Why should I advertise on Amazon?
Well, if you don’t, then you are leaving money on the table.
Amazon’s US e-commerce dominance accounts for 40.4% of all online retail sales, which is about 5 to 6 times more than its close second rival, Walmart.
According to Statista.com, Amazon tracks having about 310 million active customers worldwide – about as many as the US population to date. Ninety million of these are Amazon Prime members spending around $1300 on average annually.
And even the pandemic did not stop its growth. In fact, Amazon saw a 22% boost in net sales for 2021.
That said, Amazon is obviously a bustling, high-traffic platform. Another statistic shows that about three-quarters of Americans have already purchased something from the marketplace.
Those are just some of the facts that can tell you about the breadth and depth of Amazon when it comes to customer reach, engagement, and satisfaction.
And as a small to medium sized business owner, your opportunities from Amazon for visibility and sales are tremendous at this scale.
Thus, advertising on the platform is one of the best marketing strategies you can take advantage of today.
Running successful advertisements on Amazon like PPC ads and DSP campaigns will result in improved brand awareness and increased customer reach, which will eventually lead to more sales – one of the ultimate goals of any entrepreneur.
Do you want to know more about how Amazon can help your target customers reach you? Read on to learn more about how Amazon advertising works and how Signalytics can help you discover which ad type is the best for your product or business.
What Is Amazon Advertising?
Amazon is an e-commerce platform where there is an atmosphere of strong buyer intent and seller credibility. And as a seller, you should definitely benefit from that.
Amazon Advertising provides both Amazon and non-Amazon sellers (through DSP) an opportunity to take advantage of its energetic marketplace. That is, by helping your business or product to be visible where customers are actively looking at products to buy.
Now, the best thing about Amazon Advertising is that it specifically caters to the environment and behavior inside the platform.
For Amazon sellers, different types of campaigns allow you to buy ads and pay for them per click. Compared with impressions, clicks are generally more cost-efficient since they already signify strong buying intent. Therefore, the conversion rate is higher.
Meanwhile, for non-Amazon sellers, some campaigns allow you to advertise on the platform and take advantage of its reach.
Amazon Advertising provides you with vast opportunities to reach your customers and grow your business. It is a full-funnel strategy and a must-have for every business that sells in the e-commerce space.
How Do Amazon Ads Work?
Amazon reserves the most optimal spaces in search results pages and other promoted areas for ads. These spots will show your Amazon ad to hopefully entice customers to check out the product you are offering or to know more about your business.
These coveted spaces include the top of the search, above, in-between, or below the search results, at the sides of the pages, and near the buy box on other listings. These are all reserved for paid ads.
You can easily spot paid ads on the search results page by looking for the tiny “Sponsored” text mentioned below the listing.
Now, these spaces are offered following an auction-type advertising model called pay-per-click. Amazon auctions off these spaces by allowing advertisers to bid for keywords that are relevant to every search query so they will show at the most suitable advertising space that will maximize their ad’s conversion rate.
Advertisers pay the platform for every click their ad gets. Sellers or advertisers pay for clicks instead of impressions that conventional advertising provides.
Aside from space on the marketplace platform, DSP allows you to advertise beyond the Amazon website. Demand Side Platform, or DSP, allows you to also buy ad space from affiliate sites of Amazon to expand your customer reach further. Even non-Amazon sellers can take advantage of this.
What are Amazon Ad types?
There are different Amazon ad types you can explore and use to achieve your goals.
Do you want to improve your sales?
Sell-off seasonal items?
Increase brand awareness?
Sustain your rankings?
Get off-Amazon audiences to buy from you?
Aside from choosing the suitable ad type, you can also customize and optimize it continuously to satisfy your goals. You can also combine several ad types, start and pause campaigns as needed, and customize your ad spending.
It is important that you first define your goals clearly. This allows you to have a measurable output. In turn, you’ll use these to compare the results of your ads and decide if they are working or not.
Next, you must also have a good grasp and in-depth understanding of how each Amazon Ad type works. This is so you can maximize its functionality, purpose, and benefits in favor of your business.
There are four major Amazon Ad types that you can work with.
- Sponsored Product
- Sponsored Brand
- Sponsored Display
- Demand Side Platform (DSP)
For this article, we will be focusing on Sponsored Product ads, Sponsored Display ads, and Sponsored Brand ads. Each ad type provides you with opportunities to reach your customers on and offsite. To know each more deeply, read on.
