Unitix Advertising Agency

Case Study: Boosting Sales and Reducing ACOS in the Competitive Automotive Category on Amazon

Market Situation:

The market is dominated by several well-known brands with strong listings, featuring numerous positive reviews and offering products at competitive prices. Our product is positioned as the most expensive option within the "Automotive" category on Amazon.

Objective:

Unitix Agency was tasked with increasing sales and profitability for a client's product in the highly competitive "Automotive" category on Amazon. The challenge was to attract new customers and boost brand recognition in a market filled with established brands. The client faced difficulties in scaling the product's performance, primarily due to the product's limited semantic scope which complicated efforts to efficiently increase advertising spend. This resulted in a higher cost per click, ranging between $3 to $4, making it essential to strategize effectively for enhancing the product's market presence and sales.

Before Working with Unitix Agency: December 2022.

Unique Value Proposition:

Our client's product distinguishes itself with its high-quality materials and craftsmanship, positioning it as the preferred choice for shoppers looking for high-quality automotive products on Amazon. This advantage allows our client's offering to stand out amidst competitors who cater to lower price segments, offering unique value to consumers who prioritize superior quality.

Advertising Campaign Audit and Optimization:

An analysis of our current advertising campaigns revealed a very low conversion rate, limiting our ability to achieve the desired sales. In response, we implemented a strategy that included comprehensive keyword research using Brand Analytics and Helium10. We categorized keywords by frequency, primarily focusing on an Exact match structure, and supplemented the campaigns with phrase and broad match modifiers due to the product's narrow semantics. Our focus was not only on increasing volume but also on boosting organic sales, hence we prioritized top placement for our main PPC keywords (despite the cost), aiming to solidify our positions in sales for specific keywords. Working with top placements played a crucial role, as our main keywords eventually performed very well at the top. There were no limits on the advertising budget since it was challenging to scale the spend at all. By October 2022, our brand began to be searched by branded keywords, and our keywords started to show Search Volume. We also utilized all available advertising formats, including Sponsored Product, Sponsored Display, and Sponsored Brand, to cover all advertising placements.

Promotions and Discounts:

Given our product's high pricing strategy compared to competitors, we decided to offer a 20% discount coupon. This was complemented by specialized promotional campaigns aimed at strengthening the brand and increasing consumer interest.

Listing Optimization:

In close collaboration with the client, we conducted a comprehensive optimization of all listing elements, including revamping the title, expanding the bullet points and descriptions, enhancing A+ content, and updating the main photos. We also updated the Backend with new search terms.

Results:

From the very first month of our engagement, we were able to ramp up spending and successfully increase sales.

Before Our Involvement: December 2022.

Before Working with Unitix Agency: December 2022.

Current Results: January 2024.

Performance Metrics Before and After Our Involvement:

Before Our Engagement:

PPC Sales per month: $313.99
Spend per month: $94
ACOS: 29.95%

After Our Strategies Were Implemented:

PPC Sales: $13,277.54
Spend: $3,218.78
ACOS: 24.24%

These results demonstrate a significant improvement in sales and advertising efficiency, highlighting the success of our targeted strategies in the highly competitive "Automotive" category on Amazon.

These results showcase a significant improvement in sales and advertising cost efficiency. Specifically, total PPC (Pay-Per-Click) sales increased from $313.99 to $13,277.54 per month, indicating substantial progress in customer acquisition and profit generation through advertising campaigns. Advertising expenses rose to $3,218.78, but given the considerable increase in sales, the ACOS (Advertising Cost of Sales) decreased from 29.95% to 24.24%, demonstrating an increase in the efficiency of advertising investments.

These figures confirm the success of the strategies we implemented for the optimization and adaptation of advertising campaigns, including a detailed audit of existing campaigns, keyword research, targeted advertising on competitive ASINs, use of various advertising formats, promotional discounts, and comprehensive listing optimization. Given these metrics and the strategies employed, we can conclude that our approach to marketing and advertising in a competitive segment has been effective, significantly impacting sales increases and brand visibility improvement.

Challenges and Solutions:

Challenges:

The product had a narrow semantic range for advertising, complicating the scalability of advertising expenses in competition with more affordable, well-known brands.
The brand faced limited visibility and recognition in a competitive category.

Solutions:

Conducted a detailed audit and optimization of advertising campaigns to address these issues.
Employed keyword research and targeted competitive ASINs to refine our advertising focus.
Utilized a variety of advertising formats to broaden reach and engagement.
Offered promotional discounts to increase consumer interest and incentivize purchases.
Optimized product listings to improve visibility and attractiveness, making the brand more appealing to potential customers.

These strategic responses enabled us to overcome the initial challenges, leading to significant improvements in sales performance and brand recognition within the competitive "Automotive" category on Amazon.

In January 2024, ad sales soared to $13,277.54 with a significant decrease in ACOS to 24.24%, showcasing improved cost-efficiency in advertising.

Conclusions

Our strategic approach to addressing initial challenges led to a significant improvement in sales and advertising efficiency. Focusing on a multi-faceted marketing strategy, including detailed campaign optimization, targeted advertising, and product description enhancements, allowed the product to increase sales and brand recognition. This case study highlights the importance of adaptive strategies in competitive markets and the effectiveness of comprehensive campaign management and optimization. It demonstrates that with the right approach, even products facing high competition and market entry barriers can achieve remarkable growth and visibility on platforms like Amazon.