If you shop or sell on Amazon, you’ve probably come across Amazon Sponsored products at some point. But what exactly are Amazon Sponsored Products? How are they different from regular products? And how do you get started with your own Sponsored Products campaigns?
We’re here to answer all these questions, as well as provide tips and best practices so you can rest assured that you’re on the right track when it comes to advertising on Amazon.
What are Amazon Sponsored Products?
You can have the best product in the world, but no one is going to buy it if they can’t find it.
So how do you stop your items from getting lost in a sea of similar ones?
Well, of course you can tweak your keywords and encourage more positive reviews, but one of the most powerful tools for Amazon sellers to improve discoverability and increase sales is Amazon’s Sponsored Products.
Sponsored Products are image ads that exist within the Amazon Marketplace and serve to drive customers to product pages. They appear in a several different places on Amazon web pages and are very similar in appearance to regular search results. Because they intermingle with search results, they’re very powerful in driving clicks to product pages.
These ads appear right where customers are most likely to see them, including the first page of search results, on product detail pages, and set aside from the search results. This makes them look a little like Google Shopping ads.
How does Amazon advertising work?
We’ll go into more detail on how to get set up in the next section, but to put it simply, Amazon’s Sponsored Products work in a similar way to advertising on Google in that they are based on keywords and bids.
You can either choose to pick your own keywords or let Amazon pick them for you. You can then place bids on the keywords that are relevant to your products. If your bid wins and the ad matches the search terms, your sponsored ad will appear in shoppers’ search results for those keywords. This makes Sponsored Products a great option for making your products more targeted, and ultimately helping to maximise sales.
Sponsored Products operates on a per-click fee basis, so you only pay when a shopper clicks on your ad. When an Amazon shopper clicks on your ad, it takes them directly to an Amazon product detail page where they can buy the product.
Why use Sponsored Products?
They get your products noticed
Using Sponsored Products can make your ads appear on the first page of search results or on product pages. This gives an instant boost in visibility.
Give customers what they want
You can use Sponsored Products to tailor your ads to customer search terms that match your products, so the shoppers who want them can see them (and then buy them!).
Increase your sales
People visit Amazon because they’re ready to buy. Sponsored Products puts your ads in front of people who are looking to put those items in their carts.
Pay only when your ads are clicked
You only pay for the ads if people click on them, so there’s less risk involved than simply paying for an ad that may or may not get clicked. And if people are clicking through to your product, that’s half the job done - then all you have to do is make sure your product page copy does the rest of the work.
Measure ROI and optimise spend
Amazon has campaign reporting which allows you to track your ads' performance, which means you can measure return on investment and adjust your budget accordingly.
Getting Started With Amazon Sponsored Products
Before you get started with your Amazon Sponsored Products, there are a few requirements that need to be met. Here are the key things you need:
- An active seller account on Amazon
- The ability to ship to all United States addresses
- To be selling new products, not used or refurbished
- Active product listings in at least one of the following categories
- Entertainment Collectibles
- Office Products
- Fine Art
- Arts, Crafts and Sewing
- Patio, Lawn and Garden
- Automotive Parts and Accessories
- Grocery and Gourmet Food
- Pet Supplies
- Health and Personal Care
- Home and Kitchen
- Industrial and Scientific
- Sports Collectables
- Phones and Accessories
- Tools and Home Improvement
- Clothing and Accessories
- Toys and Games
- Collectible Coins
- Movies and TV
- Video Games
- Watches Electronics
- Musical Instruments
If you meet these criteria you can start building Amazon Sponsored Product campaigns. There are a few things you need to consider first to make sure you’re running the most efficient and effective campaigns.
1. Which products do you want to advertise?
Will you advertise your entire inventory, selected product lines, or specific individual products? What you decide to do will depend on what kind of seller you are (large or small, reseller or brand), but at the end of the day, Sponsored Products should be a core part of your selling strategy because, let’s face it, if you’re not advertising a product, you could be missing out to your competitors.