Amazon PPC Ad Types
Amazon PPC shows ads exclusively on the Amazon platform. If you are a seller inside who wants to reach more customers, this is for you.
Though one of the advantages of selling on Amazon is being in the middle of all the action, it can still be challenging to stand out since there is a ton of competition on the platform.
And Amazon intended it to be that way.
Amazon believes that competition will spark ingenuity, which can help revolutionize and direct the future of e-commerce. Sellers pressured by tight competition eventually become more creative in boosting their businesses so that customers will choose them instead.
To help sellers battle it out inside, Amazon curated a strong advertising and marketing system. Aside from running the conventional organic ranking system, you can also boost your listings’ visibility with the help of PPC ads.
Amazon PPC provides you with 3 different ways of advertising your business. You can use your best-selling product, promote your brand or provide an alternative to a more popular yet expensive competitor product, and show your ad off-site Amazon to a wider audience.
There is also various customization that comes with each type, allowing you to fine-tune your ads and reach its target customers faster and more effectively.
This allows you to strategize using continuous optimization depending on the data you gather and insights you discover as you go along.
Sponsored Display Ads
This PPC ad type is the latest addition to the roster of options for Amazon sellers. Instead of using keywords to establish relevancy to a search query, it targets potential customers based on interests and behaviors within the platform, particularly if they have viewed your product listing previously.
From a shopper’s perspective, the Sponsored Displays that show up in their SERPs are those similar products they may have viewed recently or up to 30 days ago. Because mainly, the goal of Sponsored Display ads is to get new customers based on interests or to re-engage undecided shoppers.
Sponsored Display Targeting
Running Sponsored Display ads requires you to choose among three types of targeting options. And each choice comes with a specific goal – whether you want to cross-sell, re-engage, or expand your audience reach.
Product Targeting Ads
As the name suggests, you are looking to show your product to potential customers alongside similar or complementary products in your category.
Your goal is to capture their attention and lead them to click your listing and buy from you instead of the other listings on the same page.
Showing up alongside your competitors can actually be an advantage. Through market research and competitor analysis, you can spot areas to improve on your product so it will stand a chance of beating your competition.
For example, you can improve your product images, bullet points, EBC, or pricing so your listing will look better and more enticing when shown beside your more popular competitor.
You can also expand your strategy by targeting complementary products. If you are selling accessories, you can target main product listings that also benefit from you. If you are selling seasonal decor for example, you can target other items that are also usually being purchased during the same season.
You must be an Amazon vendor or third-party seller enrolled in the Brand Registry for you to participate in Product Targeting ads.
Audiences: Views Remarketing
If you need a workaround for improving your conversion rate, then you can consider creating a Sponsored Display ad using Views Remarketing.
Re-targeting helps you focus on potential customers who haven’t decided yet but with high buying intent, instead of swimming through a broader audience who are just “looking around”.
Your ad will show to shoppers who have viewed your product listing or are looked at similar products under the same category within the past 30 days. This is given that they have not yet purchased your product.
This type of ad can be utilized by vendors and third-party Amazon sellers that are enrolled in the Brand Registry.
Instead of targeting similar or complementary product listings, this type of ad will focus on showing your products based on a shopper’s interests.
Amazon captures shopper behavior like the products he or she viewed or categories checked. These signals can provide an overview of specific interests, which now Amazon uses to identify who could be potential customers of your product and show your ad.
This targeting type can only be utilized by vendors.
Advantages of Amazon Sponsored Display
Many elements come to play to secure that much-coveted sale on Amazon. As a seller, you should guide your potential customers throughout their whole journey on the platform. And Sponsored Displays can actually help you do that.
Here are the 4 phases of every customer journey that Sponsored Display can help tap and turn to your advantage.
Sponsored Display ads can help expose you to more potential customers by increasing brand awareness. This happens because of curated targeting that allows you to optimize various elements influencing your relevancy down to the nuclear level.
While organic ranking strategies remain foundational to authority, paid advertisements can help boost your discovery.
Sponsored Display ads can entice shoppers to check your listing as they are found in prime spots of the SERP.
You can also increase the conversion rate of your listings through listing optimization – the process of putting helpful and informational content, as well as eye-catching creatives and copywriting, into your product listing to entice and educate customers.
Engaging your shoppers and convincing them with a compelling product listing can help you secure more sales.
