News & Insights
Make the Most of Amazon Sponsored Ads
Most Amazon sellers know that the platform’s search algorithm is crucial to their brand’s success. But few realize there is more to the formula than relying on Amazon SEO to reach the right customers quickly. Staying on a shopper’s radar throughout the decision-making process is often just as important. In fact, Amazon’s research has shown that only four percent of shoppers buy a product after their first search. Instead, it can take them an average of six to seven days to make a purchase.
One of the most effective ways to avoid losing prospective customers during this purchase journey of comparisons, evaluations and distractions is to utilize Amazon Sponsored ads. When used correctly, this specialized Amazon tool can reach the relevant shoppers at the most critical points of their search and substantially boost conversions for an Amazon seller’s product listing.
Types of Amazon Sponsored Ads
The origins of this Amazon advertising began in late 2019 when the site launched Sponsored Display ads, a self-service advertising solution available via both Vendor and Seller Central. A Sponsored Display Ad was unique from other Amazon product display ads in that it could reach targeted audiences on and off the platform. In 2020, Amazon expanded the offering to include the enhanced targeting of Sponsored Display Audiences. The Amazon ad options have continued to evolve in recent years, and the services available to companies enrolled in Amazon Brand Registry are now simply known as Sponsored Display.
Similar to Google Adwords, Amazon Sponsored Product ads are targeted using keywords and Amazon Standard Identification Numbers (ASIN) to reach Amazon shoppers. They allow advertisers to promote specific products with Amazon search terms and product detail pages. They are the most popular form of advertising on Amazon.
These ads are intended to support brand building by featuring multiple products from a single company. Appearing above search results, Sponsored Brand ads display a custom headline, logo and up to three products. Clicking on this type of ad typically sends shoppers to an Amazon Storefront or custom Amazon landing page. Amazon Sponsored Brands are also available as video ads to promote a product detail page.
Advantages of Sponsored Ads
The attraction of Amazon Sponsored Display advertising is primarily due to the visibility it offers brands and the targeting that can be done when creating a campaign.
While Sponsored Brands and Sponsored Products are limited to appearing on the Amazon marketplace, Sponsored Display ads may appear on and off Amazon. Ultimately, where these ads show up will depend on the parameters of the ad campaign.
On the Amazon site, ads can display on product detail pages, next to customer reviews, under a featured offer or within search result pages. Outside of the marketplace, Sponsored Display ads may also reach audiences on mobile apps and third-party websites that have a relationship with Amazon.
Another bonus of Sponsored Ads is that they include the visual elements that Amazon shoppers are accustomed to and trust. Since they are based on product listings, they feature images, star ratings, Prime badging, and prices directly from Amazon. In addition, they typically feature a shop now button that leads directly to the product detail page.
One of the key benefits of Amazon Sponsored Advertising lies in the targeting options. Advertisers can create a targeting strategy based on a similar product or relevant product category or focus on specific audiences.
By targeting competing or complementary products for Sponsored Ad delivery, brands can capitalize on the opportunity to reach shoppers who are likely to be interested in the product but may not realize it exists. Promoting product awareness and accelerating product discovery in this way can be a powerful way to connect with shoppers efficiently.
Sponsored Ad product targeting can be done in one of two ways. Advertisers can select specific products listed on Amazon and target the shoppers browsing those items. Companies can also opt to target product categories for a broader approach to reach a larger swath of prospective customers.
Sponsored Ad campaigns are designed to reach shoppers based on their behaviors and preferences. Brands can use audience targeting to engage or reengage prospective customers. These tactics target shoppers who have previously viewed relevant products and categories or attempt to introduce an item to new customers who are likely to be interested. In some cases, Amazon allows brands to create custom-built audiences or use pre-built audiences, depending on the goal of the Sponsored Ad campaign.
An Amazon agency can help
Amazon ads offer brands a powerful tool to enhance advertising campaigns, expand the marketing funnel and drive greater revenue and profits. For Amazon sellers and vendors, Sponsored Display, Amazon Sponsored Brands ads, and Amazon Sponsored Product ads can supplement listing optimization to promote products efficiently. However, success requires a solid foundational strategy and a commitment to ongoing improvement. Sometimes, it’s more than an Amazon seller can handle on their own. In this case, an experienced Sponsored Ad management service is an option worth exploring. They can help navigate the complexities of creating an efficient and effective Amazon Sponsored Ad campaign.
