A Quick Guide to Amazon Sponsored Product Ads

August 20, 2021
| READ 14 MIN
A Quick Guide to Amazon Sponsored Product Ads Download PDF
amazon sponsored product ads feature image

Amazon’s impression in the digital world is picking up through Amazon’s various ad products. Amazon Advertising has become crucial to the success of e-commerce businesses. But with everchanging changes and updates on sponsored Ads on Amazon, brands need to know what tools they have on Amazon to help them grow. Amazon offers three different types of sponsored advertising solutions: sponsored display ads, sponsored brand ads, and sponsored product ads. Each of these options allows advertisers to choose and optimize their ad campaigns that fit the business.

In this article, we will walk you through everything you need to know about Sponsored Product Ads on Amazon so you can get started (if you are new) or optimize your current campaigns (if you are already running this type of ad).

 

What are Amazon Sponsored Product Ads?

Sponsored Product Ads are a type of Amazon pay-per-click (PPC) advertising solution designed to promote individual product listings on Amazon. They are keyword or product targeted ads that look very similar to organic search results and link to the product detail page. It can help you increase visibility and sales of your desired product listing on Amazon search results by displaying ads. It helps to drive traffic to your product listings by targeting and reaching high-intent and qualified shoppers who are actively looking for products like yours.

Sponsored Product ads are the most common and effective type of Amazon PPC ads. Per JungleScout, it is utilized by 66% of third-party sellers.

Amazon sellers distribution of PPC ads

How does it work?

You can select the products you want to advertise, the keywords you want to target and decide how much you want to spend per click on each target. Since it is a PPC (pay-per-click), you only get charged when a shopper clicks on your ad.

Where do Amazon Sponsored Product Ads appear?

Sponsored Products ads are hard to miss on Amazon as they closely resemble organic listing results and may appear at the top of the search results page, to the right, at the bottom, mixed among organic listings further down the page, and even on your competitors’ product detail pages on both desktop and mobile devices.

Since Sponsored Product Ads appear in so many places, they’re extremely valuable to sellers. Sponsored Products Ads are very competitive, and you must be a professional seller or vendor as your ads will only appear if your product is eligible for winning the Amazon buy box.

Look at GrowByData Complete Guide on Winning the Amazon Buy Box in 2021

sponsored products on desktops and mobile

How can advertisers use sponsored product ads?

You do not need to be brand registered to use Sponsored Product Ads unlike Sponsored Brands or Sponsored Display ads. It is why they are the most used and most effective form of advertising on Amazon. Sponsored Products are available for professional sellers, vendors, agencies, brand owners, manufacturers to quickly create ads for their buy box eligible listings. Products must be in one or more eligible categories and be eligible for the Featured Offer in order to advertise.

Sponsored Products can help increase the visibility of your products on Amazon no matter your level of advertising experience. The ad creative is automatically generated for you, and with automatic targeting, Amazon will match your ads to shopping queries and products which means you can create and launch a campaign in just a few minutes making it great for new advertisers on Amazon.

Since you can choose your own budget, bids, and targeting, Sponsored Products can be used by advertisers of any size for a wide variety of goals, such as

  • generating awareness of a new product,
  • promoting seasonal items,
  • clearing excess inventory,
  • showcasing a best-selling item, etc.

How to set up Amazon Sponsored Product Ads campaign?

As mentioned above, unlike the other ad types, sponsored product ads do not require brands to be registered with Amazon Brand Registry. You can easily set up a campaign by following these simple steps:

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

Amazon sponsored ads campaign options

  • Step 4: Create the settings for your campaign. Enter your campaign name, start and end dates, daily budget, and targeting Option (Automatic or Manual).
  • Step 5: Create an ad group for your products. Then choose the products you want to advertise.
  • Step 6: Choose the targeting type between product or keyword.

keyword and product targeting

  • Step 7: Adjust your bids for each of the keywords or products (depending on the targeting option you chose).
  • Step 8: Previews what your ads may look like on various devices and pages, and then Launch the campaign.

Targeting Options for Sponsored Product Ads

As mentioned above, Sponsored Products have two targeting options:

  • Automatic Targeting
  • Manual Targeting

manual and automatic targeting

Automatic Targeting

This is a great option for new sellers on Amazon. It takes very little time and effort to set it up. All you need to do is name your campaign and define a cost per click (CPC) bid as well as a daily budget. Once this is done, Amazon does the rest. This option gives all the control to Amazon. They will choose the keywords and products to target that are similar to the products in your ad listings.

