The Benefit of Rules-Based Advertising for eCommerce
Sometimes it can be difficult to see the benefit of spending money on advertising. However, that doesn’t mean all ad spend is bad or useless. Here at Pattern, one of the things that sets our advertising approach apart is that we don't advertise by the book—we take advantage of technology to help our ad experts get the job done quicker and more efficiently.
Pattern’s proprietary rules-based advertising software and implementation team can make a whole world of difference for brands looking to create an efficient advertising strategy. We sat down with our advertising experts here at Pattern to discuss the benefits of our rules-based advertising approach.
Why is rules-based advertising better than normal advertising?
Rules-based advertising could be synonymous with advertising optimization. Rather than spending valuable time and resources to manually adjust keyword bids based on certain advertising criteria, a rules-based system increases one person’s bandwidth exponentially, says Tana Cofer, Pattern’s Senior Digital Advertising Strategist.
“All the brands can be optimized every day if you wanted them to be instead of it being manual because we set it up at a campaign level,” Cofer said. “So the rule can be that once we hit $500 in sales, we drop the keyword bid 50 percent. Or we could say, once we reach 1000 impressions, we will increase the bid—we can make it whatever we want it to be. We customize the rules per brand, per strategy.”
Setting up these rule-based strategies means that Pattern’s team of 12 advertisers can effectively do the job of 100 because each person can monitor between 10 and 15 brands. Rather than monitoring each ASIN for each brand, they can simply apply a rule to each ASIN or to a product family to get results for that brand’s unique advertising strategy.
Rules-based advertising also streamlines the process of effective keyword discovery. By running rules on hundreds of keywords, our advertisers can quickly hone in on the most efficient keywords to make the budget go further.
“That's been super clear as we've run these campaigns. A month prior a brand will have 5,000 keyword bid changes, and now they only have 100, and that's actually a good thing,” Cofer said.
Myth: Focusing advertising on top-selling products means more growth
A common misconception with advertising is that spending more (or exclusively) on top-selling products is inherently better. However, according to Cofer and Pattern’s Advertising Director, Tony Morales, there's a better way. Dedicating efficient and intelligent ad spend across a wider variety of products will actually grow your brand in a more effective way and will reach a larger audience for your brand to resonant with than continually throwing money at top-selling products.
"The rules-based advertising method allows us to structure our campaigns by individual products, allowing each product a chance to shine—giving them an opportunity to become a top-selling product for a brand," Cofer said.
Morales agreed. “We recommend you invest more dollars when it's more efficient, and that's actually going to help you to sell more product,” he said.
So it goes that depending on your strategy, your spend will differ. For example, if you’re conquesting to win the Buy Box, your ACoS (Advertising Cost of Sale) will end up being much higher. If you’re just trying to maximize profit margin on a certain keyword, your ACoS will come out completely different.
Understanding this nuance is important to understanding how our rules-based advertising software works and why Pattern’s advertising team strategizes the way it does. After all, advertising is simply part of the eCommerce game. To win though, you’ve got to have a strategy and spend efficiently. Pattern's rules-based system allows our ad team to do exactly that.
What does Pattern’s rules-based advertising software actually do?
Pattern’s advertising software helps our advertising team set rules (i.e. optimize) for over 20 different advertising metrics for our 3P partners on Amazon.
“Our system allows you to create any number of rules that are based on different metrics like ACoS, click through rate, clicks, conversion rate, conversions, cost, cost per click, impressions, keywords, page rank, and much, much more,” said Matt Smith, Pattern’s Principal Developer who has worked on our advertising software.
With our rules-based system, advertising experts like Tana can make advertising efficiency happen faster across Amazon marketplaces. Then with our reporting tool, Predict, our partners can monitor exactly how much their ACoS is and how effective our team’s advertising strategies are.
Here at Pattern we’re always working to make our software better for our partners. Eventually we’ll be able to offer even more advertising capabilities to help our brand partners keep optimizing their advertising strategy and ad spend efficiently. For now, we continually work toward an advertising equilibrium with our partners to start small, get it right, and then move on to bigger and better things.
“Over time, as you're working with a client you're moving toward equilibrium. There's never a true equilibrium—there's always going to be some fluctuation—but over the course of 90 days or 180 days we've identified our keywords, we've found our sweet spot for bids, and then from that we’re implementing different strategies where we're A/B testing among other things,” Morales said.
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