Amazon Advertising Basics: A Beginner’s Guide to Using Amazon Ads
Whether you’ve just launched a new product or have been selling on Amazon for a while, advertising on the platform is no longer a choice – it’s a must.
With the increasing competitiveness of organic search results, Amazon advertising provides a simple way to quickly show your product to potential customers.
Not sure how Amazon advertising works? No worries; this guide will give you a clear overview of what Amazon advertising involves, how it works, and how you can effectively use it to boost your brand’s presence on Amazon.
What is Amazon Advertising?
Amazon Advertising is a platform that allows businesses to promote their products to millions of potential customers who are actively browsing and shopping on Amazon.
This advertising ecosystem encompasses various ad formats, including Sponsored Products, Sponsored Brands, Sponsored Display, and Video Ads. Advertisers can use these tools to target specific keywords, products, and audiences to increase product discoverability and drive traffic to their listings.
Amazon Advertising operates on a pay-per-click model for many of its ad formats, allowing businesses to pay only when users click on their ads. The precise amount you pay depends on several factors, including the ad type, the specific keywords or products you opt to target, and the degree of competition within your niche.
Why are Amazon Ads important for sellers?
Now that you understand what Amazon Ads are, let’s explore why they are important.
According to Statista, as of June 2022, Amazon holds a staggering 37.8% share of the US e-commerce market.
As the number of consumers visiting Amazon for online shopping continues to rise, brands are presented with a golden opportunity to showcase their products to the ideal audience and increase sales.
However, with rising competition and Amazon increasing the number of ad placements, ranking on the first page of organic search results for any keyword has become harder than ever before.
And considering that 70% of Amazon customers never click past the first page of search results, running ads for your product becomes crucial.
With a variety of Amazon advertising solutions available, you can strategically showcase your product to the right audience in the right place, preventing it from getting lost among a sea of competitors.
Types of Amazon Ads
Amazon provides four types of ads, each serving a distinct purpose and set of goals:
- Amazon Sponsored Products Ads
- Amazon Sponsored Brands Ads
- Amazon Sponsored Display Ads
- Amazon Sponsored TV Ads
Let’s take a closer look at how each ad format appears on Amazon and understand when it’s best to use each one.
Amazon Sponsored Products (SP) Ads
Sponsored Product ads are the most popular ad type of Amazon, helping you promote specific products within Amazon’s shopping results and relevant product detail pages through both automatic and manual targeting.
With automatic targeting, Amazon takes the lead in identifying and targeting the most relevant keywords and ASINs for your products. Conversely, manual targeting enables you to precisely select keywords and products for targeting. When a shopper clicks on your ad, they are directed to the corresponding product page.
Here are some benefits of using Sponsored Product ads:
- Sponsored product ads look very similar to organic results on Amazon and get intermixed with Amazon search, not hampering the customer shopping experience. This leads to a usually higher click-through rate compared to other ad types
- Automatic targeting makes it super easy for anyone to launch a Sponsored Products campaign without any prior performance marketing experience.
- If your bids are competitive enough, your ad can appear in the first 4 search results (top of search results), which is usually the most viewed placement on Amazon, giving your product high visibility among a relevant audience.
- If used wisely, Sponsored Products ads can also help you increase the BSR (Best Sellers Rank) and organic ranking of your product.
Interested in learning more about how to use Sponsored Product ads? Check out our ultimate guide to Sponsored Product Ads.
Amazon Sponsored Brand (SB) Ads
The Sponsored Brands campaign, also known as Amazon Headline Search Ads, provides an advanced advertising solution exclusively for sellers enrolled in the Brand Registry program.
These ads allow you to display your brand logo, a custom headline, a creative image, and up to three products. This comprehensive presentation offers potential customers a clear view of your brand, effectively boosting brand awareness.
Here are some advantages of using Sponsored Brand ads:
- Sponsored Brand Campaigns provide a strategic advantage by directing potential buyers to your store page, product detail page, or a custom landing page. This approach minimizes the distraction of competing products, increasing the chances of conversion as buyers focus solely on your product within the store page.
- Utilizing customized and visually appealing creatives in your Sponsored Brand campaigns allows you to weave a unique brand story. This storytelling approach fosters awareness and establishes long-term brand recall among potential customers.
- Video ads that are part of the Sponsored Brands ads are one of the most effective solutions to showcase your product virtually to potential audiences and increase consideration and conversion for your product.
