Comprehensive Guide About Amazon Sponsored Products Ads

Amazon seller sponsored product ads.
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Whether you have just started selling on Amazon and want to launch your first product or are an experienced seller introducing new products to the marketplace, Sponsored Products ads are the most effective way to present a new product to potential customers.
Amazon is a web of recurring visits by millions of users worldwide searching for products they want to buy. When an Amazon user searches, they think about an immediate or future purchase. But, in any case, they think about buying. And that makes reaching that potential customer at that exact moment an essential goal for any brand or product sales business.
When you think about your online advertising strategy, you want to meet your consumers where they are. And if you're an e-commerce company, that place is likely Amazon.
That's where Amazon advertising comes in. Amazon has several advertising programs to choose from, but the best one to start with is Amazon Sponsored Products. Follow this article to learn more about this excellent advertising method on Amazon.

What Are Amazon Sponsored Products?

Sponsored Products on Amazon are pay-per-click (PPC) ads that appear in strategic locations on Amazon, giving your products more visibility and purchase opportunities. You select the products you want to push, set your bid and daily budget, and launch an ad to entice shoppers to click.

Sponsored Product Ads are just image ads, similar to display ads in Google Ads, but the good thing is that they appear in Amazon search results right next to the organic search results. 

The only visible difference between the sponsored and unsponsored results is the gray “Sponsored” label that appears above the product title. You’ll also see that Sponsored Products may appear above the rest of the results.

Specifically, Sponsored Products are designed to generate qualified traffic to a product detail page within the Amazon web portal. This ad format can be displayed in multiple locations on the said portal:

  • Top of search (first page): At the top row on the first page of search results
  • Rest of search: In the middle or at the bottom of search results, on the second page of search results, and beyond
  • Product pages: On the product details page and other non-search placements such as the add-to-cart page
Amazon sponsored products sample on Amazon market place.

The system behind the sponsored product ads is very similar in form to that of Google AdWords. As with Google’s CPC model, the costs are billed per click. Ad positions are determined based on max CPC combined with sales and tracking history.

Everything You Need to Know About Amazon PPC

How Does Amazon Sponsored Products Work?

There are two types of Sponsored Products campaigns: manual and automatic. For a manual Amazon Sponsored Products campaign, retailers select the products to be advertised from their available inventory and store them with the desired keywords or product pages for which the ads are to be displayed. In addition, the advertiser sets a maximum bid that he is willing to pay for a click on his ad. However, by choosing an automatic campaign, Amazon will automatically select relevant keywords and products to display the ad.

Suppose a potential customer now searches on Amazon using the stored keywords. In that case, there is the possibility of appearing with the Sponsored Products on the search results pages and the product detail page of related products. The placement of the Sponsored Products depends on the maximum bid and the relevance.

If the Sponsored Products are displayed, the advertiser doesn’t have to pay anything. Only when the potential buyer clicks on the ad and gets forwarded to the product detail page will the advertiser be billed. This whole process is very similar to Google Ads ad serving.

The structure for managing the Sponsored Products in the Amazon merchant account through campaigns, ad groups, keywords, and ads is also modeled on this. However, you do not have to create ads because the assigned products are used as ads. At each level, essential statistics and key figures such as impressions, clicks, costs, and sales for the individual Sponsored Products can be viewed and downloaded as a report. This report offers the possibility to optimize and improve advertising measures continuously.

Both retailers and sellers with an Amazon seller account can place Sponsored Product ads on Amazon. However, it is essential to note that Sponsored Product ads are not available for all product categories. As of 2022, adult products, used products, refurbished products, and products in closed categories cannot be advertised using Sponsored Products ads. Sellers can call up a list of the available product categories after logging in to Amazon. 

In addition, the products for which sponsored product ads are to be implemented must win the so-called “Amazon Buy Box” to enable a circuit. The chances of winning the buy box are enormously influenced by a combination of sales price, availability, delivery times, and customer service.

Are Amazon Sponsored Products Worth It?

The progression of Amazon’s advertising platform is desirable. In 2015 alone, Sponsored Products on Amazon saw a 100 % increase in advertiser adoption. In 2016, this dominator of the B2C sector entered 1,400 million dollars in advertising.

