When customers go to Amazon, they have over 600 million products to choose from.
All it takes is a great product and a little Amazon advertising know-how to climb the search results and land in front of your customers.
Here, you’ll learn all about how to advertise on Amazon.
What We’ll Cover:
- The requirements for advertising on Amazon
- The benefits of using Amazon ads
- The different ad types available:
- How to create your first campaign
- Tips for success
Advertising on Amazon is hitting new highs.
In fact, in the third quarter of 2019, Amazon’s ad revenue shot up to $3.6 billion. That means that as 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)
- 72% of consumers use Amazon to discover new products they may be interested in. (CPC Strategy)
- 54% of online shoppers look on Amazon before looking anywhere else. (Retail Dive)
Clearly, Amazon is where customers go to research and shop. And the best way to make sure they take notice of your product? Advertise it.
Here’s how to get started.
Requirements for Advertising
Before any bidding begins, Amazon has a short list of requirements that must be met.
To advertise, you must:
- Have an active professional seller account
- Must be able to ship to all US addresses
- And, Sponsored Product listings must be eligible for the Buy Box
Which of course, brings us to the Buy Box.
The Buy Box is simply the box that appears on your product page that lets customers begin adding items to their shopping carts.
The catch? It requires a little healthy competition. If multiple sellers are selling the same product, they have to compete to earn the Buy Box on their page.
The Benefits of Advertising on Amazon
There’s many, but I’ve highlighted a few favorites.
In general, selling on Amazon benefits business because you’re selling to buyers, not browsers.
When consumers go to Google, they’re doing their research. But when they go to Amazon, they have a specific product in mind and are looking to buy.
This is why choosing to spend a good portion of your advertising dollars on Amazon ads will likely yield better results.
Beyond that, using ads drastically increases the likelihood of your product being found by customers. Bidding for and winning a relevant keyword will result in many more views than a non-sponsored listing.
Amazon also allows you to optimize your ad performance by adjusting your selected keywords and budget at any given time, as well as pause and restart your campaign.
Last but certainly least, the different ad types allow advertisers to pick the option best suited for their strategy.
For example, those businesses looking for primarily brand awareness will benefit most from Headline Search Ads, while those hoping to compete more closely with competitors should go for Product Display ads.
Amazon Ad Types
Amazon ads are available in three formats: Sponsored Products, Headline Search Ads and Product Display Ads.
You’re probably most familiar with Amazon Sponsored Products, which are image ads that appear in several places around the site.
They often appear in search results and can look much like regular product listings (which is one their biggest advantages).
These promote regular individual listings, and you’ll be able to tell them apart from regular, non-paid listings by the gray “sponsored” label at the top of the item’s title.
Recently, Amazon Sponsored Products began showing up on the “Add to Cart” page, as products related to those you’ve recently or are in the process of purchasing.
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.
After clicking, they’ll be taken to your product details page (which looks just like any other, non-sponsored page).
Similar to Google Ads, Amazon uses keyword-based targeting which advertisers bid on. The more popular the keyword, the more expensive.
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 ads tend to be the most costly of the Amazon advertising options.
As a deluxe style of advertising, vendors can upload the following:
- Custom creative content.
- 3 ASINs (Amazon Standard Identification Numbers)/products.
- A link that takes the visitor to a custom landing page.
Advantages of Sponsored Products:
- Wider targeting options. You can choose to do the work and control the keywords and bidding, or select automatic targeting, which allows Amazon to match your ad with relevant keywords
Works Best For: Customers already in the decision-making process
Cost: Minimum cost-per-click .2c, minimum daily budget $1
Sponsored Brands ads, formerly known as Headline Search Ads, are intended for brand owners to promote their brand and product portfolio.
They appear as a banner above the result listings in the website and mobile app, making them another valuable tool for brands.
These also operate on a cost-per-click, keyword-driven basis, and direct customers to a specified page on Amazon.
Those pages could be:
- An AMS brand page
- A custom URL
- A best-selling product
In 2019, Amazon made a number of upgrades its Sponsored Brands ads. These include:
- Negative keyword targeting
- The addition of several broad match variations (plurals, synonyms, related keywords)
- The inclusion of broad match modifiers
- Upgraded to a carousel format on mobile devices (previously, the ads were static)
- A new product optimization feature that automatically selects the most contextually relevant ASINs from your Store or landing page to help engage shoppers with more relevant ads
Advantages of Sponsored Brand Ads:
- You are able to choose where customers land, including custom landing pages, unlike other Amazon ad types
- You can choose the copy and images, allowing brands to write creative headlines and copy
- It allows you to advertise multiple products at once
Works Best For: Brand awareness
Cost: Minimum cost-per-click is .10c; minimum campaign budget $100
Sponsored Display Ads (Product Display Ads)
In September 2019, Amazon unveiled a new ad type: Sponsored Display Ads.
According to Amazon, this new ad type is replacing the former Product Display Ads, noting that all existing Product Display campaigns are now part of Sponsored Display with no additional action required on the part of the advertisers.