Interested in learning more about how to use Sponsored Brands ads? Checkout our ultimate guide to Sponsored Brands Ads.
Amazon Sponsored Display (SD) Ads
Amazon Sponsored Display ads (also known as Product Display Ads) enable you to engage with shoppers throughout their purchase journey, both on and off Amazon.
In contrast to Sponsored Brands and Sponsored Product Ads, Display Ads offer a fresh approach to reaching your target audience. Instead of relying on keyword targeting, these ads allow you to focus on specific audiences based on their interests, shopping behavior, and past product views or purchases on Amazon.
While similar to Sponsored Product ads, you can target an individual ASIN or category; audience targeting remains the biggest advantage of Sponsored Display ads.
Whether you aim to target audiences by their interests to boost top-of-funnel engagement or prefer focusing on those who have already shown interest in your product to increase bottom-of-the-funnel conversions, Sponsored Display has got you covered.
These ads appear on product detail pages, customer review pages, top-of-offer listing pages, and search result pages.
Here are some benefits of using Sponsored Display ads:
- Retarget potential customers who have viewed your product listing in the last 180 days but did not make a purchase.
- Retarget existing customers who have purchased your product in the last 365 days to increase repeat purchases.
- Increase awareness about your product by targeting the top-of-the-funnel audience based on their interests, behaviors, and demographics.
- Advertise your product not only on Amazon but also on other third-party websites and apps.
Interested in learning more about how to use Sponsored Display ads? Checkout our ultimate guide to Sponsored Display Ads.
Amazon Sponsored TV Ads
Amazon Sponsored TV Ads is a self-service advertising solution specifically designed for brands selling on Amazon to reach new audiences on streaming TV services. Imagine traditional TV ads but with all the flexibility and targeting capabilities of Amazon’s advertising platform.
Here are some of the advantages of using Amazon Sponsored TV Ads:
- Reach new audiences: Connect with potential customers who spend time watching streaming content, even if they haven’t been to Amazon before
- Boost brand awareness: Build brand recognition and tell your story through video ads
- Drive sales: Make it easy for viewers to purchase your products directly from the ad
- Flexible and affordable: No minimum spend is required, you only pay when someone clicks on your ad.
How much bugdet you should allocate to each ad type?
When you are running Amazon Ads, it is ideally recommended to allocate 70% of your budget to Sponsored Product Ads, 20% to Amazon Brand Ads, and 10% to Amazon Display Ads for best outcomes.
Amazon PPC (pay-per-click) Ads basic terminology
Before you begin advertising on Amazon, it is important to familiarize yourself with some of the key concepts and terminology of Amazon ads. This will help you launch campaigns faster and navigate through the Ad console with ease.
Portfolio
The Portfolio feature on Amazon allows you to group and arrange multiple campaigns together. You can choose to organize campaigns based on various criteria such as brand, product category, or season, making it easy to keep track of a set of campaigns.
Another advantage of grouping similar campaigns under a portfolio is the ability to set a budget threshold, ensuring that the campaigns within that portfolio do not exceed the specified budget limit.
Budgets
Budgets in Amazon Ads refer to the maximum amount you’re willing to spend on your campaign each day. If your campaign spends less than your daily budget, the leftover amount from the previous day can be used to increase your campaign’s daily budget by up to 100% on other days of the month. It’s crucial to set a budget high enough to keep the campaign running throughout the day to avoid missing sales opportunities.
Keyword Match Types
Keyword match types help Amazon ads determine how closely you want your keywords to match potential customers’ search queries. These match types include broad match, phrase match, and exact match.
Targeting
Targeting is the way you define the context in which you want your ads to appear. Depending on the ad type you are using, you’ll have different targeting options to choose from. With Sponsored Product and Sponsored Brands ads, you can target keywords, products, and categories. With Sponsored Display ads, you can target products, categories, and audiences.
Search Terms
Search terms are the keywords or products that the customers click on to reach your product. Except for exact match keywords and ASIN targeting, your search term can be completely different from the keywords or ASINs you have targeted in your ad. For example, if you have targeted the keyword “dog toys” in a broad match, a customer can also go to your product after searching for “pet food”.