Likewise, in 2016, according to figures from Business Insider, Amazon had already surpassed Google as the preferred platform for 55% of consumers to start their product search process. 

Advertisers should ask themselves, “Are Amazon Sponsored Products worth using as a marketing tool?”

According to what the professionals say, the answer is a resounding yes. However, during the COVID-19 pandemic and its aftermath, sellers reported an increase in Amazon ads prices and a decrease in conversion. But since many sellers still believe this is the best way to advertise their products, we invite you to analyze the advantages of this advertising format and judge it for yourself.

Sponsored Products on Amazon offer two clear advantages over advertising formats on other platforms such as Google Ads:

Prospects in the BOFU

On the one hand, Amazon has positioned itself in the BOFU (Bottom of the Funnel); that is, users who consult this eCommerce find themselves in a much more advanced purchase process than those who search on Google. Google users are looking for information and solutions to a particular problem, while those of Amazon are looking for the specific product that solves their needs. Customer acquisition costs are therefore much lower.

According to statistics, the average CPC for advertising on Amazon is 38% lower than on Google AdWords. A study comparing the exact keywords for the same products in Google Ads and Amazon concluded that the keywords searched for on Amazon received 2.5 times more clicks and a 70% higher conversion rate while having 65% lower CPC. 

ToFu, MoFu, BoFu in Amazon sponsored products.

How to Get Started with Amazon Sponsored Products?

Amazon Sponsored Products are a very efficient marketing technique that you can use to build a brand image and drive a customer to your product’s landing page. It’s important to understand that brands and sellers of all sizes can use this marketing method. Sponsored Products offer comprehensive control over your marketing spending with budget adjustment.

The Amazon Sponsored Product can help you market your flagship products or new launches by allocating a specific budget to this production. Of course, the sponsored product is a unique and efficient way of product marketing.

With this technique, you pay when you get clicks on your Amazon campaign, which allows sellers to drive additional traffic to their product’s landing page. When we talk about Sponsored Products, there are different types of sponsored product campaigns:

  • Automated sponsored product campaigns: Amazon has an automation feature for sponsored product marketing. In this model, Amazon takes care of everything related to selecting the keyword for your landing page. Automated targeting is an excellent feature for sellers who lack the technical know-how and time to run the Amazon Sponsored Products campaign.
  • Manual sponsored product campaigns: Manual campaigns give the seller complete control. They can customize the audience, the keywords and products they want to bid on, and everything else.

How to set up an Amazon Sponsored Product Ads campaign?

Now that we understand the benefits of Sponsored Products, you need to know how to create your first sponsored product campaign. It’s important to note that there are several stages to setting up your Sponsored Products campaign. Amazon made sure you could do this without professional help. Let’s take a look at these phases:

1) Campaign Settings

This is the first and most crucial step in creating a Sponsored Products campaign, where you define the details and settings for your campaign. Essential things you select on this page are:

  • Campaign name: This is the primary name you want to give your campaign. The campaign’s name is crucial because it helps you and your buyers recognize the campaign quickly, especially when running dozens of campaigns.
  • Portfolio: You can select the portfolio to which the sponsored product should belong.
  • Campaign date: There are two fields in this domain, the start date and the end date. By defining these dates, you can set the time frame in which your campaign will run.
  • Daily budget: The daily budget is one of the essential fields on the settings page. In the Daily Budget field, you can define the daily budget that you spend on your sponsored product campaign.
  • Targeting: You can select the target audience automatically or manually. In automatic mode, Amazon will target the keywords and products similar to your products and help drive customers to your landing page. The automatic function comes in handy when you don’t have the time and efficiency to determine it manually. The manual selection feature gives you complete freedom to select the keywords and products of your choice. This manual feature also allows you to target the audience you deem appropriate.

