As a seller on Amazon, you know how challenging it can be to stand out in the crowded market. This is where Sponsored Products Advertising and Amazon PPC (Pay-Per-Click Advertising) come into play. Amazon Advertising allows Amazon sellers and vendors to present their products to a targeted audience on Amazon. When advertising campaigns are used effectively, they can boost your sales, increase your visibility, and help you establish your brand on the marketplace over time. In this article, we’ll explore how you, as a seller, can benefit from Sponsored Products Ads on Amazon, and how you can use this tool effectively to maximize your success.
Amazon PPC Advertising – What Advertising Formats Are Available?
Sponsored Products Advertising is a type of paid advertising on Amazon where sellers pay for specific products to increase their visibility on the platform. There are different advertising formats or campaign types available to you from Amazon:
- Sponsored Products
- Sponsored Brands
- Sponsored Display
Typically, ads are charged on a “Pay-per-Click” (PPC) / “Cost-per-Click” basis (CPC), which means that the seller only pays when a user actually clicks on the ad, hence the name. A predefined maximum click price is due, which varies depending on the chosen campaign type (Sponsored Product, Sponsored Brand & Sponsored Display) and depending on the keyword and ad placement.
What Are Sponsored Products Ads?
You can easily identify Sponsored Products ads by the grey marker word “sponsored”, which is displayed along with the product image and title, price, and reviews or shipping information. Classic Amazon Sponsored Products Ads are displayed in relevant areas on Amazon and can help get your products seen by potential customers who are deeper in the decision-making phase of the purchasing process, known as the “lower funnel”, which significantly increases purchase readiness:
1. Placement at the beginning, middle or end of the search results
2. Placement on product pages in the ad carousel
How Can I Benefit from Sponsored Products Advertising on Amazon as a Seller?
One of the advantages of Amazon Sponsored Products is the ability to target your ads to specific customers. You can choose which products you want to advertise and set a realistic budget that suits you. You can also align your ads based on your customers’ search terms or interests (such as viewed products and categories they have shopped in). This ensures that the ads are shown to the relevant people at the right time.
Another advantage of Amazon PPC is the ability to track and measure the performance of your advertising campaigns. Amazon provides detailed reports on the performance of your ads, including the number of impressions, clicks, and generated sales. This way, you can see which products and targeting strategies are working best and make adjustments if needed.
Can Amazon Sponsored Products Ads Improve Organic Rankings?
Definitely. Sponsored Products can help products gain more visibility, attention, and traffic, which can in turn lead to these products ranking better in organic search results and generating more sales. A high sales volume is a critical factor in determining placement in organic search results, so a sales boost through Sponsored Products can actually help improve organic ranking. Many people also overlook the fact that the mere repeated visual contact of your ad can lead potential customers to subconsciously perceive your products/brand and ultimately decide on your product over a competitor’s.
How Much Do Amazon Sponsored Products Campaigns Cost?
Creating a campaign as a seller or vendor is free. You only pay when your ad is clicked. The cost per click for your Sponsored Product Ads depends on several factors, such as search volume and competition for specific keywords, which is determined in the so-called CPC auction. Therefore, costs can vary from campaign to campaign. However, you can set a daily or total budget to control costs or expenses.
How Do I Start with Sponsored Products?
Simply put, to start with PPC campaigns, you need an Amazon Ads account, and you’re ready to go. Every seller can run Sponsored Product ads through the Amazon Advertising Console.
When creating campaigns, you’ll have to choose between manual targeting or automatic targeting. If you opt for manual targeting, you have full control over which keyword or product lists are used for the ads, and you can adjust these or specifically target certain search terms or audiences at any time.
On the other hand, automatic targeting is a very simple and time-saving way to start a campaign. Amazon creates the entire campaign and the algorithm selects keywords and products based on your product descriptions for which your ad will be displayed. It requires less work from you, but you have less control over which ads are shown.
Of course, setting up your first Amazon Sponsored Products campaign involves more steps than just described – however, a guide would go beyond the scope of this post. You can watch a detailed step-by-step guide for creating a Sponsored Products campaign here!
What is Keyword Targeting in Amazon Sponsored Products?
Keyword targeting in Amazon Sponsored Products refers to selecting keywords that are relevant to your ad. When a potential customer searches for one of these keywords, the corresponding ad is displayed. To control the accuracy of your ad’s placement, there are Match Types. Match Types refer to how closely your keywords must match the search query for your ad to be displayed. Amazon offers three “match types”:
- Broad Match: Your ad will also be placed for similar word groups and relevant variations.
- Phrase Match: Your ad will be placed for all searches that contain the identical word group. The order and sequence are decisive.
- Exact Match: Your ad is only placed when the search query exactly matches the booked keyword or keyword combination.
