Navigating Amazon’s Sponsored Ads

News & Insights

Navigating Amazon’s Sponsored Ads

In an era where every brand is competing for the attention of consumers worldwide, sponsored ads significantly aid brands in their mission to get discovered. While Sponsored Ads/Products allow sellers to increase their discoverability and sales on Amazon, there are a few basics that retailers should be aware of before investing in advertisements that yield a rewarding ROI.  

Questions to ask before you start advertising:

  1. What are my company goals and objectives? If increasing sales is your company’s goal, focus on converting ad clicks into orders. This occurs when a customer clicks on your sponsored ad, adds the product to their shopping cart, and actually purchases the item. Your brand can measure this by dividing your total ad spend by total sales from advertising, which is your ACoS (Advertising Cost of Sale). If brand awareness is your enterprise’s priority, focus on impressions, which is the number of times your ad is viewed. Once your brand awareness has developed to a certain degree, customer will then subconsciously think of your brand as the go-to seller for that particular product. This brand recognition will ultimately create a strong brand loyalty where your current customers are likely to refer your business to others.
  2. Which products should my company be advertising? Just how brands forecast best sellers for the holidays using historical sales reports, brands should also reference these reports to determine which products need to be advertised. Additionally, ensure that the products you want to advertise are in stock and are priced competitively. This will allow your ads to appear in searches and get your brand to the finish line by winning the Buy Box. After enough time has elapsed and it is clear which items are winning the Buy Box, your brand will now know with certainty which products to sponsor. You can find information on Buy Box win rate under the ‘Reports’ tab in Seller Central. Click on ‘Business Reports,’ and under the section labeled ‘By ASIN,’ click on ‘Detail Page Sales and Traffic by Child Item.’ Here, you can sort by ‘Buy Box Percentage’ to find your best-performing ASINs. It’s best to look for a high Buy Box percentage paired with a high number of sessions or unique visits to the product detail page. These are your most frequently viewed ASINs
  3. Are my product detail pages ready? Your product detail pages are what potential customers see when they click on one of your products. Brands can assure that their products detail pages are ready by making sure each page includes accurate, descriptive titles, high-quality images, useful product information, hidden keywords, and at least 5 bullet points of copy.   Sponsored ads can bring customers to your products, but it is your responsibility to ensure that they have an enjoyable shopping experience with your brand. This can be achieved by having appealing product detail pages that helps customers along their shopping journey.

Getting started with sponsored products

After about 60 days of monitoring the preliminary stages of your brand’s advertising efforts, you are now ready to create your first campaign!  

Developing a daily budget

The first step to start your campaign is to set a daily budget that is high enough to keep your ads live. Amazon recommends a daily budget of at least $10 to warrant that your ad remains online the entire day. Customers looking for products like yours will have a much more difficult time locating your brand if you’re products are only sponsored for a few hours out of the day because your budget was insufficient.

Timeless approach

In conjunction to establishing a sufficient budget, brands should take an “always-on’ approach with their campaign by setting a no end date. This approach allows your products to be discovered at any time on Amazon and not just during the busy seasons. Your brand’s sponsored ads are for more than just the average holiday shopper, they are for the customers who find true bliss in obtaining the items you offer and don’t just want them once a year.  

Automatic targeting

The next step is to choose automatic targeting. Automatic targeting is designed to generate more impressions to drive sales and to reach your most likely customers. In this scenario, Amazon matches your ads to customer search terms, which are based on your product information and are updated on a regular basis with changing search trends.  

Review reports

In roughly two weeks, check your search term report in the ‘Reports’ tab to review which search terms are producing in ad clicks and sales. It’s vital that your brand analyzes the successes and failures of the progress you’ve made thus far in order to hone in on what is performing well and ditch what is not in concert with company objectives.

Manual targeting & keywords

Following this, create a Sponsored Products campaign with manual targeting. With manual targeting, users are able to select keywords and target their top-performing keywords. Manual targeting also allows brands to set keyword-level bids and bid more competitively on keywords that are meeting sales goals.  

 Next, incorporate a range of keywords in your campaign to boost visibility and sales conversions. Amazon says the more keywords you include, the more customers you are likely to reach. For example, say your company sells bikes and your potential customer is looking for a bike for her 4 year-old daughter who loves her belongings to be girly and glamified. Your manual targeting can now include words like ‘kids bike for girls,’ ‘training wheels,’ ‘streamers,’ ‘handlebar basket,’ and so on to appeal to this shopper and other shoppers with the same needs.   At this point, you should also become acquainted with keyword match types in order for your brand to continue reaching the right customers.  

  • Broad match: This offers the widest traffic exposure. Your ad may appear when a customer searches for your keyword in any order, including close variations.
  • Phrase match: Your ad may appear when a shopper searches for either your exact phrase or sequence of words in your keyword. While this is more restrictive than broad match, it can drive more relevant traffic to your ads.
  • Exact match: In order for your ad to show, a shopper’s search term must match your keyword exactly. This is the most restrictive match type, but can help generate the most relevant traffic.
  • Negative phrase and exact match: Applying a negative match type to keywords in your campaigns prevents your ads from showing when a customer searches for those terms. This helps you maximize relevant clicks and minimize those that aren’t.

Wrapping up

Within the first few weeks of your brand’s advertising adventures, Amazon recommends launching at least 5 Sponsored Products campaigns that includes both automatic and manual targeting. This combination will allow your brand to have the best of both worlds and discover new keywords that are generating sales. By doing this, brands will be able to see which products are indefinitely performing well and will have the insight to bid more strategically on key terms.   As your brand becomes more comfortable with the nature of Sponsored Products, Amazon advises that retailers begin incorporating a mix of ad types, such as Sponsored Brand Ads and Amazon Stores. Sponsored Products and Ads can greatly serve your business goals and objectives by increasing sales and by reaching consumers who are searching for products like yours. To start implementing sponsored ads into your Amazon strategy, get in touch with one of our experts today.

More Resources And Articles

Discover effective inventory management strategies to prevent excess stock, avoid Amazon's long-term storage fees, & optimize profitability.

Inventory Strategies to Avoid Amazon’s Long-Term Storage Fees

Explore the nuances of Amazon and Google SEO and to boost visibility and success on the most dominant ecommerce platforms.

Amazon and Google Algorithms Require a Tailored Approach to SEO

Discover how optimizing your supply chain can boost your profit margins on Amazon, thanks to strategic planning, efficient management, and leaner operations.

A Leaner Supply Chain Can Lead to Bigger Profits on Amazon

Explore how setting Specific, Measurable, Achievable, Relevant and Time-bound goals can pave the way to success for Amazon sellers.

Setting Amazon SMART Goals for the New Year

Uncover the most effective strategies to manage seasonal fluctuations in demand, reduce supply chain stress, and grow your Amazon business.

Ease the Supply Chain Stress of Seasonal Demand

Explore the risks that excess inventory poses to Amazon sellers and the strategic solutions that can overcome them.

Don’t Let Excess Inventory Hinder Amazon Success

Discover how supply chain compliance can help you overcome Amazon's regulatory challenges and ensure seamless operations.

Supply Chain Compliance is Vital to Navigating Amazon’s Regulatory Hurdles

Explore how Amazon is leveraging Artificial Intelligence to combat fraudulent reviews and enhance trust and reliability on its platform.

AI is Amazon’s Newest Weapon Against Fraudulent Reviews

Contact Us

Learn more about how we can help your Amazon business succeed!