2) Campaign Bid

The bid is the next thing to decide when setting up your Amazon Sponsored Products campaign. In this field, you determine the bid you want to place for the keywords or products. If your bid stands out from your competition, these keywords or product pages will show your products as the number one result. Amazon offers three options to choose from. These options are:

You should have strategy for you Amazon campaign bid.
  • Dynamic bids – down only: With this option, Amazon lowers your bids when your ad has less chance of converting into sales. Bids are synced in real-time to ensure you are not left behind.
  • Dynamic bids – up and down: This option adjusts your bids by 100%. This feature increases your bids when it’s more likely that a potential buyer converts to a sale.
  • Fixed bids: This is a very stable method. These bids are fixed and can only change if you define your preferences. The probability of sale does not affect the bids you place.

3) Ad Groups and Products

An ad group is a collection of products targeting the exact keywords in a campaign. For easier management, Amazon prefers that you group your products by price range and category.

It’s recommended that you use one parent SKU per ad group. This way, you can control your bids for these products over the long term.

When using the manual feature of campaigns, Amazon offers three ways to target keywords when matching: phrase, broad, and exact. The broad match type ad group should have the lowest bid, followed by a phrase match and then the exact match, in that order.

After successfully creating your ad group, the next step is selecting the products from your portfolio. You can do this by merely scrolling down the page itself.

4) Bidding Function

The next important step in the Amazon Sponsored Products campaign is placing the bids. Amazon has a unique method of auctioning keywords. No matter your bid, you only have to pay a penny more than the second-highest bid.

Consider bidding $10 on a keyword. And your competitor places a $6 bid on the same product. You win the keyword auction because you set the highest bid. While you win the auction, you don’t have to pay $10. You have to pay $6.01, which is only one cent more than your competitor’s bid.

Amazon supports ad group bids. So, if you decide to bid $10 for the group, all keywords in that ad group will have a $10 bid. You can adjust your bids if you want to set broader bids for the keywords. Bids can be adjusted based on targets, keywords, and categories within an ad group.

5) Targeting

Amazon has two ways to target your customers. You can use the manual feature, which allows you to define your preferences and settings manually. You can also have Amazon work for you by choosing the automatic feature.

With manual targeting, you can target the followings:

  • Keywords
  • Products

If you choose keyword targeting, the following basis for matches is available from Amazon.

  • Broad: Contains all keywords in any order, including variations, plural words, and other related terminologies. For example, the broad match of “water bottle” can be “bottle for dog water.”
  • Phrase: Contains the whole phrase or a set of keywords strung together. For instance, the phrase match of “water bottle” can be “water bottle for dog.”
  • Exact: This match type allows you to select the exact keyword or string of keywords, which means when you set “water bottle” as an exact match, it will only get impression on “water bottle,” nothing less or more.

6) Negative Keywords

The negative keyword is a method of excluding your search queries from unrelated searches. These keywords help narrow search results when irrelevant searches can point to your landing page. Negative keywords are an essential feature that will help you avoid unnecessary costs. Remember that you pay based on the clicks on your ad.

The negative keyword targeting is a method of excluding your search queries from unrelated searches. 

Consider that you are a men’s shirt seller and do not have any black shirts in your portfolio. You can add the negative keyword “black shirt.” Those looking for a black shirt will not be directed to your products, which saves you advertising costs. It is always worth having a list of negative keywords and improving them over time.

Know more: Best Product Ideas for Amazon FBA!

How to Optimize Your Product Ads Campaign?

Given the growing competition, it is crucial to know and master the optimization techniques of advertising on Amazon, mainly Sponsored Product ads. Follow the tips below to optimize your Amazon Sponsored Products campaign and increase your ROI!

1) Structure Your Campaigns by Product Category

One of the most effective optimization practices is dividing campaigns according to the different categories of products your business has for sale. Additionally, each campaign should have ad groups for specific product segments.

The level of specificity of campaigns and ad groups is key to improving conversions, thanks to a higher level of relevance concerning the search carried out by the user. Keyword targeting should allow you to select multiple keywords for each ad group.

2) Combine Manual and Automatic Campaigns

As a general rule, manual campaigns give you greater control and the possibility of optimizing the campaign.

However, and especially when you are starting, opting for automatic targeting will allow you to discover those terms or keywords that Amazon considers appropriate for your products. When you realize a keyword or product is a winning one, you can move on to a manual campaign and make the most out of it.

3) Combine Different Keyword Match Types

For the same reason as in the previous case, it is necessary to use the different matching options with the search keywords to learn as much as possible from the search patterns of Amazon users.

