For those not yet familiar with the Headline Search ad type, it is supported by Amazon Marketing Services (AMS), the ad platform made available to Amazon vendors. Third party sellers (Seller Central sellers) often gain access to AMS by signing up as a “vendor” with a poor performing product.
Why pretend to be a vendor if you are a third party seller?
Headline Search ads are especially powerful because they show up at the very top of search results, even above the other forms of Sponsored Product ads. In Amplio’s own experience, Headline Search tends to be the next most effective ad type, after Sponsored Product ads, in terms of driving revenue, brand and awareness.
The news that Headline Search is migrating to Seller Central is exciting, yet not altogether surprising given rumors that Amazon has shifted priority from vendors to third party sellers.
Amazon has shifted favor from vendors to third party sellers.
Amazon receives substantial fees from every order shipped by third party sellers. Plus Amazon doesn’t take on any risk if the inventory doesn’t sell. In fact, if the units don’t sell, Amazon can charge long-term storage fees to third party sellers. Amazon doesn’t even need to concern itself with listing optimization or pricing. Whether the third party seller succeeds or fails, Amazon wins.
Under a vendor relationship, Amazon buys the product from the vendor, betting that the product will sell. Amazon takes on the risk of holding the inventory, optimizing the listing and in short everything needed to sell the product on their platform because they now own the product. If the inventory doesn’t sell, then Amazon loses.
Headline Search Ads = Competitive Advantage for Vendors
This brings us to why AMS offers two additional ad types (Headline Search and Product Display). Since Amazon risks not making a profit if the product doesn’t sell, Amazon provides vendors and really itself, with a slight edge over third party sellers in the form of advertising. Thus, Headline Search and Product Display: two ads types not available to third party sellers on Seller Central.
Third party sellers have been openly signing up as “vendors” simply to gain access to AMS. Still, Amazon hasn’t yet gone so far as to promote this as an option for third party sellers. Now that Amazon has observed the advantages of the third party seller relationship, they will be making moves migrate AMS functionality over to Seller Central, starting with Headline Search ads.
Spend now, expensive clicks are coming!
Overall, let’s hope that Amazon moves quickly to migrate AMS functionality over to Seller Central. Interacting with AMS can be challenging at times, like when your product loses buy box on a listing with other sellers or when trying to extract performance data from your campaign. That said, you can bet that after Headline Search is made available to the mass market of third party sellers, clicks will get more expensive.
If you’re running Headline Search in AMS or haven’t yet signed up as a “vendor,” take a step back and appreciate those returns for what they are. Consider ramping up spend despite the lack of reporting functionality and risk. Headline Search is coming to Seller Central soon for better or for worse, depending on your perspective.