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The Seller’s Guide to Amazon Sponsored Products
What Are Amazon Sponsored Products?
Amazon Sponsored Products ads are a type of paid search advertising that lets you make your product more visible to potential customers who are actively shopping on Amazon. When people search for products they want to buy, your ad will appear at the top of their results. The product detail page is the only place people can purchase items on Amazon. If you have a Sponsored Product ad that generates clicks to your product detail page, It’s likely that the viewer is interested in your product and will potentially purchase.
In this type of Amazon pay-per-click (PPC) advertising, you can bid for particular keywords to gain maximum exposure in search results on the site. However, just as the name suggests, you have to pay a small fee for every click on your ad.
Unlike other PPC ads, Amazon Sponsored Products look similar to the platform’s organic search results, so customers often don’t realize that they’re being shown ads.
Are Amazon Sponsored Products Worth It?
Waiting for your products to gain user reviews and climb up the ranking takes time, and Amazon Sponsored Products ads offer a shortcut to the first page. 70% of people never look past the first page when they’re shopping on Amazon, so it’s important to set your ads up to rank.
Although all Amazon advertising campaigns yield profitable results for sellers, Sponsored Product ads are a key revenue generator. While sellers also use other forms of advertising to promote, Amazon Sponsored Products ads still make up 76% of overall Amazon ad spend. As the leading performance marketing channel, this type of Amazon advertising campaign allows you to have a higher chance of converting leads into paying customers.
Since Sponsored Products appear in search results and other product pages, you have an opportunity to introduce your product to shoppers who are ready to purchase. With the right strategy and positioning, you can receive a high return on your investment.
If you’re looking for a cost-efficient way to get more clicks, more sales, and more positive reviews, create an Amazon Sponsored Product ad!
How Does It Work Exactly?
Amazon Sponsored Products are advantageous for your brand, especially during high traffic events like Prime Day. However, before you can reap the benefits of Amazon’s PPC model, you must first understand how the process works.
For beginners, one of the first things you need to do before kicking off an ad campaign on Amazon involves:
1. Defining a Set of Targeted Keywords and Products
Simply advertising on Amazon isn’t going to drive your company’s sales. To sell as much as you can, you must target the right people who will consider your products relevant.
By defining the right keywords related to your product, customers who find your ad relevant will be interested in the product you’re promoting, view your product detail page, and eventually add them to their online cart.
This makes it possible for your ad to show up in the results for search terms that are even vaguely related to your product — even if it doesn't include your brand name or any variation of it. You’d be surprised at what we found are our customer’s high-converting keywords after going through our extensive keyword tracking process.
2. Undergoing the Bidding Process
Bidding is how you compete with other sellers and brands for placement in the search results when a shopper searches those keywords. The bid will represent the maximum amount you’re willing to pay for a click on the associated ad, but this doesn’t always pertain to how much you’ll actually pay for each click.
Amazon uses an auction-based bidding system to select and rank your PPC ads. The key to making the most of your ad budget is to bid high enough so that your ad appears above all others — but not so high that you pay too much per click or per sale!
This is where automated Amazon PPC tools can help you make better bidding decisions. Simpliworks customers benefit from daily bid optimization – they don’t have to routinely update their bids themselves, and their campaigns are maximized for sales growth daily.
Targeting Options for Amazon Sponsored Products
In 2019, Amazon launched targeting features for Sponsored Products, which gives advertisers more options to optimize their campaigns. With proper use of these features, you can manage your Amazon Sponsored Products better by having more control over where your ads may appear and how you target your audiences.
To maximize your campaign results, Amazon allows advertisers to choose between different targeting options, which include:
1. Automatic Targeting
Automatic targeting gives Amazon control over the keywords or products your campaign will target. Through automatic targeting, Amazon can match your ads with keywords and products similar to what’s in your ad.
If you plan to use automatic targeting, we recommend performing thorough keyword research before writing your listing so that Amazon selects relevant targets. The default settings can be adjusted to meet specific advertising goals.
Under automatic targeting, you may refine how your ads are targeted using four keyword match types:
- CLOSE MATCH: Your ads will be shown when search terms very closely related to the products your advertising is used.
- LOOSE MATCH: Your ads will appear when shoppers use search terms loosely related to your products.
- SUBSTITUTES: Your ads are shown to shoppers who view products similar to yours but sold by a different brand.
- COMPLEMENTS: Your ads are shown to shoppers who view product detail pages that complement your products.
2. Manual Targeting
With manual targeting, you’ll have greater control over the keywords or products to target. If you already know what keywords your customers use to search for what they need, this targeting option may work better for you.
