Amazon Sponsored Product Ads: A complete guide for 2023

Published by: Nishant Singh
Published on:

We, at Adbrew catalyze millions of dollars of ad spend monthly through our platform, with Sponsored Product Ads being the largest contributor to the success of our clients. So, it is crucial for every performance marketer and brand owner to have a thorough understanding of this type of advertising.

What are Sponsored Product Ads?

Introduction

Sponsored Product Ads are a form of advertising on Amazon that allows you to bid on specific keywords in order to increase the visibility of your product in search results. These ads are pay-per-click, meaning you pay a small fee each time someone clicks on your ad. Sponsored Product Ads are visually similar to organic listings, which makes them attractive to potential customers. You can identify an SP Ad by a “Sponsored” tag in the description. A picture below shows Sponsored Product Ads appearing in orange block.

Placements

Sponsored Product Ads can appear on search result pages or on product pages in various locations. These ads can be triggered by keywords or product targets (ASINs, categories, etc). In case of keywords, they’ll appear when a user searches for those keywords or when a product that is relevant to those keywords is displayed on a product page. In case of product targets, they’ll appear on relevant product pages or on keywords for which the relevant products rank. The three types of placements available are:

  • Top of Search: The most desirable location for Sponsored Product Ads is on the first page of search results at the top. This spot allows products to be seen by potential customers first and can help to increase visibility.
  • Rest of Search: Sponsored Product Ads can also be displayed on search results pages in locations other than the top of the first page. These ads may appear alongside or within organic results further down the page or on subsequent pages of results. They essentially have lower bids than the former.
  • Product Pages: Sponsored Product Ads often appear on Product Detail Pages, located below the product listing. These ads typically feature similar products to the one being detailed on the page. This can be a useful strategy for advertisers trying to display ads on a competitor’s product pages, or to upsell their other products on their own product pages.

What are the Benefits of Sponsored Product Ads?

Benefits of Sponsored Product Ads
  • Targeted Traffic: One of the main benefits of Sponsored Products Ads is their ability to bring highly targeted traffic to a specific product page. For example, you can target the ASINs of competing products, potentially taking a share of their revenue.
  • Controlled Ad Spend: Sponsored Product Ads are campaigns that are divided into various ad groups, keywords and product targets. Because of this structure, you have granular control over your ad spend when running these types of ads.
  • Enhanced Organic Ranking : When a product is advertised through Sponsored Product Ads and the ad campaign is successful, it can lead to an increase in customer reviews and ratings for the product, which can also improve its organic ranking.
  • Higher ROAS: Sponsored Products Ads can be highly targeted, allowing advertisers to reach a specific audience that is more likely to be interested in their products. This can result in a higher conversion rate and a better ROAS.
  • Keyword Research: Automatic Sponsored Product Ads campaigns allows you to identify the most effective keywords with minimal spending. These keywords can then be targeted in other types of ad campaigns to amplify success on Amazon.
  • Product Exposure: Sponsored Product Ads can be a powerful way to increase product exposure, especially for newly launched products that may not yet be able to achieve organic visibility. These ads can help to get a product in front of potential customers and increase its chances of success.

What are the different Targeting Types for Sponsored Product Ads?

When setting up a Sponsored Product Ads campaign on Amazon, you have the option to choose between automatic and manual targeting based on the extent of control that you want to have. Both the targeting types are as explained below:

Automatic targeting

With the automatic targeting option, Amazon uses your product listing information to determine which keywords and products your campaign will target. This allows Amazon to select the most relevant and effective targeting options for your campaign, without requiring you to manually select keywords or products.

Auto Targeting

With the automatic targeting option, you have the option to use four different match types:

Match Types in Auto Targeting

Close Match: These ads are shown to shoppers when they use search terms that are closely related to the product being advertised.

Loose Match: These ads are displayed to shoppers when they search for keywords that are only loosely related to the product being advertised.

Substitutes: These ads target shoppers who are interested in similar products, but offered by different brands or category.

Complements: These ads are shown to shoppers viewing detail pages of products that complement yours.

Manual targeting

With manual targeting, you have more control over where and when your ads appear. You can choose specific keywords and products to target and set your bids accordingly. This option is ideal for advertisers with more experience in targeting. You can use the data from your automatic or manual campaigns to optimize and update your campaigns.

  • Keyword Targeting: Keyword targeting in Amazon Sponsored Product Ads allows you to choose specific keywords that you want your products to show up for when customers search for those keywords on Amazon. When customers search for one of the keywords that you have chosen, Amazon’s algorithm will match the products that you are advertising to the search query, increasing the likelihood that the product will be seen by potential customers. This can help to increase the visibility and sales of the your products on Amazon. There are three keyword match types explained in next section.
  • Product Targeting: Product targeting can be effective in reaching customers interested in similar or complementary products. Product targeting allows you to focus your ads more specifically and improve ad performance, potentially leading to a higher return on ad spend. It is important to consider both keyword and product targeting as part of a comprehensive advertising strategy on Amazon.
    Using product targeting in a Sponsored Product Ads campaign on Amazon you can target the ASINs (Amazon Standard Identification Numbers) of competing products and even defend your own products. This will allow you to run offensive campaigns and potentially capture a portion of your competitor’s advertising revenue. By targeting your competitor’s products, you can reach customers who may be interested in similar products and increase the visibility of your own products on Amazon.
    With Sponsored Product Ads, you can also target specific products based on various criteria, such as categories, brands, genres, ratings, and prices. Specifically, Category targeting refers to the practice of targeting specific categories of products in your campaigns. This can be done by either including or excluding specific categories from your targeting.

Need something more intelligent?
You can use Adbrew’s Daily & Hourly Share of Voice (SOV) feature to know your competitor products and subsequently run offensive product campaigns against them with a couple of clicks.

