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Learn The Basics of Amazon Sponsored Advertising (S1:E2)

Posted by Jimi Patel | June 11, 2019

Amazon Sponsored Ads Series: Episode 2

Amazon Sponsored Ads were, are and will continue to be THE most powerful tool for improving discoverability, viewability, and sales of the product on Amazon. Also known as the “Adwords of Amazon,” with Sponsored Ads, your product will directly show up with the organic results, thus providing an instant visibility boost.

Whether you are already running Sponsored Ad campaigns or are going to kick start the campaigns very soon, this article will educate about the types of sponsored ads, when to use them, the eligibility criteria as well as how Amazon determines which ad to display. But before diving deep into Sponsored Ads, it is essential that you understand how a shopper purchases a product – meaning a customer’s decision making the journey.

A Customer’s Decision Journey:

It’s definitely not linear. There are so many factors involved and it’s interconnected across stages. Let us understand each of them:

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  • Consideration: A customer wants to buy a supplement for the first time. When he searches on Amazon, he notices a product which has been advertising more than other products. Because advertising has been constantly coming in front of him, he decides to buy that product.
  • Awareness: A customer is a longtime buyer of a certain brand of supplements. He searches for that brand on Amazon with intent to refill his supplies. While searching for the product, he notices an ad at the top of the search result page. Clicking on the ad allows him to see the different flavors that brand offers. He was not aware of these flavors before.
  • Advocacy: A customer is looking to purchase a new speaker that recently broke. He decides to go for the same brand that he had bought last time, but he sees an ad of a speaker they are not familiar with. Clicking on the ad leads him to a product which has got better reviews than the product he had purchased previously. He decides to try out this the product.
  • Loyalty: A customer is a long time buyer of a moisturizer and he decides to buy from that brand again. He visits Amazon, searches for that product and finds the product page and buys that moisturizer.

Sponsored Ads can be used to target customers with high purchase intent. That means customers who are at the consideration and purchase stage of the shopping journey.

How Can Sponsored Ads Make A Product More Appealing To Customers?

Amazon Sponsored Ads are an effective way to drive considerations and improve conversions as it reaches the audience who are actively searching for a specific product. By leveraging sponsored ads, advertisers can accelerate product discoverability and increase the product viewability to all the high intent customers, which can help drive sales. Your products will come right in front of potential customers who are all set to make a purchase.

Who Can Use Sponsored Ads?

Amazon Sponsored Ads are available to all the sellers selling on Amazon Seller Central and Vendor Central. Basically Sponsored Ads can be used by the following:

  • Brands: Brands or those who represent brands, meaning the sellers selling through Vendor Central and who sell products from eligible categories can use Sponsored Ads.
  • Sellers: Sellers or those who represent sellers, who are professional, active sellers with a professional selling account (not an individual seller), can use Sponsored Ads.
  • Agencies: Agencies who represent an eligible brand or seller can use Sponsored Ads to accelerate discoverability.
The Eligibility Criteria:
  • An active, professional seller account
  • Enrollment in the Amazon Brand Registry (for Sponsored Brand Ads)
  • Ability to ship to all US addresses
  • Product must be new
  • Product listings in one or more than one category
  • Buy Box is necessary for Sponsored Product Ads. If you create a Sponsored Product Ad for a product that is not winning the Buy Box, then your ad will not be displayed to the buyers. Products that are eligible will be flagged in the Campaign Manager under Advertising Tab in Seller Central. Sponsored Brands will be shown to shoppers, regardless of who is winning the Buy Box.

Types of Sponsored Ads on Amazon:

This advertising program allows sellers to promote the products listed on Amazon. They are keyword driven ads and are also called Pay-Per-Click ads. As the name suggests, advertisers pay for a fee only when a shopper clicks on the ad. When a shopper is searching for any keyword that you have added in your campaign, then your ad is eligible for display on the search result page and sometimes on the product detail page (only Sponsored Product Ads). The types of Sponsored Ads available on Amazon are as follows:

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#1 Sponsored Product:

When a shopper searches for a product on their desktop or mobile, they may come across Sponsored Product. Sponsored Product Ads function similar to ads run through Google shopping network. These types of ads take the shoppers directly to the product detail page. The ad includes native-looking creative elements, most of the Amazon shoppers are familiar with, such as star rating, product price and reviews. Customer can differentiate organic results with paid results only by the sponsored tag displayed on the top.

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Amazon Sponsored Product Ads can:
  • Accelerate the growth of newly launched and low-exposure ASINs
  • Increase discoverability of the top Buy Box offers
  • Act as a primary revenue driver
Targeting options:

There are two ways to build and manage campaigns within Sponsored Product Ads:

  • Automatic Targeting: Amazon targets ads to the relevant customer searches based on the keywords present on the product detail page.
  • Manual targeting: Amazon allows sellers to identify the keywords and add them to their campaign.

If sellers are not using Automatic targeting, then they could miss out on discovering major search terms and keyword their buyers are using to buy their products. We believe that a successful Amazon product strategy should include both Automatic and Manual targeting.

#2 Sponsored Brands:

Previously known as Headline Search Ads, Sponsored Brands are a great way to increase the efficiency of your PPC campaigns. While Sponsored Product ads are typically used to drive conversions, Amazon recommends using Sponsored Brand ads for driving brand awareness. This can be very powerful and effective as 75% of shoppers use Amazon to discover new products or brand. The ad incorporates native-looking elements; shoppers are familiar with such as product title, images and reviews.

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In this 2.0 version of Headline Search ads, Amazon has given advertisers various placement options and expanded bidding capabilities.