The most notable feature in the new ad type is its ability to retarget Amazon shoppers.
Beyond that, these ads aren’t just limited to the 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 use Audiences that are automatically created based on relevant Amazon shopping activities. These can be targeted by:
Keep in mind, Sponsored Display ads are still in beta. As of now, they are only available to professional sellers enrolled in the Amazon Brand Registry, as well as vendors and agencies with clients who sell products on Amazon in the US.
- Amazon shoppers retargeting ability
- Aren’t limited to Amazon.com
- Shop now button that links back to your detail page on Amazon
Works Best For: Customers in the consideration phase, often those price shopping or comparing brands
Cost: Default campaign budget $100
The competition on Amazon is cutthroat level. You really need to find a way to stand out in the crowd.
One of the best ways to do that is with video ads.
Why? Because many of your competitors probably aren’t using video in their Amazon ads.
You can run video ads on Amazon.com, iMDb, and Amazon devices like FireTV.
Amazon also offers video ad consultants if you’d like to go the managed-service route.
Advantages of video ads:
- Stand head and shoulders above the crowd with attention-getting messaging
- Communicate more than you can with a simple image and ad copy
- Gives your brand a polished look
Video ads work best for:
- Companies with a lot of money to invest in marketing
- Brands with a proven track record of producing high-quality video marketing messages
Cost: If you want to run video ads, though, prepare to spend some big bucks. A successful video campaign will generally cost at least $35,000.
How to Create Your First Campaign
Luckily, it doesn’t require much difficulty on the advertisers’ part to set up a 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 into your Seller account and select “Campaign Manager” from the Advertising drop-down.
Once there, you’ll be prompted to “set up your campaign budget and duration.” This is relatively straightforward, though you should decide on an overall monthly budget and timeline prior to the setup process.
This is also where you will be able to choose between Automatic Targeting (Amazon auto-generates keywords for you) and Manual Targeting (you choose).
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.
The next screen asks you to choose which product you’d like to advertise (only one product is allowed per campaign).
Then comes the keyword info. First, you’ll be asked to specify how much you’re willing to spend for each keyword.
This will ultimately determine how many clicks you’ll get per day. Say you already selected a $20 daily budget and set your keyword bid for $1; 20 clicks will be your daily maximum click-through rate.
Once the budget is set, the keyword selection begins. Amazon will offer you a list of suggested keywords, though you’re free to enter your own.
And that’s it. Click “save & finish” and your campaign’s ready to go.
Tips for Success
Beginning to advertise on Amazon can be daunting, but I have a few tips to get you started.
1. Experiment with Automatic Targeting
Over at Sellics, they recommend running an automatic and manual campaign at the same time. Start your Amazon campaign with automatic, evaluate which terms have produced the most sales, then copy them into a manual campaign.
2. Concentrate on Your Creative
If you’re running a Headline Search or Product Display ad, you have a great opportunity to play with your ad copy.
So don’t rely on the average listing lingo; use actionable and engaging messages to entice customers to click through.
3. Use Amazon Reporting Tools – And Focus on Click-Through and Conversion
Amazon Marketing Services (AMS) will track key campaign metrics, including total ad clicks, total ad spend and total amount earned.
Another metric often focused on is Average Cost of Sales (ACoS), which calculates the total cost of advertising divided by the number of sales generated.
While ACoS is great for determining overall profit, keep in mind that click-through and conversion rate will tell you whether your product and pricing is competing successfully on Amazon.
If you find that your listing is not performing as well as desired, start experimenting. Try a new price, set a new keyword, or tweak your your copy.
5. Choose Keywords That Fit Your Budget
If your budget is limited, you may not be able to win highly competitive keywords.
So concentrate on what you can win: lower traffic keywords. They may not receive the same amount of impressions, but as long as it fits your niche it will still effectively target the right audience.
6. Experiment With All Ad Types
Don’t limit yourself to one type in your Amazon campaign – give them each a shot to determine which best for your brands. Each has its own unique advantages and may yield surprising results.
7. Use ‘Adjust Bids by Placement’
One way to get more sales out of your Amazon ad campaign is to use Adjust Bids by Placement
Formerly Bid+, using the feature allows you to increase the odds that your ad appears at the top of the search results. Just keep in mind you can only use it for ads that are eligible to appear at the top.
Another thing to keep in mind: adjust bids by placement can increase your bid by as much as 900%.
8. Include Your Product’s Top Benefit in Sponsored Brand Headlines
If you’re running a Sponsored Brands Campaign, Amazon recommends that you identify your product’s top benefit in the headline.
Why? Because Amazon shoppers can only see the product image and the headline.
So do yourself a favor: identify pain points that your customer faces. Then, make a list of ways that your product alleviates those pain points.
From that list, pick the best benefit to advertise in your headline.
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?
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 similar 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 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.
The best way to do to start advertising? Jump right in.
Choose an ad type, pick your keywords (or even better – let Amazon), and watch what happens. Tweak ads as needed and remember, it comes with a learning curve.
The most important step is to simply get started.