Amazon started off in 1994 as an online bookstore. And 30 years later, we have a multinational technology and e-commerce company with over 9.7 million sellers and 2.64 billion shoppers globally!
Do you know what that means? The Amazon marketplace is growing. But even more so, it means that the competition on Amazon is tougher than ever!
How to beat the competition? With Amazon-sponsored product ads, of course!
In this guide, we will tell you all about Amazon-sponsored products, what sponsored means on Amazon, and are Amazon-sponsored ads worth it.
But before we dive into the details, let us tell you what Amazon-sponsored ads are.
What are Amazon Sponsored Product Ads?
When you’re searching for stuff on Amazon, have you noticed those ads or sponsored products right at the top? Well, they are called Amazon Sponsored Products.
Sellers use this Amazon advertising feature to shine a spotlight on their products. These ads can pop up in different places, like when you’re checking out search results or browsing product pages.
The best part is that it is a pay-per-click deal, meaning sellers only have to pay when someone actually clicks on their ad.
So, how do they work? Let us have a look!
What’s the Deal with Amazon Sponsored Products Ads?
Amazon-sponsored product ads can help you increase your product’s visibility and sales on the platform. Understanding how these ads work is key to making the most of Amazon’s vast marketplace.
Here is a rundown of how these sponsored ads work:
Creation and Campaign Setup
If you are a seller looking to boost your products’ visibility on Amazon, Sponsored Products is the way to go! To get started, simply create advertising campaigns using Amazon Advertising. You will get to choose which products you would like to promote and set your campaign settings, like budget, duration, and targeting parameters.
Keyword Targeting
Sponsored Products come with a feature called keyword targeting. As a seller, you can choose the right keywords that potential customers might use when looking for products similar to yours. So, when someone searches for something that matches these keywords, your sponsored product might show up in the search results.
Bidding System
When sellers want to advertise their products on Amazon, they have to bid on ad placements. It’s called the bidding system. Sellers set a maximum bid, which tells Amazon the highest amount they’re willing to pay when someone clicks on their ad. The higher the bid, the greater the chances of winning the ad placement for a specific keyword.
Auction Process
Amazon picks the sponsored products that appear when you search for something. It is actually pretty interesting! They hold an auction to decide which products to show you. The auction looks at things like how much the seller is willing to pay and how relevant the product is to your search. The product with the highest bid and relevance wins the auction and gets displayed for you to check out.
Ad Placement
Sponsored product ads can appear in various locations on the Amazon platform. They are commonly found on search results pages, often at the top or within the first few search results. Additionally, these ads can be displayed on product detail pages, offering sellers an opportunity to showcase their products to shoppers interested in similar items.
Cost-Per-Click (CPC) Model
Sponsored Products operate on a cost-per-click (CPC) model. This means that sellers are only charged when a shopper clicks on their ad, not when the ad is displayed. The CPC model allows advertisers to pay for actual engagement with their products, making it a performance-based and measurable advertising solution.
Budget Management
Sellers have control over their advertising spend by setting daily or lifetime budgets for their campaigns. Once the budget is reached, the ads may stop displaying for the remainder of the day or campaign period, depending on the chosen budgeting option.
Performance Metrics
Amazon provides detailed performance metrics for Sponsored Products campaigns. Sellers can track key metrics such as click-through rate (CTR), conversion rate, and total sales attributed to the ads. Analyzing these metrics helps sellers assess the effectiveness of their campaigns and make informed decisions to optimize performance.
Enhanced Product Visibility
By participating in Sponsored Products advertising, sellers increase the visibility of their products to a broader audience. This is especially beneficial for new products or items that may not rank as high organically in search results.
Continuous Optimization
If you want to make the most out of your Amazon advertising, it’s important to keep refining your campaigns. You can do this by tweaking your bids, adding or removing keywords, and trying out different ad creatives. By keeping a close eye on how your ads are performing and making adjustments based on the data, you can ensure that your Sponsored Products ads are as effective as possible!
Is Amazon Advertising Worth It?
As an Amazon seller, one of the biggest questions that comes to your mind is, “Is Amazon advertising worth it?”
