James Dihardjo
So Joe, thank you so much for making time in I think this is the first thing in your morning. I just wanted to handball straight to you mate and just say, just get you to explain, who you are, what you do, and tell us about your business as well.
Joe Shelerud
Yeah, for sure. And thanks for having me on, James. Like, yeah. So, just for anybody who's not familiar with me or Ad Advance, so I started as a seller on the Amazon space in 2014. I'm a chemical engineer by training, got my MBA and all that good stuff. But I started selling these organic chemistry molecular model kits on Amazon. They're used for organic chemistry courses, so I was reaching out to like different professors and getting these like as recommended course materials and all that good stuff. Was growing up that brand and as I was reaching out to different agencies at the time, found that what I was doing was either more complex or strategic than what I was hearing out in the market.
So, that gave me the idea that you know, maybe I can help with some other sellers. And so that's kind of been the founding of Ad Advance. We focus on Sponsored Ads, DSP, and driving external traffic through Amazon attribution. We've got our own tech and system that we built up on the backend, which lets us do a lot of cool things with the data and see a lot of cool trends that are happening. And so that's just a quick snapshot of us.
James Dihardjo
Interesting Joe. You never failed to impress me, man. Chemical engineering. That's just, that's just insane, dude. So, moving on from the stuff I have no idea about. Obviously, we met at Prospers recently, right? Like, what did you think of it and what did you take away from that?
Joe Shelerud
Yeah. So Prosper was awesome. And first, it was awesome to meet you in person. That was really fun. Prosper's great. Like I love these conferences for a couple of different reasons. And I mean, the first is that we have this awesome Amazon community. It's so fun to see how people come together and whether it's different agencies that well, you could call us direct competitors. Like I've got a ton of great friends who work for direct competition. So it's just we're in such an awesome growing space that there's so much of a community out there. So that's the first thing that I really enjoy. And just being able to meet people in person that you've seen online so often.
The other thing that I really enjoy too is it just gives us a good pulse on where the industry is currently at and where it's going. So, you always hear different trends coming up in the different speaker sessions. You can hear a first-person from different sellers and what's their key pain points as you go. So that's another key reason why I love these conferences. It's just connecting with people who are doing this day in and day out. And you can just connect on a different level when you're in person. So overall, got a lot of great takeaways from Prosper. How about you?
James Dihardjo
Yeah. Look, obviously meeting you is the number one highlight given that I look up to your content man. But yeah, I think I'm the same like meeting people I've known online and I think. Yeah, I have a lot of great friends that are competitors as well. And I think it was great to collaborate and I think collaborating with everyone, yourself included, has just helped grow our business and I'm assuming others businesses too. So it was great.
Joe Shelerud
For sure.
James Dihardjo
But, into the nitty gritty Joe. So I know you're a data guy, right? So, recently Amazon has made a whole more data points available via API, namely the kind of brand analytics or whatever. All that data is now available. Like you can get crazy levels of data points, traffic and all that kind of stuff. What do you think the implications of this is for yourself or for tools or what does it mean with so much data now available?
Joe Shelerud
Yeah. So the first key thing is just choosing what you're actually going to use or take into account. And so, there are so many different data points that we can pull in so many different endpoints now available via API that whenever we're looking at bringing something in, we have to have an end goal in mind for how we're going to use it. So like brand analytics, this can be a great way to use, say different product targets that show up in some of their reports and be able to use these as a starting point for different campaigns that we have.
Business reports now, including sessions, we can finally get like organic traffic data, like that's been a key request that we've had for so many years. Like now being able to see actual organic or overall conversion rates for your listings and not just Ad conversion rates. Like that's truly powerful and we can tie that into like our bidding algorithms. Just the more complex data that we can get. If you can use it effectively, there's going to be some niches that you can really take advantage of.
