Amazon Sponsored Display Ads – Complete Guide for 2023

Amazon Sponsored Display Ads – Complete Guide for 2023
Rashna Shrestha |
amazon sponsored display ads

Amazon offers a unique remarketing advertisement tool ‘Sponsored Display Ads’ which gives you control over who or what your ad is targeting and where your ad can appear. Sponsored Display provides you with a self-service display advertising solution that can be accessed through the advertising console or Seller Central. A sponsored Display ad helps you to reach relevant audiences and grow your business and brand on Amazon by engaging shoppers across the purchase journey in channels on and off the Amazon marketplace.

However, it is not being run by a lot of advertisers yet because many are not sure how it works and how to use it. That is why we have created this comprehensive guide to Sponsored Display Ads on Amazon. We will be covering the following questions and topics:

What are Sponsored Display Ads on Amazon?

Amazon Sponsored Display ads are a way to retarget and re-engage shoppers to your listing with auto-generated, product-focused ads on Amazon and third-party websites. It is helpful for all the advertisers that sell on Amazon who is registered with Amazon Brand Registry. It provides those sellers with powerful ad placements on the Amazon home page, product detail pages, shopping result pages, third-party websites, and apps. Amazon Sponsored Display Ads appear on desktops, mobiles, and the Amazon app.

Where do Sponsored Display Ads appear?

Sponsored Display ads can appear both on and off Amazon. Amazon Display ads appear on the Amazon home page, search result pages, product detail pages on desktop, mobile depending on the display ad targeting option you choose, as well as third-party websites and apps owned or partnered with Amazon. Display ads appearing on Amazon can be also be seen on Customer Review Pages and Top of Offer Listing Pages.

sponsored display ads appearance

How do I set it up?

You need to register your brand with Amazon Brand Registry to be able to run Sponsored Display ads. Once that is set up you can create and run this type of ad by following these simple steps:

  • Step 1: Log in to your Seller Central account and click on “Campaign Manager” under the Advertising tab.
  • Step 2:  Click “Create Campaign”
  • Step 3: Click on “Sponsored Display” under “Choose your campaign type.”

Sponsored display ads campaign type

  • Step 4: Create the settings for your campaign. Enter in your campaign name, date range, daily budget, and ad group name.
  • Step 5: Choose your targeting option. You can choose between “Audiences” and “Product Targeting.” Your options for audiences include “Views”, “Searches”, and “Purchases.”
  • Step 6: Select the products you want to advertise (via the product name or ASIN) and set your per-click bid. Amazon automatically generates the ad creatives for your campaigns based on the targeting type. Next, you decide where you want your ads to be displayed on Amazon. Amazon will show you how your ad would look like before launching it.
  • Step 7: Preview your Sponsored Display Ad and then submit the campaign.

How does it work?

Amazon Display Ads are retail aware, which means they only show up when your products are in stock and the ‘Featured Offer’. Once the products are out of stock or not the Featured Offer, the ads will automatically stop. These ads use Amazon’s audience demographics data to target shoppers in the market based on their shopping behavior. The audiences are created automatically based on Amazon shopping insights. Sponsored display ads allow you to show your ad to consumers who have previously viewed your product or similar products, used search terms relevant to your product categories, or purchased from you.

The billing model for sponsored display ads is a cost per click (CPC). That means you only pay for an ad when a potential customer clicks on your display ad.  You can control how much to spend by setting up your daily ad budget and bid per click. The highest bidder wins and pays the highest CPC, but it may not be their bid amount. The bid they pay is only $0.01 more than the 2nd highest bidder.

Sponsored Display Ads Targeting Options

Sponsored Display Ads offers two general targeting options for 3P (seller central) sellers and one additional targeting option if you are a 1P (vendor central) seller.

Sponsored Display Ads Targeting Options

Let’s delve deeper into each of these options.