Using broad match is ideal for the early stages, where you are still doing keyword research, or if you want to expand your listing database.

Phrase match opens the door to a massive set of long-tail keywords that can ultimately allow you to capture highly qualified potential buyers, creating campaigns with very restricted and specific groups of keywords.

Keyword targeting panel on Amazon sponsored products advertising.

The exact match, although more restrictive, is the one that allows you to filter potential buyers better.

Finally, negative keywords will prevent your Amazon Sponsored Products ads from appearing in search results that are irrelevant or unsatisfying.

4) Write Persuasively

Amazon is a platform where text is more important than visual resources. Users are used to reading product descriptions and testimonials from other buyers. It is part of the nature of this enormous eCommerce.

Therefore, the product page’s content should be strategically designed to persuade the user that they need to buy the product. If it is an offer, urgency should be an intrinsic element in the message. Try writing a persuasive description and title on the product page to attract more potential buyers.

5) Include Keywords in Product Listings

Keep in mind that Amazon wants to provide the best search experience for its users, which implies that the search results are as close to what these users want to find.

Therefore, your product listings should naturally include the keywords you are bidding on. Otherwise, Amazon may judge the content of the ad as not relevant and stop showing it in search results.

6) Bid for Competitor Products

You can display your product on your competitors’ product pages if you want more visibility. If your product page doesn’t have enough traffic, this is a relatively cheap way to display your product and benefit from the related traffic coming to similar product pages.

7) Combine Different Advertising Methods

Try different methods and strategies to see which one is working better. Use automatic and manual campaigns, different bidding strategies, different match types, different structures of campaigns, etc. Creating an initial campaign is one thing; learning and optimizing are different. You won’t know before you do it. So, just start testing different ideas.

8) Extract the Key Data to Increase Conversions

Finally, you must download and analyze all the reports on searches, keywords, and conversion rates that result from the execution of the campaigns. Such analysis should allow you to optimize bids and campaign targeting to improve metrics and get a higher return on investment.

Best Tools for Managing Amazon Sponsored Products

As with other online marketing disciplines, having specialized Amazon Sponsored Products tools and software for data extraction, data management, and creating personalized reports will allow you to take your results to the next level.

Here are the top tools Amazon sellers can use for managing their Sponsored Products campaigns:

1) SellerApp

This software connects your Amazon business’s marketing, sales, and operations in one platform and provides an important tool: PPC Analyzer.

This tool allows you to simplify and optimize your PPC campaigns on Amazon and also features machine learning tools that can maximize your profits. This tool ensures your business’s long-term success by giving you granular and seamless control over every aspect of your advertising campaigns. It combines Amazon ads automation, negative keyword optimization, one-click keyword harvesting, and advanced analytics all into one platform.

2) Teikametrics

This tool has an AI-powered platform called Flywheel that allows you to optimize and grow your Amazon business and build, optimize, and analyze your advertisement campaigns.

By starting your business goals at a product level, Flywheel will automatically create ad groups and campaigns that target the right audiences. This platform is perfect for product launches, sales growth, profitability, and targeting buyers using keywords that can attract new customers. Flywheel uses algorithmic keyword bidding and self-learning models to develop keyword bids aligned with your goals.

3) BidX

This one is a fantastic tool that can run things on autopilot. BidX web application continuously analyzes the performance of your ads and makes them more profitable through bid and keyword adjustments using machine learning algorithms.

It also has keyword research, campaign creation and optimization, and performance evaluation software. BidX’s experts can help you achieve the best results by evaluating your sponsored product ads’ performance.

4) Zon.Tools

Zon. Tools allows you to manage your campaigns and maximize profits by automating Sponsored Products’ best practices. Regardless of your Amazon Sponsored Products strategy, this tool will adapt itself to your specific goals and includes many algorithmic proprieties such as Auto-Mate 3.0, KeyWord Miner, TargetMiner, Bid Gambler, Term-Inator, ASIN-Ator, KeyWord Guardian, KeyWord Recycler, and Bid Nailer.

5) Sellics

Sellics is an advertising software for Amazon that helps you focus on growing your business by using and tailoring optimization strategies such as maximizing your revenue or optimizing ACoS to your specific advertising goals.

