The Essential Guide to Amazon Sponsored Products
So, you’re a seller on Amazon. You sell shoes. (or clothes or kitchenware etc)
You have created a product catalog that people would love to buy. The pricing is competitive.
The shipping is all set. (Fulfilled by Amazon/Fulfilled by Merchant).
You think, “Any moment now, & I will be swamped with orders that I can barely keep up with.” You tell yourself, “I am Ready!”
Days pass by, months pass by and the big orders never came. They have just plateaued. You are desperately hoping to turn this around…
Sounds familiar? Then read on…
You are not alone. Many Amazon sellers go through these exact same feelings. Like you, they also wish to turn this around to ramp up their sales and earn higher profits.
But how? Well, the solution has been staring right at you all the time while you browsed through amazon for products… Amazon Sponsored Products!
What Are Amazon Sponsored Products?
Amazon Sponsored Products is Amazon’s take on Product Based, Pay Per Click (PPC) Product Ads.
They are ads similar to Google Shopping Ads, Bing Shopping Ads and Facebook Dynamic Product Ads.
We have all seen and most probably clicked on these Product Ads at least once.
Here are some examples of Product Ads from Google, Bing and Facebook to refresh your memory:
Each channel has a slightly different take on displaying these ads.
Google shows you these ads on top of the search results. These ads are in a carousel view where each Product card displays the product name, price and the website sponsoring the ad.
Bing shows it’s product ads on the top right side of the screen instead on mixing it with the search results.
Facebook Dynamic Product Ads are displayed in a carousel view. All the products displayed in the carousel are from the same company unlike google which shows you a variety of similar products from different companies.
No matter how these product ads are shown on each platform they are the most successful ad type when it comes to E-Commerce.
However when it comes to product searches Amazon clearly leads the way
(Source: Hubspot)
This is an advantage you should be utilising as an Amazon Seller!
When someone searches for a product in the Amazon search box, the most relevant product listings are shown.
Amazon shows these product listings, sponsored or otherwise, to a customer’s searched term. (also called search query or keyword).
Organic results have:
- An Image
- A Title
- Price & Seller Ratings.
Some listings though, have a small “Sponsored” logo at the top. These are Amazon Sponsored Products.
Amazon Sponsored Products are shown in two different places.
- Search Results Page
- Product Listing Page
Search Results Page
These Ads are shown at the right hand side of Search Results.
Product Page
Amazon Sponsored Products shown on Product Pages are shown below a product description and above user reviews.
Why should you use Amazon Sponsored Products?
Boost Sales for All Your Products
Amazon Sponsored Products gives you an opportunity to have your products listed higher up & ahead of your competitors.
It gives you much higher visibility and increases your chance to get in front of your audience. It’s also a sure way to beat your top performing competitors in organic search.
Seasonality
With the help of Amazon Sponsored Products you can promote specific products for increased searches during Christmas, Hanukkah, Mother’s Day, Valentine’s, etc.
End-of-Season Sale, Black Friday, Cyber monday etc are also a great time to promote your products.
Taking advantage of increased shopping interest during these times can help you boost your sales.
You can also use Amazon Sponsored Products to quickly get rid of inventory at the the end of a season.
New Products
It can be really hard to promote and gain visibility for newly added products. Amazon Sponsored Products provides a quick and effective way to this.
Sponsored Products impact a seller’s overall Marketplace presence by providing an acceleration program for newer products.
Are Amazon Sponsored Products Worth It?
Amazon charges a monthly subscription fee of $39.99 for your Professional selling plan. This is mandatory for Amazon Sponsored Products.
Is the subscription cost plus the CPC costs for ads worth it? Is the ROI justified?
Think of it this way, if you plan to sell fewer than 40 items a month, the Individual plan may be best for you.
There is no monthly subscription fee. Instead, Individuals pay $0.99 per item
However, if you do sell 40 items or more a month the Professional Plan is well worth it. (40 items × $0.99 = $39.66)
As for the Ad costs go, the average CPC on Amazon is substantially low compared to Google, Bing etc.
