How to Advertise on Amazon. A Guide to Ad Types & Strategy
This guide will inspire you, whether you are new to Amazon Advertising.
Amazon reported in Q1 2021 that its “Other”, which is primarily Amazon advertising revenue, increased by 73% over Q1 2020. This suggests that either more sellers invest in Amazon advertising or existing advertisers have larger budgets, or both.
This is not surprising as Amazon is becoming more competitive. Marketplace Pulse reports that Amazon adds on average 3,500 sellers per day.
To be successful on Amazon, brands must have a strategy for sponsored ads. Advertising should be viewed by brands in the same manner as inventory management and listing optimization. It’s essential for Amazon’s continued growth.
How Does Amazon Advertising Work?
Amazon Ads Use Pay-per-Click
Amazon uses a pay per click (PPC) model to advertise most of its ad types. Although cost-per-click is sometimes referred to this model, they essentially mean the same thing. Advertisers are only charged when an ad clicks. You are not charged if your ad isn’t clicked by anyone if it appears on search results pages. Pretty great, huh?
How does Amazon choose which ads appear in search results? This leads us to bidding.
Amazon Ads Use an Auction Model
Amazon uses an auction model. This requires sellers to compete against each other to place their ads. A seller can only run Amazon ads for a product if they have a bid and keywords. This is often the most difficult concept to understand when advertising on Amazon.
The bid is the maximum amount a seller will pay per click on an ad. The keywords determine when the ad will be included in the auction. This can be described as “I am willing spend up to [bid] to have my ad populate when a customer enters a search term containing [keyword] or [keyphrase].”
Keywords become more complex when you consider manual campaigns that have three match types as well as automatic campaigns. But that’s another conversation that also focuses on campaign architecture.
Amazon considers many factors when deciding who wins an auction. These include product rank, customer reviews, product ratings, customer reviews and if the product is fast shipping. Although the bid amount is an important part of the equation it is not the only one.
Bid Optimization and Search Term Optimization
You may have thought, “Why don’t you set insanely high bids so you always win the auction?” This could lead to a loss of a month’s advertising budget. You also run the risk of placing ads in front unqualified shoppers so it’s not worth the cost.
It is best to have a competitive bid set for long-tail, specific search terms, and lower, but more competitive, bids set for broad, generic terms.
This brings us to the last point: Amazon advertising is not a “set-it and forget-it” platform. Amazon is an ever-changing marketplace. You need to adjust your bids and search terms several times per week in order to maximize your advertising profit. This is why Amazon has so many advertising agencies and software.
Amazon Ad Types
Amazon Sponsored Product Ads
Amazon’s most popular and highest-converting ad types are Sponsored Products Ads. These ads are integrated into the search results page and differentiated by the text “Sponsored”. There are many Sponsored Product placements on each page so you have a good chance of winning the auction.
Sponsored product ads are a great option if you have a small budget. We saw an increase in Amazon sales of 40% after deploying Sponsored Products Ads.
Watch the below video to know best Amazon Sponsored Product Ad Strategies to Boost Your Sales in 2021
Amazon Sponsored Brand Ads
Sponsored brand ads are banner ads that appear at top of search results pages. This ad type is one of Amazon’s most popular. Sponsored Brand Ads can only be run by sellers who are enrolled in the Amazon Brand Registry. Send shoppers who click on the ad to your Brand Store.
Sponsored brand ads are great for increasing brand awareness, market share growth, and launching products. You can use two existing products as well as one new product to make it ride on their coattails.
You can use Sponsored brand ads to target keywords that contain your brand name. This will allow shoppers to instantly find you and keywords that include competitor brand names. This will help you steal their customers. Bidding on brand names of competitors will not result in the highest conversion rate. This is because shoppers searching for brand names are more likely have higher intent to purchase from that brand. However, this tactic can still be used to reduce their market share.
Amazon Sponsored Brand Videos
Sponsored brand videos are similar to sponsored brand ads, but they appear halfway down search results pages and include a video. This type of ad is new and very engaging.
Sponsored brand videos are an excellent resource for products that are complex or have a value proposition that is complicated. Amazon is a growing marketplace for video, so if your budget allows you to make videos for Amazon Sponsored brand videos, then you should. Amazon reports that Sponsored brand videos have 55% lower CPCs than Sponsored Ads.
Watch the below video to know Everything you Need to Know About Amazon Sponsored Brand Video Ads
Amazon Sponsored Display Ads
Sponsored Display Ads are a way to retarget shoppers using past shopping history and buying habits. They can be found on Amazon and other sites. Although they have a lower conversion rate than other types of ads, they can be a powerful tool to increase brand awareness.
Sponsored display ads can be a great way to attract shoppers who have previously bought your product or one from a competitor.
Watch the video to know How does Amazon Sponsored Display Ads Benefit you?
How to Advertise on Amazon: Top Strategies
You’re likely wondering what good strategies you should follow now that you have a better understanding of how Amazon advertises. There are four main ad types. But how do you use them together with other Amazon efforts?
Amazon SEO and Amazon ads go together like peanut butter. Amazon’s algorithm looks at the product details page’s title and bullet points. It also considers the product description in order to determine if the product is relevant to a search query. You can significantly increase the chances of your product listing being converted by including keywords in its detail pages and targeting them with Amazon ads.
The Sponsored brand video image above may have indicated that the product also has an Amazon coupon. You can offer shoppers an additional incentive to click and convert by offering a coupon for a product you also have an Amazon ad.
These are only two options of many to integrate your Amazon ad strategy with your larger marketing strategy. However, they are the easiest.