  1. Product/Category Targeting

According to Amazon, the product targeting option available to both sellers and vendors allows brands to promote product discovery, measure campaigns more effectively by targeting specific products or relevant product categories on Amazon, and gain greater vision into campaign optimization.

Amazon Product Ads Targeting helps sellers to reach customers and promote the product among audiences who actively browse your products. It also allows you to target those who search for similar products pages and categories. This is a great option if you know your product is of higher quality, you offer a better price, or your brand credibility (reviews and ratings) is better. The reason is that product-targeted sponsored display ads will appear alongside similar product/category ads on the product detail pages, customer reviews, search results pages, or under the featured offer.

  1. Audiences: Views Remarketing

With views remarketing your product ads are shown to those potential customers who have viewed specific product detail pages in the past 30 days but haven’t purchased the advertised products. You have a much higher chance of converting a shopper that has previously viewed/clicked your product. According to InvespCRO, retargeted ads have a 70% higher conversion impact on visitors.

Advertisers are charged on a CPC basis so, unless the ad is clicked there is no charge.

  1. Audiences: Interests (Only available for Vendors)

Amazon will show your ads to shoppers who have shown interest in related products or categories. This ad type can increase awareness of your brand by introducing your products to new audiences who could be interested in your products. This means Amazon will check customers’ browsing histories and purchase histories and target the product ads that coincide with those interests.

What are the benefits of Sponsored Display Ads?

Advertisers can use Sponsored Display ads as a fast and flexible way to advertise their products and brands.

According to Amazon, only 4% of shoppers convert to purchase immediately.

With views remarketing, Sponsored Display ads enable you to reengage the remaining 96% of the audience.

They are an effective advertising strategy to retarget and reintroduce your products and brands to shoppers and increase sales. Additional benefits of Sponsored Display ads are:

  • You can reach a relevant and wider audience in less time, allowing your business to scale and grow faster.
  • Sellers only pay when customers click on your ads so, sellers can control how much to spend by setting bids and a daily budget.
  • It allows sellers to select placement for ads accurately and target based on shopper interests.
  • You can boost reach for new product listing by increasing brand awareness in your category and elevate your product by placing your best products under your competitor’s listing.
  • It assists in tracking the performance of ad campaigns and brings traffic to a product’s detail page.
  • As mentioned above, it enables you to retarget/reengage customers that have previously viewed/clicked but now purchased your products.

Retargeting reduces cart abandonment by 5% and the ads are 3 times more likely to be clicked by retargets customers than new ones.

What are some of the best practices to optimize your Sponsored Display Ads?

Here are a few points to remember in order to optimize your sponsored display ads and gain an edge over the competition:

  • In most cases, bidding for Amazon Sponsored Display Ads is dynamic so you need to use campaign metrics when making bidding decisions and determining your bids on your Sponsored Display campaigns. Monitor and adjust your bids to ensure you are hitting your target Advertising Cost of Sales (ACoS) to keep your costs under control.
  • You can add all your products to the campaign then organize and track your campaigns regularly to keep on balancing potential impressions.
  • Always try to select your best selling or highest profit margin products against your competitor’s product highlighting the features of your product if you have selected the product targeting option.
  • A good way to optimize your ACoS is to just take one ASIN and create a campaign targeting your competitor’s ASIN. This way you can test out variations and learn with minimal cost. Once you figure out a working formula, you can add more ASINs and more campaigns.
  • Sponsored Display ads work best for shoppers lower in the sales funnels. These are shoppers that have a higher purchase intent so, select your keywords and products accordingly.

In Summary

Amazon Sponsored Display Ads is a great advertising tool that offers advertisers the opportunity to hyper-target ads on Amazon as well as third-party sites. It is excellent for remarketing to targeted audiences to drastically increase your sales and conversion. Getting started with Amazon’s Sponsored display ads is simple but optimizing it to get the best ROI is anything but simple. Our Marketplace Intelligence Solution is able to monitor, track, and provide detailed reports on your campaign performances. These insights give you a competitive edge to maximize your CPC with minimum Ad spend.