As we know, competition continues to increase on the platform. Last year we saw a cost per click go up about 30 cents on average. This year as in 2020, we've seen a kind of flat line out, but it'll be interesting to see what Q4 has in store for us. So I think the key implication with this increased data, is there ways that we can tie this directly into the strategies that we're going to implement into the optimizations that we have available so then we can try to find say those underserved niches where the competition isn't as high and we can really focus there to increase performance.
James Dihardjo
Yeah. Good. I guess good points you make there. And I think with so much data available, it is important to bring down what's important to whoever it is you are in relation to Amazon. That's a good point. So just on that, like obviously there's this being, this data are now being released, different things change with Amazon all the time. what is your top prediction for this year? And I mean, that could be absolutely anything, Joe. I'm, I'm keen to kind of hear where your minds are.
Joe Shelerud
Yeah. I mean, so high level if we look at the Amazon Advertising space and just e-commerce space in general. So we recently went through and just like did a quick scroll, did a quick search, and tried to find all the Ads that we saw on Amazon just doing this quick search. So we did an example where we looked at big dog chew toys. And within 39 seconds, I believe we came across 46 Ads.
And so on Amazon, they're becoming saturated with the amount of Ads that are on the website. And so they're simply not going to be able to add more Ads without impacting the customer experience. And so the only way for them to increase Advertising revenue or spend is: One, with an increase in cost per click. Two, is an increase in overall traffic going to Amazon.
But I think the major focus and we're seeing this in some of the new products that they're releasing, is now off Amazon Advertising. And so essentially what you're doing is you're using Amazon's data to define these core audiences who are going to be interested in your products and be able to Advertise off of Amazon. So for instance, if I search for dog chew toys, that's probably a good indication that I, or somebody that I know has a dog. And so that could put me into a category that says, all right, potential interest in dogs. And now I could target that category, or that market, and start showing Ads off of Amazon for other dog chew toys or other dog accessories, other dog treats, and you could start seeing these Ads show up off of Amazon.
So for instance, if you're on weather.com, if you've ever seen an Amazon listing that you just recently looked at, like that's an example of an off-Amazon targeting. So, I really see a huge focus on increasing Off Amazon Advertising. They're going to try to release some more products, which makes it easier to implement Ads on Amazon.
But in terms of like focus going forward, I think they've hit the saturation point on Amazon and now a key focus will be off Amazon.
James Dihardjo
Yeah. Interesting. And I think that what you say makes total sense. Just for the people out there, in Australia for example, where this off-Amazon thing is probably not as well known.
Joe Shelerud
Sure.
James Dihardjo
As perhaps in the US. You mentioned weather.com, but can you give us some more examples of what off Amazon really means. Like, from your part of the world.
Joe Shelerud
Yeah, yeah, no, great question. So, there are two different ways right now that we can target off of Amazon. So, the first is through Sponsored Display Advertising. So Sponsored Display Advertising allows us to target both on and off of Amazon. So on Amazon, there's placements like below the buy box or below the bullet points in the product detail page where these Ads will show up. But they'll also show up off of Amazon.
And so some instances on how this works is you have different websites, different content providers, and they're selling Ad space. And so they get hooked into Amazon's third-party network, to display their Ads, and then based off of bids that come through and an auction in the background. The most, highest paying Ad gets shown on third-party sites. And so, what we can do is through sponsor display or DSP. So if you've ever heard of Amazon, DSP, Amazon DSP gives us a ton of tools that allows us to really define these different audiences.
So in the dog chew toy example, we want to find people who we think are going to be very interested in buying dog chew toys, say if they went on and didn't purchase. So for DSP, we could say, all right, if somebody searched for dog chew toys, but they didn't purchase X, Y, and Z, let's show them Ads. Or if they visited my product detail page, but they didn't purchase from me, let's show them, more ads for our dog, chew toys to hopefully bring them back to complete their purchase.