Through keyword targeting and the selection of Match Types, you can display ads more specifically to Amazon customers who are most likely interested in your products, or belong to your target audience. This can contribute to an increase in your conversion rate and more effective use of your advertising costs.
In addition to keyword targeting, there is also product targeting (targeting by ASINs and categories), but more on that at another time.
Caution: Once your campaign is running, it’s important to regularly monitor and optimize it. This includes analyzing your performance data, testing different targeting options and ad texts, and adjusting your budget as needed.
Here are a few valuable Sponsored Products Advertising tips for you:
Follow these tips and watch your sales improve!
1. Budget and Campaign Planning:
Take your time to think about a logical campaign structure for your entire portfolio (e.g., by category or product type) and align it with your marketing goals. Take the time to carefully plan your ads and budget for your campaigns to ensure you get the most out of your money. We recommend starting with a smaller budget and then gradually increasing it when you see that your ads are performing well. Also keep in mind that you may have to spend more money to achieve good placements in highly competitive categories or for popular keywords.
2. Research and carefully select relevant keywords:
Thorough keyword research is the key to a successful campaign. Make use of keyword research tools and create a list of the most important search terms for your advertising campaigns. Regularly check and update this list. Don’t forget to analyze the competition and add their keywords to your list as well. What keywords are your competitors using?
3. Use attractive and relevant product images, optimize your product detail pages:
Good images attract more attention and are likely to be clicked on more often. Images play a massive role in the customer’s selection process. Spark interest among your target group with high-quality and relevant images that match your product and clearly demonstrate its benefits! This enhances the credibility and attractiveness of your brand and increases the likelihood of your products being purchased. PS: The Amazon algorithm also favors optimized images and product detail pages! Watch your visibility organically increase when product images, titles, and descriptions are optimized.
4. Test various ad texts and targeting options:
There are several ways to test this on Amazon:
- A/B Testing: Here, two or more different ads are created that differ in one particular aspect (e.g., ad text or targeting). These ads are then randomly displayed to different users, and the success of the ads is measured.
- Multivariate Testing: Here, several different ads are created that differ in multiple aspects (e.g., ad text, image, targeting). These ads are then randomly displayed to different users, and the success of the ads is subsequently measured.
- Manual Testing: The ads are manually started and stopped, and the success of the ads is then measured. This method is less precise than A/B or Multivariate Testing but can still be helpful in understanding how certain changes affect the success of the ads.
To conduct the testing, you should define clear goals based on which the success of the ads can be measured (e.g., clicks, conversions, sales). Keep an eye on your ACoS value, for example.
ACoS (Advertising Cost of Sales) is an important metric when testing ad texts and targeting options – the performance indicator is calculated by dividing the total cost of the ads by the sales. A lower ACoS value (in percent) means that your ads are effective and you spend little money per item sold, while a high ACoS value means that the ads are less effective and you spend more money per item sold. Which ads have worked best, and what adjustments can you make accordingly?
Other essential Amazon Advertising KPIs overview
- Impressions: Number of ad views, i.e., how often the ad was seen, regardless of whether it was clicked on or not; captured by the server’s counting system
- Click-Through-Rate (CTR): Percentage of users who clicked on an ad relative to impressions. Provides information about the effectiveness of your ad; Calculation: Number of clicks / number of ad placements) x 100
- Cost per Click (CPC): Cost per click of the ad; Amount of advertising expenses; Determined by an automatic bidding system / auction
- Return on Ad Spend (ROAS): Advertising revenue generated in relation to advertising expenses. The ROAS shows how profitable and efficient your ad is compared to competitors.
- Advertising Cost of Sale (ACoS): Percentage of sales, advertising revenue in relation to advertising expenses. Calculation: Cost of advertising campaign / revenue from advertising campaign x 100
5. Monitor and optimize your campaigns regularly:
Maximize the effectiveness of your ads! The ability to track and analyze the performance of campaigns also gives you the opportunity to adjust your strategies, optimize, and achieve better results.
6. Use Negative Targeting:
Use negative keywords/targets to exclude irrelevant search queries. This can also reduce unnecessary costs. Here are 3 simple steps to ensure that your product is only displayed for relevant search queries:
- Identify the search terms for which your product is not relevant. These terms could come from the product name, product description, or related products.
- Add the irrelevant keywords as negative keywords in the Sponsored Products campaigns. This can be done via the Sponsored Products Campaign Manager Dashboard or via the Amazon Advertising API.
- Regularly check whether the negative keywords are still relevant and update them if necessary.
Using Amazon PPC campaigns can be an effective means to increase your sales and enhance the visibility of your products on Amazon. Regularly optimize your campaigns, target the right customers, and take your business to the next level with Sponsored Products Advertising! If you need help, we are happy to assist. We offer strategic advertising campaign management for your long-term success on Amazon. Contact us and get to know us in a free initial consultation!