it was crickets. And literally, all I'd done was gotten them translated properly by a native speaking German, and instantly picked up and took off. And I had some amazing sales before I got banned from Germany. Different story for a different time.
Laura McCaul: That's a different story.
Darrell Paterson: crosstalk different story. Yeah, crosstalk-
Ryan Cramer: Were you using words like foreign language or something like that? Just not appropriate.
Laura McCaul: He was using those words afterwards.
Ryan Cramer: Yeah, I'm sure.
Laura McCaul: And some.
Darrell Paterson: But yeah, I think that's huge, right? I think it's easy to try and shortcut and look at these different marketplaces as an easy way to just make some more money. But I think you have to treat them individually and go that extra mile, have any text overlays on your images, your A + Content, video, like have everything translated and make sure it's high quality. That's probably the biggest one that I see people mess up with is just trying to take what they've already got because they don't want to spend the extra money, and then try and launch in another country and wonder why it's not working.
Laura McCaul: Yeah. And I think added to that, actually, the difference as well between a UK listing and a U. S. listing. So I had the benefit when I was writing product listings, I'd lived in LA for five years and then I went back to the UK. So I like to consider, I was fluent in-
Ryan Cramer: You're fluent in West Coast speak.
Laura McCaul: In west coast, yeah. But it is a difference and when we do keyword research there would be a difference in the keywords for the same products. I mean, sometimes even the same products are called a different name. I mean, this isn't a story about a product listing, but I remember when I first moved to the U.S. and I was looking for what we call a foreign language, right? A coffee plunger??
Ryan Cramer: Mm- hmm( affirmative).
Laura McCaul: Right. And that's also called a French press.
Ryan Cramer: Right.
Laura McCaul: Yeah, I was walking around the inaudible, I was like, kind of doing this to people, and they were just like,"I don't know what you're looking for." But anyway, that's an aside. But the point is, is that the same products can be called completely different names. And then also, you can have completely different keywords. So even between the UK and the U.S., there's a difference, and then absolutely then, the European languages, you need a really... there's some really great localization services that will write your product listings by native speakers. However, the upside is to that, in terms of myths, so I think sellers might think," Oh, the easy part is the listings, I'll get that translated. PPC is the hard part." Actually, PPC isn't the hard part, because again, data is just data, whatever the language it's written in. So we are not fluent in Italian or Spanish or French or German, but we are well able to manage campaigns in all of those marketplaces. So yeah, the myth is that PPC is actually probably easier than the product listing part.
Ryan Cramer: Yeah. I think one of my favorite episodes talking about PPC is when I had Ritu Java from PPC Ninja, hopefully you guys know her.
Laura McCaul: Yeah.
Ryan Cramer: Just her master class she talks about in PPC in Japan, is mind blowing. Just the nature of four different cadences of language that you have to cater to and speak to is unreal, and I just had to think through that. It was like English, then Japanese, and then you had different subset languages that you also had to cater to, which were variations of picture, and again, I'm going to butcher this, it was like variations of picture and then just different types of ways to say that same phrase four different ways. And to me, it was just unreal. But in a third largest, one of the top four largest marketplaces in Amazon, that's something you have to overcome and you have to understand and develop and to be successful. And like most people here don't know, over there you can have products on labels in your pictures, and colors splashes differently. And unlike in the United States where you have to have certain things that you can't put in images and so on and so forth. I digress. But stuff like that where it's really hard to... you have to cater localized-
Laura McCaul: crosstalk.
Ryan Cramer: ...in different Languages. It's so cool and so crazy to think about.
Laura McCaul: That's super sophisticated. Yeah, absolutely. And and I think just one other thing, I think just to finish on the European thing-
Ryan Cramer: Sure.
Laura McCaul: ...is, and I know again, this is something that can catch some sellers by surprise, is just to account for the VAT. Because you really need to have very healthy margins to compete, I think, in Europe. I mean, each EU country has different thresholds for VAT, but I know for the UK, 20% at source, when you make the sale, is chunky. So I think, yeah, it's probably... it seems to be the things that maybe some sellers don't consider that kind of bites them in the butt. And then it's the, yeah, the other stuff that is more obvious is actually, yeah, is a lot more plain sailing. It's the stuff they haven't thought about, I think, that can trip them up, as opposed to stuff that they do think about, and if they think about it in the wrong way.
Ryan Cramer: Absolutely. Well, Laura and Darrell, you guys promised that we could talk forever on this and we've already burned through an hour of time. So for everyone, without going into another hour of this... And again, when I tell people they've made an hour through me, that I consider them now a friend of the podcast, so you guys are more than welcome to come back anytime. But for sake of your time, and your the end of the day already here, what is the best way... because I know we had a couple things that we wanted to make sure that you guys wanted to talk about. We had, you guys are having the Sponsored Profit PPC opportunity report, which we linked down in the comment section as well as in the show notes here. But what are the best ways to reach out to you, if you need people to look at your PPC strategy to help you kind of navigate whether internationally and domestically, wherever they might be selling, what are the best ways to do that?