As for product targeting, you can target competitor ASINs, brands, or other product features. Targeting both keywords and products is also possible—all you have to do is create two different manual campaigns for each targeting option.
Manual campaigns are broken down into three match types:
- BROAD MATCH: Targeted keywords can be in any order, and relevant customer searches contain other words too. This match type is most suited for new campaigns or when you don’t yet know what specific searches your target market would use.
For example the keyword running shoes will match with search terms like shoes for running and buy running shoes but not with shoes for walking.
Since broad match targets a wider range of keywords, you will often generate more clicks but may end up running through your budget much faster than other ad types. The cost may be worth it for some, as it expands your keyword coverage and customer reach.
- PHRASE MATCH: With phrase match, your ad will appear only if the customer includes your target keyword in their search, exactly as you entered it.
For example, the keyword running shoes will match with search terms like discount for running shoes or running shoes for women but not with shoes for running.
Although phrase match requires exact target keywords, the search term may contain non-targeted words before or after the phrase. Unlike broad match, phrase match reaches a much smaller audience, as it targets more specific searches.
- EXACT MATCH: This type of targeting is perhaps the most restrictive of them all, as your ad will only appear when customers enter your precise search term. The search term must be in the same order and not contain other non-targeted words before, after, or within the phrase.
For example the keyword running shoes will match with search terms like running shoes and running shoe but not for words like running shoes for women.
If this seems overwhelming to you, don’t worry! There are tools available to help sellers navigate the targeting process. Expert PPC management tools evaluate your products and make informed targeting decisions to build high-converting campaigns that make the most of your ad budget.
The Art of Bidding
Since a company doesn’t have to be brand registered to use Amazon Sponsored Products ads, they’ve become one of the most used ad types. Unfortunately, this also means that it can be challenging to gain exposure through this method.
Before promoting your goods through Amazon Sponsored Product Ads, you will first have to bid against other sellers. Bidding plays a crucial role in the success — or failure — of your Amazon advertising efforts.
How to Bid Right
No matter how perfect or promising your campaign structure seems, it can still deliver disappointing performance. The key to making the most out of your ads is in bidding the right way.
Bidding for Sponsored Product Ads shouldn’t be a guessing game — it’s a science that involves careful calculation and thorough analysis. When your bids are too low, you’ll lose out on valuable placements. On the other hand, bidding too high leads to too much traffic at too great of a cost.
Aside from keyword and target-level bids, you can also choose between three campaign bidding strategies for Sponsored Products ads. You can set fixed bids or use Amazon’s dynamic bidding options, which allows Amazon to adjust your bids in real time based on the probability to convert.
Dynamic Bids (Down Only)
Amazon will reduce your bid by up to 100% with this bidding strategy if a click is less likely to convert. Through this campaign bidding strategy, you can preserve the integrity of your bid as the maximum cost-per-click is in line with what dollar amount you set for each of your advertising targets. This is recommended for sellers with a strict ad budget.
Dynamic Bids (Up and Down)
Through Up and Down Dynamic Bids, your bid will be raised by up to 100% if a click is more likely to convert and will reduce your bid by the same amount if a click is less likely to convert. For example, if you bid $1.00 and the conversion probability goes up in real time, Amazon will increase your bid up to a maximum of $2.00. We recommend carefully evaluating this strategy’s effectiveness for your needs, as it can increase spend and inefficiencies.
Unlike dynamic bids, Amazon will not adjust your bid based on the likeliness of a conversion. With fixed bids, you won’t have potential cost reductions and efficiency gains, but some advertisers leverage this for new campaigns while Amazon is still gathering data.
Making the Most of Your Ad Budget
For an Amazon seller who has stagnant sales, Amazon Sponsored Products are among the best methods to help you increase your visibility and profits
You don’t have to be an expert in Amazon advertising to make the most of Sponsored Products—you can use Amazon PPC management software to make promotions easier for you. As long as you read our guide and utilize the best methods and tools, you can position your brand to rank in the first spot on Amazon!
Are you having difficulty with managing your Amazon ad campaigns? Then, let Simpliworks make advertising simpler for you. Automated Amazon PPC tools save you time by figuring out the best bidding and targeting strategy for you in a time-saving and cost-efficient way. Maximize your ad budget when you use Sponsored Products with Simpliworks, the only 1-click Amazon PPC management tool that automatically optimizes your campaigns like the leading Amazon advertising agencies.
As your Amazon business grows, so do your responsibilities. It can be difficult to juggle everything and maintain a healthy work-life balance. Simpliworks can alleviate your workload by handling all the nitty-gritty details of your Amazon account. Let us take care of the tedious tasks so you can focus on what's important. Learn more about our account management services for Amazon sellers.