Negative Keywords
Negative targets are used to prevent your ad from showing on unwanted search terms. For example, if you are targeting the keyword “Shoes” in the phrase match type, your ad can also appear when shoppers search for “Waterproof shoes.” However, if your shoes are not waterproof, you can simply add the keyword “waterproof shoes” as a negative target to prevent your ads from displaying on irrelevant search terms. If used effectively, the negative target can be a powerful tool to reduce wasted ad spend and improve the Return on Ad Spend (ROAS) of the campaign.
Amazon Ads Reports
Amazon Sponsored Ads reports are downloadable reports that can be accessed from the Measurement & Reporting tool. You will find multiple reports for each ad type that help you understand the performance of your ads and find optimization opportunities. Some of the most useful reports are the search term report, the advertised product report, and the campaign report.
Recommendations
This is a new feature from Amazon where they provide you with recommendations around bids, budget, products, and campaigns. Here are some of the common recommendations that you will come across:
- New campaign launch opportunities to drive more awareness, consideration, and purchases for your product.
- Increase bids on your low impression targets to reach more shoppers.
- Advertise more products in your top campaigns to drive sales.
- Increase the budget for campaigns that frequently exceed their budget.
Need Smart Recommendations for your account?
Adbrew’s PPC Recommendations engine offers practical recommendations covering bids, budget, targeting, search term negation, target harvesting, and placement optimization. In contrast to recommendations in the Amazon Ad Console, these suggestions are tailored to your account’s specific goals. What’s noteworthy is that you can easily implement these recommendations with a single click, streamlining the process of optimizing and enhancing the performance of your ad campaigns.
Frequently Asked Questions
What is bidding in Amazon ads?
Bidding in Amazon ads refers to the process where advertisers set the maximum amount they are willing to pay for their ad to be shown to potential customers. Higher bids increase the chances of the ad being displayed, but the final cost depends on competition and ad relevance.
How much does it cost to run PPC on Amazon?
The cost of running pay-per-click (PPC) ads on Amazon varies and is dependent on the competition in your niche. Depending on how competitive your product category is, you can expect to pay anywhere from $0.15 to $10 per click.
How long should I run PPC on Amazon?
The duration of a PPC campaign on Amazon depends on your advertising goals and budget. You can run a PPC campaign for as long as you want, but it is recommended to regularly review and adjust your campaign to optimize performance and ensure it is meeting your desired outcomes. Some advertisers run PPC campaigns for a specific event or promotion and end the campaign after the event is over, while others run ongoing campaigns as a long-term advertising strategy.
Is Amazon advertising worth it?
Absolutely! With Amazon attracting a staggering 2.2 billion visitors each month and boasting higher conversion rates than many other advertising platforms due to the strong purchase intent of its users, running ads on Amazon is undoubtedly worth it for any seller looking to maximize their sales and reach a vast audience of potential customers.
How to optimise Amazon Ads?
To optimize Amazon Ads campaigns, focus on relevant keywords, create compelling ad copy, set appropriate bids, monitor performance regularly, and adjust campaigns based on data-driven insights.
What is the best Amazon PPC strategy?
There isn’t any specific “best Amazon PPC strategy” as every brand on Amazon is different. Nevertheless, a strong Amazon PPC strategy involves thorough keyword research, targeted campaigns, optimized ad copy, and continuous monitoring and optimization to minimize ACOS (Advertising cost of sales)
What is Amazon Marketing Services (AMS)?
Amazon Marketing Services (AMS), now officially called Amazon Advertising Console, is a suite of advertising tools and services that allows businesses to promote their products on Amazon. Think of it as a toolbox for sellers and vendors to reach a massive audience of potential customers who are already actively shopping on the platform.
Amazon advance strategy guides:
- How to Find Click Threshold for Search Term Negation in Amazon Ads
- How to automate a Keyword Harvesting Funnel?
- How to Automate Amazon PPC Budget?
- How to set up dayparting in Amazon Ads?
- How to leverage Amazon new-to-brand metrics?
- How to reduce ACOS on Amazon?
- How to Use Amazon PPC Bulk Operations to Manage Amazon Ads
Ready to get started with Adbrew?
Adbrew provides cutting-edge automation, expertly curated strategies, and data-driven insights for brands to thrive on Amazon.
Final Thought
Advertising on Amazon becomes easy once you understand the fundamental concepts and terminology. We hope that this guide has equipped you with a solid understanding of the basic principles behind Amazon ads. For those seeking even more comprehensive insights into Advanced Amazon advertising strategy, feel free to explore our blog.
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