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Top 5 Challenges Amazon Advertising Agencies are Facing

Over the past two months, RevenueWize conducted a research program and  reached out to over 20 Amazon advertising agencies to understand the challenges with Amazon PPC advertising. The challenges raised were diverse, and we’ve narrowed them down to the top 5 advertising challenges which were most popular.

Challenge #1 – Staying Efficient While Growing the Business

Many Amazon advertising agencies find it challenging to remain efficient while supporting their growth. Considering the continuous expansion of Amazon advertising options, managing advertising accounts has become very time-consuming and complex. Managing a large brand might require up to a day’s work per week and creates a limit on growth potential. Client reporting is another area many agencies claim to spend a lot of time on and find inefficient.

Third party tools have been developed to help improve work efficiency. Some of these tools are pretty expensive and complicated, so they require a high learning curve. Many agencies have adopted the bulk operations approach using files, while some have invested in developing their internal solutions.

Whichever option an Amazon agency selects it is crucial to find a path to growth without it being highly dependent on human resources.

Challenge #2 – The “Target ACoS” Quandary

Clients tend to have their minds around a Target ACoS for which they’d like their account managed. There are times the Target ACoS  is non-realistic, and we need to convey this to the client and set their expectations accordingly. 

But that’s the easy part. 

It becomes challenging when the Target ACoS our client has in mind is not necessarily in line with their overall objective. Such an objective can be generate growth or launch a new line of products that require increasing budgets for and in the short term, might result in an increased ACoS. 

Successful agencies ensure to set their short and long-term goals in advance and set expectations accordingly.

Challenge #3 – Generating Growth within Budget Constraints

Similar to the target ACoS restrictions, in this case, the constraint is budget-related.

Clients tend to provide a budget constraint and while it is not ACoS related we know it acts in a similar way. Sticking to a budget makes sense although it can pose a challenge depending on the product lifecycle. 

  1. Launching new products requires an investment budget, and if we know our client is planning to launch more items in the future this should be taken into account as part of the constraints. 
  2. Mature items that have a track record and history are easier to maintain within a budget although these too require taking into account ongoing changes in the market.

Always plan ahead and set a roadmap with your clients to ensure alignment with the short and long-term objectives.

Challenge #4 – Creating Transparency for Clients

One of the challenges raised by Amazon Advertising Agencies in the research study surrounds client transparency and exposing their clients to the work they are conducting on their behalf.

While all agencies prepare detailed reports for their clients’, such reports are typically loaded with data and clients tend to have a difficult time reaching actionable conclusions through the spreadsheet reports which brings them back to the ACoS/ROAS as the main success indicator.

During times of hypergrowth and prosperity clients tend to require less transparency as the numbers speak for themselves. It is when we encounter challenging times it is important for Amazon advertising agencies to convey their work and be able to have discussions with their clients around their tactics and actions.

Leading agencies find the means to convey their work to their clients in a clear and transparent way to build confidence.

Challenge #5 – Identifying Growth Opportunities in Highly Competitive Landscapes

One of the main challenges reported is around growth opportunities. Whether these are new or existing products it isn’t trivial identifying what can expand growth and trial and error can be pricey. 

Amazon Advertising Agencies we have spoken with mentioned that many of the third party tools they have tried didn’t provide a complete or easy-to-use solution.

Moreover, when it comes to launching new products most agencies have developed their own standard operating procedure and mentioned third party tools they’ve tried aren’t helpful during the product launch phase.

About RevenueWize

RevenueWize is an Amazon advertising optimization platform for agencies and brands looking to grow their business. The RevenueWize platform continuously analyzes the ad spend performance and generates recommendations on growth opportunities and areas of wasted ad spend.

Amazon agencies working with RevenueWize are typically reporting:

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