2. What are your business goals?
Grouping together products that have similar goals will give you better control over performance. Think about the different objectives, for example a product launch (gain exposure, drive traffic to new products) vs. shifting old stock. You should group your products by category and business objective to drive the most relevant traffic to your listings. You should also think about categorizing ad groups within campaigns by product-specific attributes (e.g. style, colour etc) for better keyword relevancy toward customer search terms.
3. Do you understand how customers organically search for your products?
Use keyword data from the Search Term Report to analyse how customers find your products - you might think customers are searching by colour when they’re actually searching for size, for example. This kind of data and product knowledge will become the framework for your campaigns.
Once you’ve decided which products you want to promote, you can go ahead and click on the “Promote and Advertise” button in your inventory. When prompted to create an ad campaign, choose “Sponsored Products”.
You can now enter your campaign name and set a daily budget goal (this is the maximum amount you plan to spend every day on your ad). You can also choose whether to run your campaign continuously or within a specific date range.
You’ll have two campaign options when setting up your ads within Sponsored Products: Automatic campaigns and manual campaigns.
Automatic campaigns are more popular among Sponsored Product users because they require less maintenance. They are also a popular option among first-time Sponsored Products users who aren’t sure what keywords will work for their ads. This is because Automatic campaigns target ads to all relevant customer search terms. However, because Amazon automatically selects the keywords, bidding is defaulted to the ad group level, so you have a lot less control than with a manual campaign. Automatic campaigns only work properly if the listing’s attributes (title, bullet points etc.) are optimised.
Manual campaigns give you more control than automatic campaigns. This type of campaign lets you add new keywords, select keyword match types, and adjust bids - so when you notice keywords producing a higher return on spend per click, you can increase your bid (or reduce it, if you need to!). Although manual campaigns give you the benefit of control, they can be more costly to manage and maintain than automatic campaigns. However, when done right, these campaigns can be the most rewarding advertising platform for Amazon sellers.
The other option is to do both. If you run both kinds of campaign at the same time, you can get the benefits of both worlds. Start with an automatic campaign for a scattergun approach - have this constantly running as it will collect data over time, and that data can be used to make your manual campaigns more effective. When you’ve identified which customer search terms perform well within your automatic campaign, you can create an identical manual campaign with the same structure and name to exploit high-performing customer search terms and have better control over the bid.
It’s best to keep your automatic campaign running because manual campaigns allow for constant keyword modification, so you can keep using your automatic campaign to add new keywords as search terms evolve over time.
Expert Tip: “One tip would be to put sponsored ads against your newer items or slower moving ones to give them a boost. That said, it’s important that you have the margins to make profitable sales.
You should also aim to monitor the progress of your sponsored ads daily and make small tweaks as and when you can. When it comes to identifying the best keywords for your ads, the use of a tool such as KeywordTool.io can really help.
Finally, know your limit and experiment within your bids”. Darren Ratcliffe, Founder of Digitl Agency
The default bid you set for ad groups and keywords should be reflect how much you plan to spend. Try starting low and adjusting over time to find the optimal bid for your product (as we mentioned above). For manual campaigns, look at individual keywords instead of giving all keywords the same bid.
The best bid for keywords depends on your strategy. Remember that setting a high bid to try and get on the first page of search results isn’t always the best tactic and can hurt conversion rates and sales rank over the long term if your product is not competitive.
It may be a better strategy to try ranking somewhere in the first five pages, meaning your bid price can be set lower. Not sure what to set your initial default bids at? Start low and adjust accordingly once you’ve collected some data.
Expert Tip: "Be patient. Too many people make rash decisions to stop ads or increase/decrease spend at the drop of a hat. Sponsored ads should be part of a longer-term strategy and therefore need to be given enough time to have effect. From my experience, set a budget slightly larger than you initially wanted to consider and then make adjustments on a fortnightly or monthly basis". Chris Buckley, Founder of Baby Casts & Prints
We glossed over them earlier, but it’s worth taking another quick look at budgets. Your campaign’s daily budget should reflect how much you want your average daily spend to be over a calendar month. This means you should translate your monthly/quarterly/campaign-specific budget to a daily figure to ensure it covers the number of products you want to advertise as well as your default bids.