And so through Sponsored Display in Amazon DSP, which gives us a lot more controls, we can use that audience data, which is really key. With DSP, we can switch up our creatives and how our Ads look, and then we can control bids and different strategies, which then show these Ads to the most relevant people off of Amazon. And then these content providers, these websites kind of provide the code which allows these Ads to be displayed. They get compensated for those Ads being on their websites, so they get paid. And hopefully, we're targeting the right people who are interested in our products, which sends them back to Amazon to complete the final purchase, and everybody's happy.
James Dihardjo
Get it. That makes sense. And thank you for explaining that in a way that people without a chemical engineering degree can understand.
*(Both laughs)*
Joe Shelerud
For sure.
James Dihardjo
That all makes sense. So just final thoughts Joe. And I know you're like an Amazon guy through and through, but how do you personally feel about selling on Walmart in addition to selling on Amazon? Like what do you personally think of that?
Joe Shelerud
Sure. Yeah. I think it's a great strategy if you've got the scale for it making sense. And so, you know, with Amazon, it's a huge ecosystem, a ton of traffic going to it. Walmart's the second biggest player in that space, but traffic's a lot lower than Amazon. And so if you already have solid sales on Amazon, I think going to Walmart, makes a ton of sense, and you just had to weigh the time and the cost benefits to now manage multiple different platforms with multiple different quirks as you go. So, I think Walmart's going to keep growing. They're investing in quite a bit, their e-commerce channel.
They have some advantages over Amazon where they have so many stores scattered throughout the US and in many locations, we can get, so we can get shipments really quickly from Walmart. And so I, I think that really focusing on Walmart along with Amazon and also looking at other e-commerce channels definitely makes sense as long as you have the scale and the time to be able to put the time into it that's really needed.
If you and you just put a listing up there and hope it goes just like on Amazon, that's not going to work. So, the key thing is just making sure that you've got that investment and that volume to make that commitment worthwhile. But I think the platform's going to keep growing just like Amazon in the early days. I feel like establishing yourself early on, is going to be a key thing that helps you for your long-term growth. So yeah, starting as a seller, I totally encourage it. Focusing on multiple channels. Being diversified to make sure if one channel goes down, that you've got other alternatives is also a key critical thing to keep in mind as a seller.
James Dihardjo
Well Joe, I honestly did not expect that answer from you. Super, super pragmatic. But the bonus question, which I didn't put in the email is, what does that mean for Ad Advance, like, you know, for your business? Like, do you think that, you'll be kind of supporting people with Walmart?
Joe Shelerud
Yeah. So the key thing that's kept us from getting into Walmart right now is getting API access has been a tricky process. And so once we can get API access and we can fully connect our software in there, we want to make sure that we've got the tech available before we jump into that channel. And so we want to be great at it when we go into any other channel. That being said there, there are a lot of other interesting things that are going on in the space trying to drive external traffic to your Amazon listing is another key thing that we're looking at right now.
And so while we may not be supporting Walmart right now, we're starting to support Google and using Amazon attribution to drive other traffic back to Amazon. And so, there are a lot of other channels that we're looking to potentially incorporate in as we build out our infrastructure on being able to drive external traffic in. If you look at what the key sellers or the major players are doing in the space like they've got Amazon advertising nailed. They're starting to use off-traffic sources through ads like DSP and Sponsored Display. And now another key thing is using tools like Amazon Attribution to drive traffic from those external channels.
Coming to their listings to help increase sales more which helps with organic ranking. So that's another key thing that we're focusing on. And honestly, right now, we would probably like to increase support for Google over going to Walmart, just to increase that external traffic support that we have. But if Walmart opens up their APIs, we're totally into it.
James Dihardjo
Interesting, interesting. Loving the insight, Joe. And look, I'll, I know you've got plenty more important things to get on with today with new starters and all that. So, thanks for making time and yeah, look, looking forward to doing this again and catching you in, in September in New York.
Joe Shelerud
Yeah, James, it was awesome. Really looking forward to seeing you again in September.