One of the ways an ads manager can simplify the marketing effort is by advising an Amazon seller on the appropriate ad spend necessary to achieve its goals. Campaigns that exceed their budget quickly will be challenging to evaluate and adjust effectively. An adequate budget allows sellers to compare the effectiveness of Sponsored Display, Sponsored Brands and Sponsored Product ads simultaneously while using similar targeting strategies and budgets across these types of sponsored ads to gain valuable insight.
Another benefit of an experienced partner comes from its familiarity with analyzing the wealth of data that comes from an Amazon Sponsored Ad campaign. It’s crucial that this data is used to guide future advertising decisions and set campaign goals. Experimentation with different targeting tactics and a review of all of the metrics can identify what’s working and what isn’t. These firms also understand not to react too quickly and the importance of giving ads multiple days or weeks of impressions before making adjustments.
Finally, a third-party agency can be helpful when setting a clear goal for any Sponsored Advertising. It’s common for brands to consider this type of advertising for established products, but new products can also benefit from a well-designed campaign. The targeting capabilities can allow companies to reach the buyers and shoppers of complementary products or introduce the item to audiences likely to be high-interest customers.
A campaign that uses product targeting to increase traffic and audience targeting to remarket to those visitors can be an extremely effective approach to launching a new product and ramping up sales quickly. Of course, Amazon Sponsored Advertising can benefit both large and small businesses due to its flexibility. Done well, it can increase brand awareness, accelerate conversion, increase Amazon optimization and even lead to product improvements.
A partner can set realistic expectations
The advertising cost to run a Sponsored Ad campaign will vary greatly depending on the number of products being advertised, the target audiences and the budget options that are chosen. For example, Amazon advertisers can opt for a pay-per-click (PPC) model, where advertising costs are only incurred when someone clicks on an ad, not when they see it. Or they can choose to pay by cost-per-thousand viewable impressions (vCPM), calculated by how often an ad is displayed to a shopper.
For both PPC ads and those purchased by impressions, sellers must set a daily budget cap for the Sponsored Display ads and choose a maximum bid that can be used to purchase available ad slots. Typically a new campaign will start with a $1 bid for Amazon PPC and a $5 bid for vCPM, with plans to monitor and adjust as the effort progresses. Both CPC and vCPM bids can also be optimized for impressions, page views and conversions depending on a company’s goals and preferences.
Working with a reputable agency makes it much easier to gauge the budget required to meet your brand’s goals. Thanks to a management service’s previous experience with Sponsored Ads management, they can also provide a more realistic timeline for seeing the full impact of any campaign and what those results may look like.
Agency alignment matters
Unfortunately, experience alone is not enough to guarantee that a service provider will be a good fit for your company. It’s also critical that any Amazon partner aligns with your brand’s goals, team and budget.
The Amazon marketplace is an $800 billion business. The services needed by the largest companies on the platform vary drastically compared to smaller brands. Therefore, finding an Amazon Sponsored ad manager that aligns with your brand’s business model and sales level is vital. Your brand should also seek a provider that regularly works with similarly-sized sellers to limit the risk of low-quality service, overly-high costs, or the possibility of not being a priority for the provider.
In addition, Amazon consulting services are typically split between firms that help brands following a 1P Vendor Central model (selling products to Amazon) and those pursuing growth on the 3P Seller Central marketplace (selling products on the Amazon marketplace). Therefore, picking a provider that already focuses on your brand’s business model is best.
The number one reason brands leave Amazon seller consulting services is a misalignment of the quality of the team they are working with. Often, established companies have learned from their mistakes with previous clients and can likely provide higher quality and more consistent service. While smaller, less experienced providers may be understaffed and rely heavily on contractors, which can lead to low-quality work.
It is easy for a brand to underestimate how much work is involved with Amazon advertising management and focus on price rather than quality. However, low-cost Amazon consulting is more likely to rely on offshore teams with less quality control, while the most costly Amazon consulting experts will often provide your brand with director-level staff capable of accelerating growth. People with valuable Amazon marketing experience are expensive to hire, and it’s important to remember you get what you pay for. A common rule of thumb is that it requires one employee for each $1 to $2 million of Amazon revenue.
Amify can help with more than advertising
From digital marketing to fulfillment to data analysis, the Amazon experts at Amify are ready to build a comprehensive strategy to grow your business. Our decades of experience and commitment to clients ensure you are getting all you can out of your Amazon Seller Central account. Schedule your consultation with our team today.