You should also think about the number of products you want to advertise - for example, if your campaign has 500 products and your daily budget is £5, it will take a long time to see clicks for all the products you’re advertising.
Make sure your daily budget accounts for the amount of products in the campaign so you can generate enough performance data to review your campaign’s performance and optimise it more quickly.
Beware of default bids! Think about how bids will impact your daily budget - if you want to maximise the chances of your products appearing in search results (and getting those sought-after clicks) then set budgets and bids according to the number of clicks you want to receive.
You’ll want to decide whether to set an account level budget or campaign level budget. For sellers with a tight budget, setting a daily budget on an account level can ensure that your preferred daily spend isn’t exceeded.
However, when your spend for the day reaches that threshold, all your Sponsored Product ads stop running for that day. This can curb sales and growth, so we would recommend setting a campaign level budget. This way, when a campaign runs out of budget, only ads within that campaign will stop running and your other campaigns won’t be affected by campaign specific budgets.
Keywords are the backbone of Sponsored Products.
Although keywords are one of the key drivers in your campaign’s success, they’re only used in manual campaigns. They generally describe the products within the ad groups. Keep in mind that manual campaigns can only run if there are keywords present, so you should add high-performing search terms as keywords with refined match types so you can stay competitive in the marketplace.
To learn more about identifying keywords to use in your product titles, have a read of our Amazon SEO guide.
There are three different match types when it comes to keywords:
- Broad offers the widest range of campaign exposure as it matches with similar customer search terms.
- Phrase must contain the exact sequence of words, making it more restrictive than broad match types.
- Exact match is self-explanatory. The keyword sequence must be an exact match.
Expert Tip: "Make sure your target keywords are actually in your product listings. Amazon looks for relevance, so give your descriptions a thorough check". Chris Buckley, Founder of Baby Casts & Prints
Optimising Your Campaigns
Now that you know how to setup your Sponsored Products campaigns, it’s time to optimise them so you get the most out of Amazon’s advertising capabilities. Let’s look at a few things you can do to maximise your efforts.
Be consistent with your campaigns
Your campaign structure will provide you with a set of characteristics that follow one of the organisational methods below:
- By top sellers
- By product category (e.g. men's clothes, art supplies, electronics etc.)
- By brand (e.g. Ralph Lauren, French Connection etc.)
Being consistent with your sponsored campaign structure, whatever method you use, is important because it helps avoid repetition - and wasting money as a result.
Remove products that aren't performing well
Once you start using Amazon advertising you'll gather data to determine which keywords and products perform well and which ones don’t. Once you identify the products that aren’t selling, you should remove these from your ad group so that your keywords and campaign budget can be spent more effectively (i.e. on products that convert).
Track and optimise CPC's
Tracking keyword performance for your campaigns can help optimise your CPC and determine if there needs to be an adjustment. You should track your keywords’ progress for at least a week or two before adjusting your prices.
Negative keywords are just as important as popular keywords. If these keywords fly under the radar, and if you don’t use them, you risk draining your ad spend on under-performing terms.
Negative keywords are used to prevent your ad from being triggered certain words or phrases.
Your ads aren’t shown to users who search for those words/phrases - e.g., when you add "free" as a negative keyword, your ad won’t show up in any searches containing the term "free".
Identifying negative keywords helps you target specific audiences and improve the performance of your Sponsored Products Campaigns. Try using negative keywords and you might start seeing a higher ROI.
So there you have it - you now have all the information you need to get started with your Amazon Sponsored Products campaigns plus some tips for optimising them. The key thing to remember is to monitor them over time and adjust your campaigns once you’ve collected some data so you can get the most out of Amazon’s advertising capabilities.
For even more expert tips and guidance on how to increase sales on Amazon and grow your business on the marketplace, make sure you read this.