The low Cost Per Click along with the fact that more than 44% of buyers search for products on Amazon first, this isn’t a opportunity you want to miss out on.
When done properly, Amazon Sponsored Products give great ROI and are well worth it.
Categories Eligible for Amazon Sponsored Products
Here is an extensive list of Categories Eligible for Amazon Sponsored Products
Pricing
How much does it cost?
Amazon Sponsored Ads and Headline Search Ads use a cost-per-click, auction-based pricing model.
You set the maximum amount that you are willing to pay when a shopper clicks your ad. The more competitive your bid is, the more likely it is that your ad will be displayed.
Note: The cost of advertising on Amazon is relatively cheap in comparison to other ad services like Google AdWords or Facebook Ads.
Below are the average winning CPC bids by category on Sponsored Products from April 2012 to July 2016 from CPC Strategy
How Do I Pay for My Ads?
When you advertise, Amazon charges for the number of clicks you receive on your ads.
Your seller invoice will indicate that charges are for the cost of advertising.
You can find these charges in the Selling Fees section of your invoice.
By default, your advertising fees are deducted from your selling account balance.
The total advertising fee is deducted from your seller account during an invoice period.
In the event that your seller account does not have enough funds to cover the cost of advertising, the remaining balance will be charged to the credit card you used to register for Selling on Amazon.
If Amazon can not charge your credit card after multiple attempts, your advertising account will be placed into payment failure.
You do have the option to switch your payment method to deduct from a credit card.
Each time your credit card is charged, you receive an invoice.
The invoice date is your monthly invoice date, or the date when your credit level changes.
Your Credit Card is Charged When:
You accumulate your first $1.00 worth of clicks. (This transaction is used for validation of your credit card.)
More on pricing related FAQ’s can be found on Amazon here.
How Does The Daily Budget Work?
You set a maximum daily amount that you are willing to spend on your ads.
For Sponsored Products, the amount you enter is the average daily amount you are willing to spend over a calendar month.
For example, if you set your daily budget at $100, you may receive up to $3,100 worth of clicks in that calendar month (assuming a full 31-day month).
How To Get Started with Amazon Sponsored Products?
It is not so difficult to get started with Amazon Sponsored Products. But if you want to maximize & optimize the performance of your Sponsored Product Campaigns, you need to develop certain expertise in Performance Marketing [or tie up with someone who already has it (e.g. OnlineSales.ai)]
Step 1: Upgrade to a Professional Seller Account.
- Go to your Seller Account.
- Under the Settings heading, click the “Account Info” link.
- On the Seller Account Information page, go to the Selling Plan section and click the “Modify Plan” button.
- On the next page, click the “Upgrade” button.
- Review the information on the next page and click the “Proceed to Upgrade” button to accept the terms and switch your plan.
After clicking the “Proceed to Upgrade” button, you will be returned to your Seller Account Information page and see a message indicating that the upgrade process has begun.
Your subscription to the new selling plan will begin immediately, and additional links to Professional seller tools will appear on your Seller Account page.
Some billing features may take up to 30 minutes to become effective.
After you upgrade to a Professional Seller Account, Amazon no longer charges 0.99 cents per item sold via ads.
Step 2: Define your Marketing Campaign Goals
A Marketing Campaign is a set of marketing objectives, run for a specific period of time — one-time or recurring at a certain budget.
Example: You may want to sell Romantic gifts, chocolates & toys for Valentine’s Day or You want to clear your last year’s iPhone 7 stock now that the new iPhones are launched.
Decide whether you are willing to spend $1000 for this as long as it generates Sales worth $5000 or more.
You can set-up your Sponsored Product Campaigns in SellerCentral > Advertising > Campaign Manager.
Give your campaign a name, a daily budget, start & end dates.
Step 3: Create an Ad Group
An Adgroup is a group of products that you want to market and keywords that these products should show up for.
Your Ad Group name usually describes the products you will select below.
Consider grouping products that fall within the same category or price point.
You can create more ad groups after you save this campaign.
Step 4: Choose The Products You Want To Advertise
Now that your goals are defined, select which products you want to market. It could be specific products.
