If you’re a seller on Amazon and you’d like to promote your products, then you should take a look at Amazon Product Ads.
Why? Because they’re a great way to reach people at the lower end of the sales funnel.
Think about it: people who are visiting Amazon are probably shopping. That means they’re usually ready to buy.
Wouldn’t it be great if you could advertise to people who are shopping for products just like the ones that you’re offering? Of course it would. That’s why Amazon Product Ads exist.
In this article, we’ll go over Amazon Product Ads and show you how you can use them to drive sales.
What Are Amazon Product Ads?
Amazon Product Ads, also called Sponsored Ads, give you the opportunity to list your product in the Amazon search results and on the product detail page.
For starters, you can pick a keyword for your ad. Then, when people search Amazon with that keyword, your ad might appear.
Let’s pause for a moment and clarify the carefully worded paragraph above.
First, you can pick a keyword for your ad. But you don’t have to.
You can let Amazon evaluate your product title and description and determine on its own when to show your ad.
It’s likely you don’t want to go that route, though. You’d probably prefer to have control over when your ad appears.
Second, your ad might appear when people search for a keyword you specify. It’s not guaranteed to do so.
Why not? Because Amazon advertising uses an auction model.
Amazon Product Ads Run on The Auction Model
Again, if you’re familiar with Google AdWords, the auction model isn’t a new concept. In fact, many advertising platforms use an auction-based system.
Here’s how it works: you bid a certain amount of money that you’re willing to pay when people click on your ad. If you’re a top bidder, then your ad will almost certainly appear in the search results for a specific keyword.
Keep in mind, though, that your competitors might advertise on Amazon as well. They could (and probably will) try to outbid you.
If they do outbid you, then their ads will show up and yours won’t.
Of course, you can always jack up your bid to something extraordinarily high. But then you’re eating into your profit margin.
So that’s the delicate balance when it comes to advertising on Amazon. You need to set your bid high enough so that your ad appears, but you don’t want to set it so high that you end up with a negative return on investment (ROI).
With Amazon Product Ads You Get What You Pay For
When it comes to Amazon Product Ads, you only pay for clicks.
That means if a million people see your ad and none of them click on it, you pay exactly $0 to Amazon for your advertising. That also means your ad is an abomination in marketing terms, though.
On the other hand, hundreds of people could click on your ad and none of them make a purchase. You’ll pay for all those clicks and have nothing to show for it.
Again, that usually means there’s a problem with your marketing. In this case, that problem is on the product detail page.
What’s a Click Worth to You?
How much does a single click usually cost? That depends.
In some cases $.35 per click is all you need! However, if you’re in a high-margin business, you might expect to pay a lot more.
Let’s assume for the moment that you pay $.35 per click in a worst-case scenario. Then, it’s up to you to determine your average conversion rate.
For example, let’s say that 1 out of 10 people who click your ad end up buying your product. If you bid $.35 per click,, then you’re paying $3.50 per sale ($.35 x 10 clicks = $3.50).
Now ask yourself this question: can your profit margin afford an additional $3.50 in expenses for each sale?
If not, then you have two choices.
First, you can bid lower. That might save your ROI, but it won’t matter if your ad doesn’t appear because you’re not bidding high enough.
Second, you can just discontinue the ad entirely and look for a more cost-effective way to promote your Amazon products.
Understanding The Daily Budget of Your Amazon Product Ads
Mistakes happen. Sometimes your product detail page doesn’t convince people to click that beloved “Add To Cart” button.
If you advertise that product, you could find yourself in a situation where a lot of people are clicking your ad (and costing you money) but nobody’s buying what you’re selling. Your costs could run out of control.
Not necessarily. Amazon, like most other online advertisers, gives you the option to set a daily budget.
When you set a daily budget, you’re basically telling Amazon: “This is the most amount of money I’m willing to spend on clicks every day.” Once you’ve spent that much money, Amazon will stop showing your ad for the day.
There’s a caveat, though.
The daily budget is a misnomer. It’s really set on a monthly basis.