Placement Options:
  • Top of the search result page
  • Other placement (left-hand rail and bottom of the search result page)

There is a world of difference between the performances of these two placements.

Bidding Options:
  • Automated Bidding: Amazon will automatically increase or decrease the bids for your other placement based on the expected conversion rates. Automated bidding cannot increase bids for your placement.
  • Custom Bid Adjustment: Advertisers can manually manage and scale their other placement bids as well as increase or decrease bids by applying a percentage modifier.

If advertiser turns off automated bidding option and does not setup custom bidding, then the default bid will be applied across all placements.

Difference between Sponsored Products & Sponsored Brands:

Sponsored Products

Sponsored Brands

Promotes individual products Promotes a collection of products. Minimum three required
Buy Box required Brand Registry required
Clicking on the ad will lead shoppers to the product detail page Clicking on the product features will lead to the product’s detail page and clicking on headline or logo will direct customers to Brand Store or page featuring a collection of products
Ad appears within product detail pages and the search result pages along with the organic results Ad appears at the top, within and at the bottom of the search result page
Can be used to increase the visibility of a product Can be used to create brand awareness


Thousands Of Sellers Bid On A Keyword, How Does Amazon Knows Which Ad To Display?

An auction determines which ad is relevant. Whenever a customer searches for an item using Amazon search bar, Amazon runs an auction to determine which sponsored ad will be displayed. The auction decides which ad has the highest CPC bid. CPC bid is the maximum amount an advertiser is willing to pay when a customer clicks on the ad. The winner of the auction will pay a slightly higher amount than the second highest CPC bidder. If your CPC bid is $2.00, you have agreed to pay Amazon up to $2.00, if your ad is clicked. You won’t pay for impressions.

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Relevancy & Auction:

Apart from bids, there is one more factor Amazon takes into consideration, i.e., the relevancy of keywords. For example, when a customer searches for “Wireless Headphones,” Amazon determines all the ads with the highest relevancy. For relevancy, Amazon uses an algorithm that takes into account multiple factors. The algorithm is made to ensure that customers get the best shopping experience. These being keyword-driven ads, the relevancy of your keyword can make or break your campaign game.

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Let us take an example to see how relevancy of a keyword affects the auction process:

  • Weak Relevancy: If you have added “lipstick” for your wireless headphone ad, then your ad is less likely to be displayed, regardless of your CPC bid. This is because there is little or no relevance between the keyword and the historical search data.

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  • Strong Relevancy: If you select “audio” for your wireless headphone ad, your ad has higher chances of being displayed because of the higher degree of relevancy. The greater the relevancy, higher are your chances of your ad being displayed.

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Sponsored Ad Campaign Objectives:

Choosing the right ad type for your campaign can help you reach your goals faster. Sponsored Product & Sponsored Ads both have different objectives.

  • Accelerate sales: If a seller wants to increase sales, he can use Sponsored Product Ads to increase sales of their new, low performing or best-selling products and Sponsored Brand Ads to drive traffic to their entire product suite.
  • Launch new products: If a seller is launching a new line of product he can use Sponsored Product Ads to ensure that they are appearing in the search result and product detail pages to increase discoverability and he can use Sponsored Brand Ads to feature the newly launched product together with the already-performing products to create brand awareness across the range of new products.
  • Reach engaged customers: A seller can maximize their reach by placing a logo and message on Sponsored Brand ad and create brand loyalty. He can use Sponsored Product ads to improve viewability and engage existing customers.

Amazon Sponsored Ad Tips That Are Simply Borderline Magic (suggested by experts at eStore Factory)

  • Before creating ads optimize your product detail page and make it ready for the traffic. To know more read our blog post: https://www.estorefactory.com/blog/is-your-product-retail-ready-how-to-prepare-for-it-drive-sales-2019/
  • Ensure that your targeted keywords are present in the product listing copy
  • Start with automatic campaigns and once you get the search terms people use to retrieve your ad, create a manual campaign
  • Don’t underestimate the power of match types
  • Organize your campaigns. Either by category, brand or by best-selling ASINs
  • Make the best use of negative keywords to reduce ACOS and unnecessary spend. If you are selling shoes then heels can be your negative keyword
  • Scale bid after evaluating the performance for at least a week
  • Always include the long tail keywords, because they have more chances of winning a sale
  • Bid on the best-performing keywords of a competitor. This can be done manually or by tools like Helium10 and Keyword Inspector
  • In Sponsored Ads, feature the three top performing products to increase the Clickability
  • Add your product’s benefit in the headline (character limit: 50)

New Update: Sponsored Ads Now Available for Amazon Australia

In the first week of June 2019, Amazon launched PPC for Australian sellers as well. So, if you are an Australian seller who is looking forward to starting campaigns soon, then this guide will surely help you out.

That’s all folks. Sponsored Product & Sponsored Brand are the most basic yet efficient forms of Amazon Advertising and when used correctly, they have a huge potential to boost visibility, traffic, and overall sales. Like every advertising method, it is essential to do your own research to see what solution works best for your business.

Let The Experts Handle Your Advertising Campaigns

We are experienced and passionate Pay-Per-Click experts with a track record of increasing visibility, traffic and sales for thousands of products on Amazon. Our expert, Jimi Patel has also been certified by Amazon Advertising Sponsored Ad Accreditation – United States with a score of 97%. Our tested and proven tactics have accelerated PPC sales of more than 200 sellers. Just Contact Us and get your ad running for your Amazon store.

Amazon Ads Certificate - Jimi