What We’ll Cover:
Advertising on Amazon is hitting new highs.
In fact, in Q4 of 2019, Amazon’s ad revenue shot up to $9.7 billion. That means that as of now, Amazon’s entering the ring with paid media giants like Google and Facebook.
90% of online shoppers use Amazon to check on prices. (Big Commerce)
74% of consumers begin their product search on Amazon. (Chain Store Age)
63% of online shoppers go straight to Amazon when they’re looking for a product. (Fit Small Business)
Amazon has quickly become the go-to place for customers to shop. With the rapidly evolving nature of the marketplace, there are a variety of ways to get shoppers to take notice of your products. A big factor that helps boost your rank and makes your listings more discoverable is advertising.
Amazon Marketing Services
Getting started with advertising on Amazon starts with a clear understanding of what it means to be a part of Amazon’s Advertising structure.
Ad Console is Amazon’s pay-per-click (PPC) platform where sellers can get their products in front of thousands of visitors based on search queries, products and shopper intent.
Ad Console is an advertising platform, which belongs to the main umbrella of Amazon Advertising, seen below.
Requirements for Amazon Advertising—
To advertise, you must:
- Have an active seller central account
- Must be able to ship to all US addresses
- Products must be the featured offer in the buy box
What is a buy box, you ask?
The buy box is the offer box you see on the right-hand side of a product page that indicates who is selling the item. Amazon encourages competition and just because you are the brand owner of a product, that does not guarantee you the buy box. If there are multiple sellers for the same product, typically the product with the lowest price will win the buy box and be the featured offer on the page.
The Benefits of Advertising on Amazon—
Amazon shoppers are typically far down the purchase funnel and are ready to buy when they shop on the marketplace.
Compared to Google and Facebook, you can expect a stronger conversion rate on both your organic and advertising placements on Amazon.
Because it is a saturated and highly competitive space, advertising is essential to ensure your products are visible in front of the right consumers.
With different ad types, you can tailor your advertising approach to guarantee you hit your sales goals. For example, if your goal is brand awareness, you can utilize Sponsored Brand ads to get recognition on the top of the SERP (search engine results page) for a given search term.
That leads us to the different ad type options on Amazon…
Amazon Ad Types
Amazon ads are available in several different formats: Sponsored Products, Sponsored Brands, Sponsored Brand Videos, Sponsored Display (Product Targeting & Retargeting), and Sponsored Products Product Targeting.
You are probably most familiar with Sponsored Product ads, which are product-level ads that appear in the SERP as well as on product detail pages.
They often appear in search results and can look much like regular product listings (which is one of their biggest advantages), though they have a gray “sponsored” label at the top of the item’s title.
Sponsored Products ads work similarly to your average pay-per-click (PPC) ads. They operate on a cost-per-click pricing model, and you only pay when a customer clicks on your ad. Like Google Ads, Amazon uses keyword-based targeting which advertisers bid on. The more popular the keyword, the more expensive.
After clicking, shoppers will be taken to your product detail page (which looks just like any other, non-sponsored page).
Amazon suggests using Sponsored Product ads for “product visibility, new offers, unique selections, offers with low glance views, clearance items, and seasonal promotions.”
Keep in mind, Sponsored Product ads tend to be the costliest of the Amazon advertising options. However, we have found them to be essential to make your products visible on the Amazon marketplace.
You have several options when setting up Sponsored Product ads: The 1st is called Automatic targeting which allows Amazon to target keywords and products it deems similar to the product you’re advertising. The 2nd is called Manual targeting, where you select the keywords and products you want to show up for.
Automatic, or Auto, campaigns are great for when you are just getting started and act as discovery campaigns to help you understand how consumers interact with your products. Manual campaigns are better as a targeted approach to advertising after you have learned where your products perform best.
Sponsored Product ads can help lay the framework for your advertising approach as they help ensure your products are discoverable to the best-suited consumers.
Sponsored Brands are shown at the top of the SERP for a given search term. To run these ads, you must be brand registered and have a brand logo.
These also operate on a cost-per-click, keyword-driven basis, and direct customers to a specified page on Amazon. Those pages can be a brand storefront, a custom landing page of products, or even a product detail page (reserved for Sponsored Brand Video campaigns).
This ad type has several new feature additions that can be used to further help push products. The 1st is the Custom Image feature which allows brands to utilize lifestyle-centric images that show how the product can be used. The 2nd is the Video feature which allows a brand to upload a video for a single product and direct traffic into that product’s detail page. This can be a value add for products that may benefit from a quick “How-To” guide.
Sponsored Brands are a great way to broadly grow brand awareness, push less popular products, and show consumers how they can use your products with lifestyle imagery and video content.
With Sponsored Display, you can run ads to customers who have viewed your product, viewed similar products, purchased from you, or are using relevant keywords in their searches on Amazon. The most notable feature is its ability to retarget Amazon shoppers.
Beyond that, these ads are not just limited to Amazon SERPs. Rather, they can be displayed anywhere on Amazon’s advertising network, which includes Amazon.com, as well as any company it owns or partners with.