As a new seller, this will help you understand what keywords your products are showing upon. It can tell you which products are most popular. Learning this over time allows you to eventually transition into manual targeting and optimize it based on your knowledge and performance records from the automatic targeting.

Manual Targeting

You have a lot more autonomy and control of your campaign with this option. This targeting option allows you to choose to target shoppers based on keywords or products. So, let’s go over each of the options.

Keywords Targeting – This allows you to choose your own set of keywords to target. You may need to do extensive keyword research to come up with specific sets of keywords for this option. Once you have a list, you can customize your bid for each of the keywords.

Product Targeting – With this option, you can target, specific products, brands, or categories. This option displays your ads on the targeted product pages and on the targeted categories. This option also allows you to define your daily and CPC bids for each product.

Note: You also have the option to target both keywords and products as well by creating two different manual campaigns.

Benefits of Sponsored Product Ads

If you are a seller on Amazon and you want to increase your product sales, then you may want to use Sponsored product ads. Below are some of its benefits:

  • According to Amazon’s own data, 70% of Amazon customers never click past the first page of the search result. Sponsored product ads help to improve your brand visibility by getting your listings on the first page of search results with highly relevant ads. This can also improve your product clicks and sales as well.

teddy bear example sponsored products ads

  • Creating sponsored products ads is easy and does not require any previous advertising experience.
  • There are no monthly fees. You pay only when shoppers click your ad.
  • With Amazon sponsored products, you can deliver highly relevant ads to targeted customer searches.
  • As a brand owner, you can use sponsored products ads to promote a new brand or product line you have just launched, promote new product variations such as additional models, colors, or sizes, or seasonal items.
  • It helps to keep track of a variety of sales and performance metrics that allow you to measure the direct impact of advertising on your business on Amazon and optimize your campaigns.

Strategies and Optimization Ideas for Sponsored Products

As more and more sellers start their business on Amazon it is best to use strategies that will help you rise above them all and keep you ahead of your competitors. Here are some points to remember to optimize your sponsored product ads when creating your campaigns:

  • Start your first campaign with automatic targeting, allowing Amazon to display your ad in relevant customer searches automatically. It’s a quick and easy way to learn how shoppers are discovering your ads as you can download reports to review which customer search terms are working best for you.
  • Adopt an always-on advertising approach and run your campaigns continuously without an end date to maximize the impact of sponsored products. It ensures you don’t miss out on impressions, clicks, or sales.

According to Amazon’s own data, 70% of Amazon customers never click past the first page of the search result.

  • Amazon provides suggested bids based on recent data for ads like yours that won the auction. Using the suggested bid helps you increase your chances of winning an auction resulting in more impressions, clicks, and sales. Do not bid more than you are willing to pay for a click on your ad.
  • There is no limit to the number of ad campaigns you can create so if you want to run multiple campaigns to advertise different product groups from your catalog you can do that. The more campaigns you run the more opportunity you have to learn what helps you drive the most sales.
  • While selecting products to include in your campaign, choose products that have a strong rating as well as accurate and updated product detail pages.
  • You should be downloading reports once a week so you can keep a close eye on performance and adjust when necessary.
  • It is important to log into your campaign manager around major shopping days to track your campaigns and keep them from going out of budget.
  • Make sure the keywords you are bidding on are relevant to the products you want to advertise. You can also turn on bid+, optimizing your bids for the top of search results when they are most likely to lead to sales and conversions.

Summary

As more sellers enter the Amazon marketplace, search results competition will likely dramatically increase over the next few years. It has become extremely crucial for sellers to outsmart their competitors using paid advertising campaigns mainly due to the increase in competition.

If you have too many products, keywords, and campaigns to track and manage you may need some external resource or tool like GrowByData Marketplace Intelligence – to help ease your burden, to help you complete more things in less time. We can help your brand develop customized ad campaign strategies that are optimized to your advertising goals to increase your visibility, conversions, and sales on Amazon.

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GrowByData Content Team

Team of Data Analyst, Business Analyst, and Project Managers with years of experience in data analysis and online retail industry

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