This tool provides you with two options: “Best-Practice,” which allows you to do things simple and fast in addition to saving time, and “Do It Yourself,” which gives you all the flexibility and control to customize everything you want.

6) Ad Badger

 Ad Badger consists of a powerful toolset that allows you to manage, automate, and monitor your campaigns 24/7. It includes an Amazon PPC Software Tool that ensures you always have the correct bid. This tool allows you to manage keywords, bids, and campaigns better with the right Amazon Sponsored Products strategy and without needing previous PPC knowledge.

7) Trendle

Trendle is a tool that Amazon sellers can use to launch and scale their business, grow sales and profits, and automate their PPC campaigns. By using Trendle, you will only need to create the parameters under which you want your campaign to perform and let Trendle handle everything else to keep your campaign profitable. This tool offers valuable features such as reverse ASIN, automatic emails, review alerts, and more.

8) PPC Entourage

Entourage has a whole set of valuable tools for Amazon sellers, including PPC Entourage, which allows you to easily optimize and expand your Amazon ads without the need for complex spreadsheets.

Using PPC Entourage, you can use automation to control bid price, remove keywords that are wasting your ad spend, optimize all your campaigns in minutes with the bulk optimizer, and monitor everything without doing things all by yourself.

How Much Do Amazon Sponsored Products Cost?

Sponsored Products can help you increase the visibility and sales of your products by displaying ads when shoppers search for products like yours. There are no monthly fees; You only pay when shoppers click your ad, which takes them to the product detail page where your offer appears.

Amazon pay per click cost varies a lot. It usually ranges between 0.02 and 3 dollars. The average pay-per-click cost, which refers to the amount a seller spends to get someone to click on their ad, is about $0.77. however, they can vary significantly based on product category, market, and ad type.

What Is the Difference Between Automatic & Manual Campaigns?

Advertising campaigns are increasingly essential to sell your products on Amazon stably and securely. Although, many times, it is difficult to know which is the best option in the Sponsored Products section: Automatic or manual campaigns. Therefore, here we provide thorough information on both types of campaigns so that you can decide which one is more suited to your specific goals and needs:

Automatic Campaigns

They are ideal for getting started in the Pay Per Click (PPC) system. In this case, Amazon is responsible for selecting the keywords and products that will lead customers to your product.

Once you have selected the inventory items you want to advertise, the platform lets you bid on the type of match, that is, what other products or search terms you want yours to be related to:

Automatic campaigns of Amazon sponsored product ads.
  • Close Match – Your products will be shown to buyers who use search terms closely related to your products. For example, if you sell gel nail polish, your products will come up if a buyer searches for terms like “gel nail polish sets,” etc.
  • Loose match – Your products will be displayed to buyers who search terms loosely related to your products. For example, if you sell manicure sets, your product will come up for search terms like “acrylic nails.”
  • Substitutes – It will target shoppers considering products that are substitutes for your items (often the same type of product sold by a different brand). For example, if you sell Adidas tennis shoes, your products may appear to a buyer searching for Nike shoes.
  • Complements – This type of match targets buyers browsing product pages for your products. For example, if you sell athletic socks, your products may appear on product pages for tennis shoes.

Depending on your Amazon Sponsored Productsstrategy, you will have to increase the bid for one type of match or another to better position your product on the platform. Also, it is possible to block the items that Amazon matches you with if you are not interested in that match.

Manual Campaigns

In this case, as a seller, you choose the keywords or products that will guide your campaign by segmenting the ads. To do this, conduct good research on keywords and competitors’ products, and establish the type of segmentation that best suits the objectives of your business. There are three types of match types that we talked about before in this article: broad match, phrase match, and exact match.

The most important aspect of manual campaigns is the ability to bid per keyword, which implies developing various strategies to achieve higher performance based on your budget.

Final Thoughts

So, this is all the information you need for Amazon Sponsored Products campaigns. If you are a seller on Amazon, you must use this technique to optimize your marketing strategy and generate more sales. Make sure you choose the most appropriate marketing technique for your products and brands.

For more information about advertising on Amazon, you can visit the OABeans website.


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