Let’s say you set a daily budget of $100 per day in January. Since January has 31 days, Amazon interprets that to mean that you’re willing to spend $3,100 in the month of January.
So your daily budget could run over for a single day, but your monthly spend will never exceed $3,100.
That’s why you should use caution when setting your daily budget for the first time. If you’re just “test driving” Amazon Product Ads, keep your daily budget low at first so that you can gauge interest without breaking the back.
Once you’ve let your ads run for a few days, you can check your analytics to see which products are getting clicks but not getting any sales. Then, you can decide if you need to improve your product detail page marketing or pull the plug on the ad completely.
How To Pay for Amazon Product Ads
You’ll receive a seller invoice that tells you how much you owe for clicks on your ads. You’ll see the charges in the Selling Fees section.
Amazon, unsurprisingly, is nice enough to deduct those fees from your selling account balance. That means you don’t have to worry about writing a check or issuing a payment by some other means.
If you don’t have enough money in your account to cover your advertising fees, Amazon will charge the credit card you used to enroll in the Selling on Amazon program.
You do have the option to switch to a credit card payment method, though. When that happens, your card will be charged when:
- You accumulate a dollar’s worth of clicks. That’s how Amazon validates your credit card at first.
- You accumulate clicks that reach your credit limit. That limit is how much Amazon is willing to charge you before collecting money. Every time you successfully pay Amazon, your credit limit increases. It starts at $50 and goes all the way up to $500.
- You have a balance due from the previous month.
Keep in mind: your credit card can be charged more than once in a single month. Every time you reach your credit limit, you’ll get charged.
Where Do Amazon Product Ads Appear?
If you do decide to run some Amazon Product Ads, you’ll, of course, want to know where they appear.
They won’t appear only in a single place. They can appear at the top of search results, within the search results, or even on a product detail page.
Ads show up in search results when people are searching for a keyword that you’re targeting. Again, though, that’s only true if your bid is sufficiently high.
Your ad might also appear on a product detail page of a related product. You might even be able to steal a customer from a competitor with a highly rated product that’s got a great title.
For example, let’s say you’re running an e-commerce store that sells digital cameras. You decide to place a product ad for one of your cameras so that you can get more exposure (no pun intended).
When online shoppers visit Amazon looking for a camera, they’ll, of course, click on a few different products to view product details.
As is often the case, though, they’ll scroll down to look at related products. When they do that, they might see your camera.
Why? Because you’re advertising it.
In fact, on numerous product detail pages, Amazon will display a whole section with the heading “Sponsored products related to this item.” Below that, it will list those products.
Here’s an example:
Now, if a customer clicks on your product in that box, you’ll pay whatever you bid for that click.
Amazon doesn’t discriminate against mobile users. Your ads will appear to people on a smartphone, tablet, or phablet.
In fact, your ads will also appear on the Amazon app.
That’s why you should make sure that your ads and product detail pages are optimized for visitors on a mobile platform. Otherwise, you could find yourself getting clicks but not landing any sales.
The good news is that most of the optimization effort is handled by Amazon and driven by image size requirements. Still, it’s a great idea to check your pages on mobile devices.
Headline Search Ads
You can also place Headline Search Ads for your products.
Headline Search Ads usually work best if you have multiple, related products though. They’re used to list multiple items.
Also, Headline Ads appear at the very top of the search results. As you probably already know, that’s prime digital real estate in marketing terms.
Unfortunately, you need to be a brand owner to qualify for Headline Search Ads. In other words, you can’t use a Headline Search Ad to advertise another brand’s product.
Here’s an example of a Headline Search Ad that appears right now on Amazon when a customer searches for “digital camera.”
Take a look at the top line in the search results above. It reads “Sponsored by Polaroid” with the headline “Buy the new Polaroid POP.”
Next to the headline, there are three different Polaroid products.
By the way, take a look at the two products listed just below the Headline Search Ad. Note specifically the word “Sponsored” above their titles.
That means those products are advertisements as well. That’s another place where your products will appear if you use Amazon Product Ads.