Whether Amazon advertising is worth it or not depends on several factors. Below are some benefits and drawbacks of Amazon advertising that will help in giving us a clear image.
Pros of Amazon Advertising
Let us start with the bright side of Amazon advertising:
Organic Ranking of Products
If you are looking to sell your product on Amazon, then you will want to know about Amazon PPC strategy. One of the best things about Amazon advertising is that it can help your product get noticed on Amazon’s website, even if it is new and does not have much visibility yet.
Basically, Amazon PPC allows your product to show up on the first page of search results right from the start. This can be a game-changer because, with a great product, good pricing, and a well-written product description, this instant visibility can lead to early sales. And as we all know, early sales can help push the product higher in search rankings.
Of course, there are other ways to launch a product, but using Amazon ads usually results faster than other methods.
Delivers Strong Return on Ad Spend
Even though Amazon advertising may seem a bit pricey, it can be a really good investment compared to other advertising platforms out there.
On average, sellers make about $4.50 for every dollar they spend on ads, which is pretty impressive. That is what we call a 4.5x Return on Ad Spend (ROAS). When you compare this to Google, Facebook, or influencers, Amazon ads really stand out as a great option.
So, if you are looking to advertise your products, Amazon ads are worth considering!
Product Promotion in Unique Places
With Amazon PPC campaigns, you can showcase your products in places where they might not show up naturally.
Imagine the first row you see when you search for something on Amazon; that gets a lot of clicks. Amazon PPC lets you appear there. Also, when you look at a product’s details, there is a special spot for sponsored ads, like the first row of related products, where your ad can grab attention.
Data Points
When you’re starting out as an Amazon seller, it is easy to just focus on ACOS, which is the cost of advertising compared to the sales it brings in. But did you know that there are many other data points you can explore?
Amazon provides basic information such as how often your ad appears, how much each click costs, and how often people buy after clicking. But now, they’ve added even more details, like where your ad appears in search results and metrics that show if your ad is bringing in new customers.
This extra information is especially useful for experienced sellers who want to fine-tune their ads and get even better results.
Efficient Pay-Per-Click Model
Have you ever wondered how Amazon’s pay-per-click advertising system works? It is quite simple; you only have to pay when someone clicks on your ad. Unlike other platforms like Facebook Ads, where they charge based on the number of times your ad is shown (cost-per-thousand impressions or CPM), Amazon’s system is pretty straightforward and efficient.
This makes it easy for Amazon sellers to see which ad campaigns and keywords are performing well and make changes quickly if they are not.
Cons of Amazon Advertising
While Amazon advertising has pretty strong benefits, it comes with its share of loopholes as well:
It’s Getting Expensive
If you have been running ads on Amazon lately, you may have noticed that the cost has gone up a bit. But don’t worry; there’s still plenty of opportunity out there for sellers like you to do well with Amazon ads.
Here’s how it works: Amazon PPC advertising is like an auction.
- Sellers bid to have their ads shown when people search for specific things.
- More sellers joined in, and they all wanted to use these ads, making it a bit like a competition.
Because of this, the cost for each click went up.
In 2020, the average cost for a click was 85 cents, and by the end of 2022, it went up to $1.06. But the good news is that it used to be even higher in 2021, reaching $1.32. People were worried that ad costs would keep going up, but thankfully, that didn’t happen.
So, even though it costs a bit more now, there are still good chances for sellers to succeed with Amazon ads.
It’s Getting More Complex
As Amazon has grown, it has become a bit more complex, but that’s not necessarily a bad thing.
The increase in complexity means that the system has matured, and there are now more ways to boost your sales by leveraging the available data.
However, for new sellers, it can be a bit intimidating to learn how to use the system. It used to be very easy and quick to start with Amazon PPC, but nowadays, there are more types of ads, different places to put them, and more ways to target customers.
It Has Certain Limitations
While Amazon Ads is a great tool to promote your products, there are a few limits you should be aware of. For example, if you want to show ads to people who have already checked out your product, it can get a bit tricky.
It’s also worth noting that some things that are easy to do on Facebook Ads, like targeting specific ads for certain groups or collecting emails, can be a bit more difficult on Amazon.
Overall, while there are some limits to Amazon Ads, it’s still a great way to promote your products and reach your target audience.
