Variable Pricing Model: Best Strategy for Improving Amazon RoAS
In 2022, Amazon made $31B in ad revenue, revealing how its advertising business has become a profit center and essential for brands to drive traffic to their product listing with Amazon’s advertising products. Yet, success on Amazon shouldn’t always mean a higher ad spend–just a more strategic ad spend.
We hear from executives that it is frustrating to spend so much on advertising on Amazon without a jump in sales.At Pattern, we’ve had success on Amazon for hundreds of brands using a variable pricing model to determine ad spend to help save a brand money and increase sales in the long run. Our proprietary technology helps brands figure out where to put their Amazon advertising dollars, and which investments will bring the best results.
Here’s more about why variable pricing models work on Amazon:
What is the Amazon Variable Pricing Model?
Everyone wants the best return on ad spend (RoAS) possible, especially on Amazon. A variable pricing model on ad spend means having the flexibility to adjust your ad spend and allocate the money to different areas. Variable pricing strategy requires solid data and information so you can make the best decisions that will lead you to an optimal RoAS.
Key Benefits of Using a Variable Pricing Model
Improved RoAS on Amazon
Increased knowledge for making strategic advertising decisions
Enhanced product content backed by data-driven insights
More up-to-date information on how to spend your advertising budget
Further insight into your true RoAS
Higher number of keywords you can win on
How Pattern Improves Your Amazon RoAS
There are a lot of different opinions and ways to improve your Amazon RoAS, but one way we know that works time and time again is to vary your ad spend based on recommendations from comprehensive thorough and current data and research.
At Pattern, we use our Predict™ software to run variable pricing models to help brands identify which keywords on Amazon they’re already winning and which ones to optimize and advertise for focus on optimizing and advertising for.
For example, a brand selling socks for men and women on Amazon might put efforts into using the keyword “socks” for their product, but Predict™ software will help identify alternate and more efficient keywords to bid on– keywords such as “women’s running socks” or “running socks for men”.
Figuring out how to best utilize your ad spend can be a difficult and frustrating process. A lack of resources, reports, and data can lead to an inaccurate RoAS and false sense of success. As a top seller on Amazon, Pattern has helped hundreds of brands increase their organic rank by making better and more efficient use of their advertising spend using our Predict™ software.
Pattern’s advertising goal is for your brand to increase your organic rank on only those keywords which you have the mathematical propensity to win. How can we know that propensity? Our proprietary data that helps predict where to put your ad spend. A variable pricing model helps brands to follow the ebbs and flows of selling on Amazon and constantly adjust their advertising strategy.
Looking to improve your RoAS on Amazon with a variable pricing strategy? Contact us.