Laura McCaul: Yeah, sure. No, appreciate the opportunity, and thanks for having us. So yeah, just go to our website, SponsoredProfit. com, and folks can get in touch with us or schedule a call. People can connect with me directly on LinkedIn. You'll find me on LinkedIn sort of LinkedIn/LauraMcCaul. But as I said, as well, I think show notes for that PPC opportunity report. We'll do a quick bird's eye view of their campaigns and then we can also follow that up with a call to talk about potential PPC strategies to help them achieve their goals. So yeah, feel free to reach out and we'd love to help you out.
Ryan Cramer: I love that. And Darrell's not on LinkedIn, or did I get that wrong, Darrell? You are and I couldn't find you?
Laura McCaul: He's not on LinkedIn.
Ryan Cramer: All right. Can't go on LinkedIn to find Darrell.
Darrell Paterson: I'm just a nerd locked in the cupboard doing all the PPC stuff.
Laura McCaul: Yeah, he doesn't do social. He's a PPC purist. I don't know. It's yeah-
Ryan Cramer: That's okay. He's off the grid.
Laura McCaul: Don't ask, Ryan. Don't go there.
Darrell Paterson: Off the grid.
Ryan Cramer: Okay. That's okay. For some reason-
Laura McCaul: Yeah, in more ways than one.
Ryan Cramer: Yeah, I was going to say for more reason, I thought... I was like," I'm misspelling this," or whatever it is. Nope, just no LinkedIn, so Darrell we can't point people in your direction. I'm assuming you have an email though, if they want to talk with you as well?
Darrell Paterson: Yeah, yeah, just darrell @ sponsoredprofit. com.
Ryan Cramer: Easy enough. All right-
Darrell Paterson: Easy enough.
Ryan Cramer: ...we'll stick with email for right now then. Well, both of you-
Darrell Paterson: Awesome.
Ryan Cramer: ...thank you so much. This has been a pleasure, it was a lot of fun talking to people. These kinds of conversations are easier to digest, and I think like Vincenzo said, just easy content to understand and take away and apply it to their business. Certain things that I never really thought of, that make a whole lot of sense that we got to talk about today. And like you said, if you have hours of content, I got hours of content to fill, so you guys are more than welcome to come back on and talk with us anytime whatsoever.
Darrell Paterson: Awesome.
Ryan Cramer: So are you guys traveling to shows or are you guys... going to see you in person anytime soon?
Laura McCaul: No, we're not. I'll be visiting the White Label Expo in London in, I think a couple weeks time. So yeah, I think that's our immediate travel plans.
Ryan Cramer: Gotcha. I didn't know if you guys were speaking engagements, so there's events that you guys were doing anytime soon. Gotcha.
Laura McCaul: None.
Ryan Cramer: No worries.
Darrell Paterson: The whole COVID thing, we've been holding off and holding off and waiting to see what's going to happen before booking anything up and-
Ryan Cramer: Same here.
Darrell Paterson: Yeah.
Ryan Cramer: I get my arm twisted. Last year I said no, this year I got my arm twisted more and I will be making an appearance on my first show at Prosper this year. So that's where I will-
Darrell Paterson: Awesome.
Laura McCaul: How nice. Good luck.
Ryan Cramer: Yeah. That'll be fun and interesting, a lot of people that... I get to shake hands and meet people in person. Like you said, the joke is, I've had... this is 200 and... what was this, 221? I've had 220 plus people I haven't met in person yet. So that being said-
Laura McCaul: Wow.
Ryan Cramer: ...we're going to do that for a lot of people in person here at Prosper. But both of you, thank you so much. I can't wait to meet you guys in person.
Darrell Paterson: Appreciate it.
Ryan Cramer: We'll have you guys back again here on Crossover Commerce, but thank you for your time today.
Laura McCaul: Thanks, Ryan.
Darrell Paterson: Awesome. Thanks for having us, Ryan.
Ryan Cramer: Awesome. No problem. And thank you everyone for coming on Crossover Commerce. This is episode 221 of my show that I like to call Crossover Commerce, my corner of the internet, where I bring the best and brightest in the Amazon e- commerce space. Thank you PingPong Payments for the sponsorship of this podcast. You can go to usa. pingpongx. com/ podcast for all of our past episodes. Season four just came out, audio version, so you can catch the 200s starting on the website now, with all the transcripts, all the takeaways, all the great content. But you can also follow us on social media, if you are not already, you should be. Or you can follow me on social media to know, get notified when future episodes come out. I'm excited, later this week, again, we bring great live content here on Crossover Commerce, I'll actually be having a colleague on here later. Confessions of an ex Amazon employee, sounds very scandalous and very hard hitting, but we're going to be having Eric from PingPong Payments. He used to work on the ACCS program over at Amazon. We're going to be having him on to talk about his time at Amazon, and again, what insights he might be able to share with us about growing your business online. That being said, I'm Ryan Cramer, this is Crossover Commerce, we'll catch you guys next time on another episode. Take care.
On Episode 221 of the Crossover Commerce Podcast, Ryan Cramer talks with Laura McCaul and Darrell Paterson of Sponsored Profit. They'll debunk common Amazon PPC myths.
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