Sponsored Display uses Audiences that are automatically created based on relevant Amazon shopping behaviors. The 2 different options when setting up an SD campaign are:
- Views Remarketing: “Reach custom audiences who viewed product detail pages matching criteria you choose.”
- Product Targeting: “Choose specific products or categories to target your ads.”
From there, you can choose your audience based on categories of the product, i.e. Arts & Crafts, or by selecting a group of ASINs.
Amazon is working to make Sponsored Display ads an entry-level opportunity for brands to get their feet wet in display advertising before investing in it with Amazon.
How To Create Your First Campaign
Congratulations! You are ready to get started advertising on Amazon.
Luckily, it does not require much difficulty on your part to set up a new campaign.
And while the process is relatively similar for the different ad types, I’ll run you through the process for the most popular – Sponsored Product ads.
First, sign in to your Seller account and select “Campaign Manager” from the Advertising drop-down.
Once there, you will be prompted to “set up your campaign budget and duration.” This is fairly straightforward, though you should decide on an overall monthly budget prior to setting up. We recommend setting the campaign to run without an end date unless the campaign is meant for a specific duration or deal-running period.
This is also where you will be able to choose between Automatic Targeting and Manual Targeting.
Next up, Amazon will ask you to name your ad group. One thing to keep in mind here is that Amazon allows you to add multiple ad groups to the same campaign, so you’ll want to choose a name that’s easily distinguishable if you are adding more than 1 product per campaign. Ad groups can help organize your campaigns to best track performance by product or product grouping. Another thing to keep in mind is that products that are in the same ad group will share the same bids and targets.
The next prompt asks you to choose which product you would like to advertise.
Then you will have the option to set your bid levels for Auto targeting or select a group of keywords or products for Manual targeting. You can also add negative keywords or products, which tells Amazon you do not want to show up for those terms/products.
And that is it. Click “save & finish” and your campaign’s ready to go.
Tips for Success
Amazon Advertising FAQs:
1. 📉 Why do some marketers think that advertising on Amazon offers a clearer ROI than other options?
Because Amazon is closer to the point of purchase. Think about it: when you advertise on Amazon, you’re running ads on the same platform that people use to buy stuff. On the other hand, if you run search ads, you still need to get people to your site before they make a purchase. So there’s an extra step involved. It’s easier to see how much ad spend actually converted when you advertise on Amazon.
2. 🤔 Why are some marketers still reluctant to advertise on Amazon?
Because they’re concerned that Amazon is competing against them. Plenty of advertisers fork over big bucks to run ads on the ecommerce platform. Then, they find out that Amazon is showing pop-up promotions for its own products while their ads are displayed underneath. So Amazon isn’t just another advertising channel. It’s also a competitor. That’s something you need to take into account when you advertise on the platform.
3. 🔎 Can I use negative keywords?
Yes. You might need to enlist the aid of tools to find those negative keywords, though. Check out Jungle Scout and Viral Launch. After that, use some common sense. Identify keywords not related to what you’re selling that people might use in search. Finally, use the search term query report. Identify keywords that have more than 15 clicks but no orders. Those are probably keywords you should negate.
4. 💰 What’s the cost of advertising on Amazon?
Generally speaking, advertising on Amazon tends to cost less than advertising on Google Ads or Bing Ads. Amazon ads operate on a CPC basis, meaning you pay only when a user clicks on your ad. According to Practical Ecommerce, the average CPC of an Amazon ad is generally below $.35. Note that according to Amazon, the minimum cost-per-click for Product Display Ads is $0.02. You will not be charged more per click than what you bid.
5.❓ What’s the difference between self-serve ads and Premium ads?
Self-serve ads function similarly to Google search ads and are displayed on the search results page. According to Amazon statistics, approximately 76% of online shoppers will use the search bar to look for a specific item. Self-serve ads hit this market. Premium ads are displayed throughout the Amazon site. They can be displayed as a visual banner or sidebar ad.
6. ✅ Does amazon advertising work?
If you’re selling a product that consumers can purchase online then, yes, you should definitely be advertising on Amazon. It is an excellent way to expand your market and increase the number of people exposed to your product. If you’re nervous about jumping in feet first you can always test a product or two before diving in further. Another compelling reason to start an ad campaign on Amazon is that it is a great way to improve your organic rankings as you are deepening your product’s sales history.
7. 🖥 How do I start advertising on Amazon?
To get started with Amazon advertising you must first have an active seller account. You’ll need products in one or more of the Amazon product categories and have the ability to ship your products to all U.S. addresses. The final step to get started with Amazon advertising is that the products you want to run ads for the need to be winning the Buy Box at the highest rate.
8. 💭 Are Amazon ads worth it?
With Amazon holding nearly 40% of the entire U.S. eCommerce market, it is safe to say that it may be worthwhile to consider an Amazon advertising strategy. The average Amazon cost per click is about $0.97, and whether or not Amazon ads are worth it to you, should be based on your product type, ad strategy, budget, content strategy, visual capabilities and average product positioning.