Amazon Ads Basics : A Beginner's Guide to Using Amazon Ads

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Amazon Ads Basics : A Beginner’s Guide to Using Amazon Ads

Nishant Singh

30 Jul 2023

Whether you’ve recently launched a new product or are an established seller on Amazon, advertising on the platform is no longer just an option – it’s a necessity.

As organic search results become increasingly competitive, Amazon advertising offers a straightforward solution to swiftly showcase your product to potential shoppers.

Unsure about how Amazon advertising operates? Don’t fret; this guide will provide you with a concise overview of what Amazon advertising entails, how it functions, and how you can adeptly utilize it to expand your brand’s presence on Amazon.

What are Amazon Ads?

Amazon Ads, also referred to as Amazon PPC ads or Amazon Marketing Services, is a platform for advertising on Amazon.

This platform operates on a pay-per-click (PPC) model. As the name implies, you remit payment to Amazon each time a customer clicks on your ad, irrespective of whether they ultimately make a purchase.

The precise amount you pay hinges 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 ecommerce 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 all the different types of available Amazon advertising solutions, you can showcase your product to the right audience at the right placement, preventing it from getting lost amidst a sea of competitors.

What are three types of Amazon Ads?

Amazon provides three types of ads, each serving a distinct purpose and set of goals:

Amazon Sponsored Products Ads
Amazon Sponsored Brands Ads
Amazon Sponsored Display Ads

Let’s take a closer look at how each ad format appear on Amazon and understand when it’s best to use each one.

Amazon Sponsored Products (SP) Ads

Sponsored Product ads are the most widely used ad type, helping you promote specific products within Amazon’s shopping results and relevant product pages through both automatic and manual targeting.

With automatic targeting, Amazon determines and targets the most relevant keywords & ASINs for your products, while with manual targeting, you have the ability to precisely target keywords and products. When a shopper clicks on your ad, they are redirected 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 product 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? Checkout our ultimate guide to Sponsored products Ads.

Amazon Sponsored Brand (SB) Ads (Formerly Headline Search Ads)

Sponsored Brands ads, also referred to as Headline Search Ads, offer a more advanced advertising solution exclusively available to sellers enrolled in the Brand Registry program.

With these ads, you can showcase your brand logo, custom headline, creative image, and up to 3 products, offering potential customers a comprehensive overview of your brand and effectively enhancing brand awareness.

Here are some benefits of using Sponsored Brands ads:

Instead of cluttering the buyer’s brain with your competitor’s products along with yours, SB Campaigns allow you to redirect the potential buyer to your store page or custom landing page, which increases the likelihood of conversion as buyers get to see only your product on the store page.
Using customized and rich creatives in your Sponsored Brands campaigns, you can craft a unique brand story that fosters awareness and 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 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.

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.

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 on Sponsored Product Ads, 20% on Amazon Brand Ads and 10% on Amazon Display Ads for best outcomes.

Amazon PPC 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 customers searched for or clicked 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 toy” in broad match, a customer can also reach 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 a shopper 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 term. If used effectively, 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 Measurement & Reporting > Sponsored Ads reports. 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 PPC Recommendations engine provide you recommendations around bids, budget, targeting, search term negation, target harvesting, and placement optimization. Unlike Amazon Ad Console recommendations, these recommendations are generated based on the goals of your account. The best part? You can apply these recommendations with just one click to optimize and improve 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 maximize ROAS.

Takeaways

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 ad strategies, feel free to explore our blog.