So, is Amazon advertising worth it?
That would be a yes!
Having a smart Amazon PPC campaign can be a game-changer for your product. It’s like hitting two birds with one stone!
Your product not only shows up better in searches without paying too much but it also gets seen in important spots that you can’t reach naturally. This boosts your brand’s visibility, so more people get to know about it, and it increases your chances of doing well on Amazon.
I know it can be a bit daunting, but don’t worry; the costs have stayed more or less the same recently. And for those ready to handle the bit of complexity, you can use the data to get even better results than before.
How to Set Up a Sponsored Products Ad on Amazon?
Setting up a Sponsored Products Ad on Amazon might seem difficult, but it’s a lot easier than you might think!
Here’s a step-by-step guide to get you started:
Preparation
- Gather your Essentials
If you’re planning to advertise your products on our platform, there are a few things you should keep in mind to make the process a little smoother. First off, make sure you have all your product ASINs, high-quality images, and relevant keywords ready to go. That way, you’ll be all set to create your ads when the time comes.
- Choose Your Campaign Type
When it comes to choosing your campaign type, we suggest starting with Automatic Targeting. This option will help you reach a wider audience without much effort on your part. Later on, if you want more control over who sees your ads, you can try out Manual Targeting.
- Set Your Budget
Finally, it’s important to set a budget for your ads. You get to decide how much you’re willing to spend per day or per campaign. And remember, you’ll only pay when someone clicks on your ad, so take some time to figure out what works best for you, and then sit back and watch the clicks roll in!
Campaign Setup
Here’s how to set up an Amazon sponsord products ads campaign:
Step 1
Navigate to “Advertising” in Seller Central.
Step 2
Click “Create Campaign” and choose “Sponsored Products.”
Step 3
- Select your campaign name and targeting type.
- Choose your product(s) or product groups. It’s best to start with 5-10 related products.
- Set your bidding strategy. Automatic is fine for now, but later, you can adjust bids for specific keywords.
Step 4
Optionally, add ad copy. Craft compelling titles and descriptions that highlight your product’s benefits.
Step 5
Review and launch! Check all your settings and hit “Launch Campaign” when you’re ready.
Post-Launch Optimization
Once you have launched your ad campaign, here’s how to optimize it:
- Monitor your Campaign Performance
Track impressions, clicks, conversions, and costs in Seller Central reports.
- Analyze Keyword Performance
Identify keywords driving clicks and sales and adjust bids accordingly.
- Refine your Targeting
Optimize your product groups and target relevant shopper demographics or product categories.
- Test and Experiment
Try different keyword match types, bidding strategies, and ad copy to find what works best.
We know this whole Amazon sponsored products ad, and setting up the campaign seems pretty overwhelming at first glance. But, believe me, it’s not that difficult once you get the gist of how it works.
But, if you still think that all this is too much to handle, you can always avail the services of an Amazon advertising agency, like Impact Wolves!
Impact Wolves: Your Amazon Sales Pack
If you are wondering how to excel in the Amazon marketplace, look no further than Impact Wolves, the perfect partner to help you devour the competition and skyrocket your sales!
They take a personalized approach to every client, just like a seasoned hunter in the Amazon jungle. With their expert guidance, targeted ads, and data-driven insights, they can propel your Amazon store to the top of the food chain.
Our Services
Here are some of the services offered by Impact Wolves:
Campaign Management
- Amazon PPC Management
Tailored strategies for Sponsored Products, Sponsored Brands, and Display Ads.
- Campaign Optimization
Continuously refine targeting, bids, and budgets for maximum ROI.
- Reporting and Analytics
Provide data-driven insights to track progress and measure success.
Growth Strategies
- Amazon Product Launch Strategy
Optimize your listing and launch for explosive sales growth.
- Keyword Research and Targeting
Identify profitable keywords to reach the right audience.
- Negative Keyword Targeting
Eliminate irrelevant searches and reduce wasted ad spend.
- Amazon Brand Management
Build a strong brand presence on Amazon.
So, why settle for scraps when you can have a feast of profits?
Join the pack and let Impact Wolves help you succeed! Talk to an Amazon PPC expert now!