Studies show that on average, Amazon shoppers take about a week before deciding what to buy. They also tend to compare up to 14 listings before clicking the Buy button.
This is the perfect window to remarket to intentional yet undecided customers.
With the Views Remarketing option, you can target these customers by refreshing their memories telling them, “Hey, you checked me out last time and I’m the best option!”.
Getting loyal customers is a surefire way to sustain your business. And the same thing goes with brand loyalty.
With the help of Sponsored Displays, you can cross-sell to your customer base by offering them your other products. You do product targeting by offering other products relevant to their needs and interests, or to complement the products they already bought from you.
Amazon Sponsored Brands Ads
Instead of showing a single product in search results, you can advertise your brand through Sponsored Brands. The goal here is to introduce your brand, including its message and vision, to create an identity that becomes a foundation of trust and confidence for your buyers.
Sponsored Brands allow you to showcase up to three products in a banner-type ad. Your advantage here is you can show three of your best products instead of just one. It also shows at the top most space in the SERP, making it more visible to shoppers.
Sponsored Brands were previously called “Headline Search Ads”. And with the new name comes another new feature – video ads. It helps make your ads more dynamic when it comes to showcasing what your brand has to offer. Video creatives also increase your ad’s appeal value.
Sponsored Brand Objective
Your brand ad becomes the top of the funnel that leads shoppers to your brand landing page. Here, you can showcase the different products you are offering alongside the brand message you’d like to convey.
There are two elements you need to take care of in your customer journey here – the retention rate and the conversion rate. With the former, you are supposed to engage a customer to check out your other products and buy as many as possible in one go. You also give them an idea that you are a complete shop for their needs at the moment.
Meanwhile, the latter pertains to converting shoppers to buyers. Like with Sponsored Displays, the content of your landing page like your product offerings, its intuitiveness, creativity, information, etc. can help convert the click to purchase.
Amazon Sponsored Product Ads
Considered the most popular among the different PPC ad types, Sponsored Product Ads display your product whenever a relevant query is keyed in the search bar. It may show up first or ahead of more popular products that have more sales.
These ads appear on page of relevant searches but yours is placed in spaces that you have bid for. With the versatility of choosing to modify your bid based on desired placements, Sponsored Product ads are the most cost-effective among the different PPC ad types.
In terms of conversion rate, Sponsored Product ads historically provide the highest, mainly because of how exposed they are. If the goal of your PPC ad is to increase traffic and sales, then you are on the right track with a Sponsored Product ad.
Sponsored Product Targeting
Sponsored Product ads offer two targeting options. Both work around keywords.
For this reason it is important to identify all relevant keywords and their potential variations. Keywords high in relevance, intent, and conversion are best.
Targeting in Sponsored Products is separated by campaign type. And you can choose between Automatic and Manual.
Automatic Versus Manual Campaigns
If you just started with your Amazon journey, or PPC ads, in particular, you can begin with Sponsored Products – Automatic campaign. Automatic campaigns function by allowing Amazon to automatically determine relevant keywords to show your ads for.
These are also great for gathering data, as they’ll show you not only what keywords were chosen for your listing, but also the ad performance (such as impressions, clicks, and sales).
If keyword research is done right, you gain plenty of opportunities to juice up your relevance to shoppers’ search queries looking for your product.
That’s when it’s a good idea to start manual campaigns. In a manual campaign, you decide what keywords to target. You can choose to target them in three different ways:
- Broad – where all words included will be used in any order and including other words in combination.
- Phrase – where the words included are shown only in the order you input them, but other words may be added before or after the phrase.
- Exact – where only the exact words in the exact order you provide are used to show the ad.
You can also set up Negative match, which is where your ads will be excluded from being shown for inputted keywords.
These manual options give a lot of control and versatility when it comes to ad costs. This is a great way to optimize your budget and make your ads more cost-efficient. By manually monitoring the performance of your keywords, you can then know when to add or lower your bids to maximize the opportunities presented to you in the dashboard.
Overall, automatic and manual campaigns work together so you make the most out of your Sponsored Product ads. Use automatic campaigns as your training ground through experimentation and data gathering. Eventually, apply the insights and learnings to your manual campaigns.
Amazon PPC brings in a lot of opportunities for e-commerce sellers to propel their businesses and hasten their growth. Effective utilization of the various ad types it offers is crucial to establishing a sustainable and profitable business in Amazon in the long run.