Unlocking Advertising Efficiency: How to Reduce Organic Sales Cannibalisation on Amazon

In the fast-paced world of Amazon, brands often encounter a costly challenge: organic sales cannibalisation. This occurs when inefficient advertising strategies lead to unnecessary ad spend, targeting sales that would have occurred organically. At Market Rocket, we’re committed to helping brands unlock their advertising potential while maintaining profitability. 

What is Cannibalisation?

Cannibalisation occurs when paid advertisements target keywords or Amazon Standard Identification Numbers (ASINs) for which products already rank well organically. This situation means the brand is spending money on ads for sales that would likely have happened without any advertising. As a result, the phenomenon inflates the Advertising Cost of Sales (ACoS) and reduces the overall profitability for the brand.

Common Causes of Cannibalisation

1. Over-Reliance on Branded Campaigns

Branded campaigns are necessary. They help protect search visibility. However, they can take up too much of the ad budget. In fact, many conversions from branded campaigns are from customers who would have bought the product through an organic search anyway.

2. Keyword Overlap

Campaign data often shows an overlap between paid keywords and keywords where the products already rank well organically. This overlap results in wasted ad budgets on traffic that could have converted without any paid effort.

3.  Lack of Focus on Incremental Growth

There is often insufficient ad spending directed at low-ranking keywords that have high potential. This misallocation of resources hinders the ability of a brand to expand its market reach. This leads to the loss of numerous growth opportunities.

How Market Rocket Solves Cannibalisation

At Market Rocket, we’ve developed a tailored approach to minimise cannibalisation and optimise campaigns for both paid and organic growth:

1. Optimise Branded Campaigns

Initially, bid strategies for branded campaigns are refined. This maintains visibility while also minimising unnecessary spend. Ultimately, this approach ensures that advertising efforts are cost-effective and impactful for the brand.

2. Reallocate Ad Spend

Next, budgets are shifted to low-ranking, high-potential keywords and ASINs. This helps brands to drive incremental sales. This strategic reallocation also unlocks new growth opportunities.

3. Dynamic Bid Adjustments

Bidding strategies are designed to prioritise placements based on terms. Specifically, these terms refer to products that do not rank on the first page organically. Therefore, this ensures maximum visibility in the most critical areas.

4. Split Testing

Furthermore, A/B testing is used to identify keywords and placements that are prone to cannibalisation. This data-driven approach allows for the refinement of campaigns. This leads to an improvement in overall efficiency.

5. Performance Monitoring

Finally, Key Performance Indicators (KPIs) are established. These KPIs track organic and paid sales simultaneously. This holistic monitoring ensures that advertising efforts complement, rather than compete with, a brand’s organic growth.

The Results: Smarter Advertising, Greater Profitability

By minimising overlap and wisely shifting advertising spending to areas with high growth, this method helps brands reach important goals. Firstly, brands can significantly increase profitability through the elimination of wasted ad spend. This leads to a notable boost in conversions, accomplished via more targeted and efficient advertising campaigns. Overall, a balanced strategy ensures the attainment of sustainable, long-term growth.

Ready to Optimise Your Amazon Advertising?

If your advertising strategy isn’t delivering the results you need, it’s time to rethink your approach. At Market Rocket, we specialise in crafting customised solutions that drive category dominance while optimising ROI.

Want to see your Amazon performance skyrocket?  Book a call with our team or email us at amazon@marketrocket.co.uk to take your brand to the next level.