What are the 3 different keyword match types for Sponsored Product Ads?

When setting up a manual Sponsored Product Ads campaign on Amazon, you will have the option to choose the match type for the keywords. There are three match types available:

Broad: With Broad match keywords, Amazon will display your ad to a wider audience by matching your keywords to a variety of related search terms. This allows your ad to be shown to users who may be searching for terms that are similar or related to your chosen keywords.

Phrase: With Phrase match keywords, Amazon will target specific phrases and control the word order. It will eliminate search terms with additional words between the words in your phrase, but will still show for search terms with words before or after your phrase, and variations of your phrase.

Exact: With Exact match keywords, Amazon allows you to show your ad only to users who search for your exact keyword or phrase. This can be an effective way to target qualified traffic and ensure that your ad is only shown to users who are actively searching for the specific product or service you offer.

A table below shows how the implementation of these match types would look like with an example –

KeywordWill appear on
Broadt-shirt for ment-shirt printed for men
t-shirt printed for men
Phraset-shirt for mengray t-shirt for men
t-shirt for men m size
Exactt-shirt for ment-shirt for men

What are the bidding strategies in Sponsored Product Ads?

For both automatic and manual Sponsored Product Ads campaigns on Amazon, you must choose a campaign bidding strategy, which determines how your bids are going to increase or decrease while you are running the campaigns. There are three different bidding strategies available as follows:

Dynamic bid-down only: Amazon may decrease your bid if they believe that your ad is less likely to result in a sale. This can help to save your money on each click by reducing the amount you pay for less effective advertisements.

Dynamic bid-up and down: Amazon may increase your keyword bid by up to 100% if they believe that your ad is more likely to result in a sale. On the other hand, if your ad is less likely to convert, Amazon may decrease your bid. This automatic bid adjustment feature can be useful for maximizing the effectiveness of your ads, but it may not be suitable for those who have strict budget constraints.

Fixed bids: Amazon does not alter your bids unless you change them yourself. If you have a specific budget in mind for how much you are willing to pay per click, you can use either fixed bids or down-only dynamic bids to ensure that your bids remain at a consistent level. This can be useful for managing your budget and ensuring that you do not overspend.

How to set up a Sponsored Products Ads Campaign?

To set up a Sponsored Products campaign on Amazon, you can follow these steps:

  1. Go to the “Advertising” tab in Seller Central.
  2. Click on “Campaign Manager.”
  3. Click on “Create Campaign.”
  4. Under “Choose your campaign type,” select “Sponsored Products.”

5. Under “Settings,” enter your campaign name, desired date range, optional portfolio, daily budget, and targeting type.

Now, you’re in the Campaign Manager. The next steps from here would be unique for you & are as follows –

6. In the Campaign Manager, create an ad group with a custom name to help you stay organized as you launch more campaigns. For example, if you are running campaigns for different match types, you can name the ad group based on the match type.

7. Choose your targeting type: product or keyword. It is generally recommended to start with keyword targeting, as this allows you to reach a wider audience.

8. Under keyword targeting, you can add keywords to your ad group. Amazon will suggest keywords to target and provide a suggested bid amount per keyword. You can also enter your own keywords from your keyword research.

9. While adding keyword targets, you’ll be asked whether you want to add the keywords as exact targets, as phrase targets or as broad targets (as displayed in a picture in match types section)

10. For both automatic and manual campaigns, you need to choose your campaign bidding strategy — how you want to pay for clicks on your ads.

11. Add negative keywords to exclude searches that are not relevant or do not convert. Negative keywords can help improve the performance of your campaign by preventing your ads from being shown to irrelevant customers.

12. Click “Launch Campaign” to start your Sponsored Products campaign.

Looks too hectic right?
Adbrew’s Campaign Launcher allows you to use intelligent automation to efficiently set up and manage your advertising campaigns. These features can help you streamline the process of creating and launching campaigns on Amazon, saving you time and effort.


How to optimize Sponsored Product Ads Campaigns?

Once your Sponsored Product Ads campaign has been up and running for at least 7–10 days, you can start optimizing it to enhance the performance. The fundamentals of optimization are:

Fundamentals of Sponsored Product Ads Campaign optimization
  1. Search term negation: Your Auto and Broad match campaign can trigger your ads on a lot of irrelevant search terms. You need to make sure that you negate those and reduce ads spend leakage.
  2. Bid Optimization: It’s hard to nail the ideal bid for each target during the campaign launch. Thus, you will need to increase or decrease the bids of targets based on their performance and your campaign goals.
  3. Budget Optimization: If you are working with a limited budget, you’ll need to move the budget from low-performing campaigns to high-performing ones.
  4. Target Harvesting: Move the good-performing keywords and ASINs from a campaign with a broader reach (like auto or broad match) to a more hyper-targeted campaign (like phrase& exact match) to get more control over those highly profitable targets.
  5. Bid Adjustment by placement: As discussed above in this blog, Amazon gives you the flexibility to increase bids for top-of-search and product page placement. Once you have some data, increase or decrease (can’t be less than 0%) the bids for placement based on their performance and your goal with the campaign.

These are some key strategies for optimizing your Sponsored Product Ads campaign. By following these steps, you can improve the performance of your ads and drive more sales for your products on Amazon.

Need something more efficient?
Adbrew offers you multiple account-level views for products, keywords and search terms that can give you a clear idea as to what is working for you and what is not. Moreover, you can automate your keyword movement from auto to manual campaigns, or do negation of bleeding search terms using target movement automation in Adbrew.

Leave a Comment

Ready to Get Started with Adbrew?

We can talk about your requirements, problems that you want Adbrew to solve, go through our demo, talk about pricing or just catch up in general!