Example: iPhone 7, 7s or product categories or all the smartphones in your catalog.
Within the Campaign Manager you will have to select each & every product that you want to market.
Step 5: Add keywords to match these products
Now we come to the business end of the story. Keywords are what people search on amazon when they are looking for certain products.
Example: “Red t-shirts”, “iPhone 7”, “Purple handbag”.
This is where Amazon Sponsored Products Ads differs from Google Shopping & Bing Shopping.
While Google & Bing Shopping campaigns rely on your product feed to match a customer’s search query to a specific product in your product catalog, Amazon Sponsored Products give that control and flexibility to you.
You can choose which keywords match which products and which keywords should not be matched (negative keywords).
Now give a bid to each keyword. A bid is a maximum $ amount you are willing to pay when someone clicks on your ad.
This is also called PPC (Pay Per Click) bid.
If your ad is shown, but no-one clicks on it, you won’t be charged.
Match Types
There Are 3 Match Types You Should Know:
- Broad Match
- Phrase Match
- Exact Match
Broad Match
This Match Type allows your ad to show when someone searches for that keyword or a variation of it.
The broad match keyword “bicycle bell” can cause your ad to show if someone searches for variations like “bicycle bells,” “buy a bell for a bicycle,” and “bell reviews for bikes.”
This keyword allows you to reach the maximum number people.
However, it usually reduces your conversion rate as your ad will be shown for any related keyword for “bicycle bell”.
This match is best used initially to identify and analyse what people are searching. You can then determine which keywords you’d want to include.
Phrase Match
Phrase match setting allows shows your ad only when the search includes the exact phrase of your keyword or close variations of the exact phrase of your keyword.
Your Ads are also shown with additional words before or after the given keyword
For example, when you add “bicycle bell” as a phrase match keyword, your ad only shows when someone’s search includes “buy a bicycle bell” or “types of bicycle bell” etc.
Exact Match
Exact match is a match type which shows your ad only when the exact keyword is searched by a customer.
This type of Keyword Match has the highest relevance but also restricts your reach to your audiences.
Note: Keywords can only be added in specific type of Campaigns called Manual Campaigns.
Amazon also supports Automatic Campaigns where it decides which of your products are shown (if at all) to which of the user search queries.
Automated Campaigns are similar to Google Shopping & Bing Shopping Campaigns.
Step 6: Optimize the performance of your Marketing Campaigns
Ah! Performance Optimizations — The holy grail of all Marketing Campaigns. Here, you need a bit of PPC expertise to determine;
- Which keywords should go with what products?
- How to tackle inventory changes?
- Which keywords should not go with certain products — negative keywords
- What optimum bids to set-up that gets your products in front of potential customers without costing you more money that needed.
- Which products to advertise, which ones to not
This is where performance optimization platforms like the 1-click Marketing for Amazon from OnlineSales.ai comes into full power.
Some key features of the 1-Click Marketing for Amazon Sponsored Products are:
- Helps you launch your marketing campaigns, for your desired products/categories with just 1-click.
- Performance focussed merchandise selection, algorithms and Industry benchmarks select the best products to market to achieve your business objective.
- Automatically figures out which products should be clubbed together, what keywords they should match for and what bid to set for each.
- AI-Driven optimisation algorithms ensure you always get the best ROI for every dollar spent.
Sounds exciting? Come! Have a test drive here! Or Learn more about 1-click Marketing for Amazon here.
Related Posts
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Google Shopping Vs Amazon Sponsored Products: 10 Key Differences
About OnlineSales.ai
OnlineSales.ai is an AI-Driven E-Commerce Marketing Platform. Led by Ex-Amazonians the platform is made by retailers for retailers.
OnlineSales.ai is retailer’s operating system for user acquisition, retention and monetization.
At its core, the platform gathers and mines billions of data points to build product catalog intelligence, user personas and dynamics of retail economics.
This system intelligence is combined with technology automation on an OnlineSales platform that now hosts connected apps across marketing, user experience and data technologies — all on a single platform.
Originally published at onlinesales.ai on October 9, 2017.
