As tariffs threaten to drive up shipping and manufacturing costs, many Amazon brands and sellers are rethinking their ad budgets.
Now doesn’t feel like the time to stop marketing—but how do you reapportion your marketing dollars to get more bang for your buck?
So far, according to WIRED, the tariffs have not significantly driven up the cost of goods on Amazon yet. Everyone is holding their breath for that to happen.
Instead, Amazon sellers are funneling their marketing dollars into new formats. They’re diversifying their marketing tactics to cut back on their overall ad budget without, hopefully, losing out on customers in the process.
Here are a few tactics we’re seeing.
Where are brands putting their money to combat tariffs?
The last thing most brands want to do right now is raise prices. Although price hikes are not always such a bad thing, it’s always worth considering ways to restructure your budgets before you make that choice to raise prices.
Marketing is obviously just one component of this. Most brands also need to think quite a lot about their shipping and fulfillment costs. They also might consider eliminating low-cost or low-margin products altogether.
But when it comes to marketing, here are some of the places we are seeing businesses park their money instead of ads.
Prioritize new digital and physical channels. A growing number of sellers are moving their marketing spend away from purely Amazon ads.
We’re seeing brands and sellers spend their money on alternative marketing strategies. They’re spending on influencers, gifting products to minor celebrities, and running social ads on TikTok and Instagram.
Others are getting back to the tried-and-true physical marketing basics, like sending out physical mailers and postcards.
These are all great strategies—but to work, they require strong measurement.
The power of a direct Amazon search ad is that you can now really easily measure how many of the people who see an ad eventually purchase from you.
But what about if you want to tie these multi-channel marketing efforts directly to Amazon purchases? To prove they are working?
Connecting your first-party data to AMC is one way to do this. If you upload the email addresses of the recipients of your mailers, for instance, Amazon will match—in a hashed, privacy-safe way—your shoppers to its shoppers.
That way, you can see directly if those mailer recipients did ultimately buy from you on Amazon.
At Intentwise, we’ve seen how effective these first-party uploads can be firsthand. We’ve worked with brands who sent out physical mailers, for instance, and then re-targeted those recipients with Amazon ads through 1P audiences.
Optimize your content for Rufus. As we discussed recently, a small but growing cohort of shoppers are using Rufus, Amazon’s AI shopping assistant, to discover products.
It’s pretty simple: Shoppers ask Rufus to help them find a product, e.g. “Show me a dog bed under $50,” and Rufus replies with a list of suggestions.
Rufus does allow ads, but many brands are also trying to optimize their Amazon content to maximize their odds of getting recommended by Rufus organically.
Rufus automatically asks shoppers a series of question suggestions for each type of product. As Modern Retail wrote, a pet bed, for instance, might get a question like “Are the covers machine washable?”
Brands are playing around with Rufus to figure out which suggested questions tend to come up most for their products. Then, they are putting those questions and answers into their product listings.
Since Rufus is ultimately scraping Amazon pages to find the most relevant product, the idea is that engineering your page for Rufus will boost your likelihood of showing up there.
It’s a way to get a lot of visibility, without spending a ton on ads.
Think about the whole funnel. The truth is, it’s hard to jettison Amazon ads altogether—and you really shouldn’t. Instead, you want to think about your Amazon ad strategy much more holistically.
How can you get the most mileage out of your ad dollars?
The answer is to take advantage of all parts of the marketing funnel, and then closely measure what is working and what isn’t. Once you have that data, reallocate your spend accordingly.
Search ads are important, but they aren’t the end-all-be-all. For a truly efficient ad campaign, think about Sponsored Display and DSP ads. Look for ads that can reach big, generic audiences that might actually pay for themselves down the line.
These shoppers might not buy from you right away, but if they search “toothbrush” a few weeks later and see your product in the results, you can potentially convert a sale without having to spend a ton on search ads.
The key is to track, on a really granular level, which of these top-funnel campaigns are actually working. As we discussed in our whitepaper, using Amazon Marketing Cloud lets you see the full path to purchase for your shoppers.
That means you can see which of those awareness-focused campaigns drove the most shoppers to buy from you later, even if they saw another ad in between.
Our recommendation: Experiment up and down the funnel, and keep a close eye on what’s driving conversions. Then, put your spend toward those campaigns you already know are highly efficient.
What does this mean for the future of marketing budgets?
As costs keep creeping up, we are in a moment of marketing efficiency.
Brands don’t want to lose out on new customers or opportunities… but they also need to reduce the amount they spend overall.
Focusing on measurement, through a platform like AMC, is the best way to cut through the noise right now. Try marketing on different channels, try influencers and mailers, try different parts of the funnel.
But at the end of the day, no matter what route you choose, make sure you have a way of calculating which of those campaigns are really driving the most bang for your buck.
That way, you can identify the ad strategies your brand needs during lean times.
Intentwise Explore, for what it’s worth, makes this extremely easy. We help brands run queries and audiences for AMC automatically in the background, and we display their performance in powerful, auto-refreshing dashboards on our platform.
You can see what’s really working, at little cost to you, with a glance.