Categories Available to Advertisers Amazon Product Ads
As you probably know, Amazon categorizes all of its products. Unfortunately, not all of those categories are available for advertising.
That means even if you want to advertise, you might not be able to do so if your product falls into an unsupported category.
Here’s the list of supported categories as of this writing:
- Entertainment Collectibles
- Fine Art
- Patio, Lawn & Garden
- Arts, Crafts & Sewing
- Pet Supplies
- Automotive Parts & Accessories
- Grocery & Gourmet Food
- Health & Personal Care
- Home & Kitchen
- Sports Collectibles
- Industrial & Scientific
- Tools & Home Improvement
- Cell Phones & Accessories
- Toys & Games
- Clothing & Accessories
- Movies & TV
- Video Games
- Collectible Coins
- Musical Instruments
Are Your Products Eligible for Amazon Product Ads
Amazon doesn’t let just anybody advertise on its platform. You have to meet certain requirements:
- You must have an active seller account.
- If you want to run Headline Search Ads, you need to enroll in the Amazon Brand Registry.
- You must be able to ship to all U.S. addresses.
- You must have products in one or more of the supported categories.
- You must have new products for sale. Amazon advertising doesn’t support used or refurbished products.
- Your product must be eligible for the Buy Box.
How to Create Sponsored Product Ads
To create Sponsored Product Ads, login to Seller Central. Then, visit Campaign Manager under the Advertising tab.
Start by creating a campaign. Give it a name that’s descriptive.
Then, select either automatic targeting or pick your own keywords with manual targeting. As we’ve seen, it’s probably best to identify your own keywords because that gives you more control.
After that, set your bid. That’s the amount of money you’re willing to pay per click.
Next, set your daily budget. Remember, though, that the daily budget is really a monthly budget. So be sure to multiply your daily budget by the number of days in the current month and that’s the most you’ll spend this month.
Select the products you want to advertise. Note that you can only select products that you’re currently selling on Amazon.
You also have the option to organize your ads into ad groups. You can think of ad groups as a collection of related ads. They’re similar to ad sets in Google AdWords.
The best thing to do is to organize your advertising in a way that makes sense for your business model.
How to Create Headline Search Amazon Product Ads
To create Headline Search Ads, login to Seller Central. Then, go to the advertising tab and choose Headline Search.
Remember: you won’t even see the option to run Headline Search Ads unless you’re a brand owner.
Choose your brand. Then, select the products you’d like to advertise in your campaign.
Next, define your creative. Pick the look and feel that you think will most likely resonate with people in your target market.
Then, enter your bid. Remember, if your bid is too low, your ad won’t show. If it’s too high, you’ll eat into your profit margin.
After that, identify your keywords. Pick a variety of keywords related to the ad.
Specify your campaign duration. If you’re just experimenting for the first time with Headline Search Ads, enter a relatively short time frame.
Next, identify your daily budget. Again, though, keep in mind that it’s really a monthly budget and plan accordingly.
After that, preview your ad. Take a careful look at it to make sure that everything is lined up where you expect and that it effectively markets your products.
Also, preview your landing page. Again, make sure that the design and ad copy will get you conversions.
If you like what you see with the previews, submit your ad for review. That can take up to 3 days. You’ll receive an email once it’s approved.
Does Your Amazon Product Ad Need a Landing Page?
You might have noticed the word “landing page” just above and thought to yourself: “I don’t remember reading anything about a landing page before that.”
That’s because you didn’t.
For Sponsored Ads, the landing page is your product detail page. That’s probably the “landing page” that you’ll use for the lion’s share of your ads.
For Headline Search Ads, though, customers will be directed to a page that lists all the products you’ve included in your campaign or your Amazon store. Then, when a shopper clicks on a product on that page, he or she will be directed to the product detail page.
Wrapping It Up Amazon Product Ads
Amazon offers some great opportunities for advertising with Amazon Product Ads. Just make sure you “run the numbers” to be certain that you’ll still generate a positive return before you start using them.