February 28, 2024
With an estimated 1.9 million active sellers competing for sales, it's no wonder that standing out on Amazon can be a challenge. But fear not, budding entrepreneurs and established sellers alike – there's a secret weapon that can help you capture the attention of potential customers and boost your sales: Amazon Sponsored Products.
Reading Time - 10 min
In this guide, we'll give you an overview of Amazon Sponsored Products and explain why they can be an asset to your multichannel eCommerce strategy.
We'll cover everything from setting up campaigns to optimizing bids and managing your budget. By the end of this article, you’ll be well-equipped to use Amazon Sponsored Products to drive more traffic to your product pages and increase sales.
Imagine you're browsing Amazon looking for a new pair of headphones. As you type in your search term, you notice some products at the top of the results page with a little label that says "Sponsored".
These are Amazon Sponsored Products, which are cost-per-click (CPC) ads that blend in with organic search results and promote individual product listings.
Amazon Sponsored Products work by matching a visitor’s search terms with relevant products. When a potential customer clicks on a Sponsored Product ad, they’re taken directly to the product detail page on Amazon where they can learn more about it and make a purchase.
In 2023, Amazon announced that Sponsored Products Ads would also start to appear on premium apps and websites such as Pinterest, BuzzFeed, Hearst Newspapers, Raptive, Ziff Davis, Lifehacker, and Mashable.
You choose the keywords that best match your products and set a bid – the maximum amount you're willing to pay for each click on your ad.
When a shopper searches for a keyword that matches your ad, your product listing has the potential to appear at the top of the search results page or even within the product page itself - usually in the related products section.
The beauty of this approach is that you only pay for clicks, meaning you only invest when someone actively engages with your ad. This makes it a cost-effective way to reach a wider audience and boost your visibility on Amazon.
Just an FYI, you need to be an Amazon Seller to launch Sponsored Product Ads. Not an Amazon Seller? Check out our handy guide to get started selling on Amazon.
Sponsored Products are a win-win for both advertisers and shoppers. Advertisers can reach a wider audience and increase their sales, while shoppers discover new and relevant products that they may have overlooked without the ads.
In highly competitive product categories, Amazon Sponsored Ads offer a powerful solution to elevate your brand and products, especially if you're a new seller or your listings have lower review counts or overall visibility.
Are you already an Amazon Seller? Here are some of the main benefits of using Amazon Sponsored Product Ads:
While Amazon Sponsored Ads can be an effective way to increase product visibility and sales, they also have some limitations that sellers should be aware of:
Ready to get started? Here’s a step-by-step guide to creating your first Amazon Sponsored Products campaign:
Getting Sponsored Products to work for you is about putting together a smart game plan that covers everything from choosing the best keywords to constantly optimizing your campaigns.
Here are some best practices to improve the performance of your Sponsored Product Ads:
These are keywords that are more likely to lead to clicks and purchases. You can find these keywords by using Amazon's Search Term Report and analyzing which keywords are generating the most clicks and conversions. Examples include: “protective laptop case”, “noise canceling wireless headphones”, and “insulated travel mug”.
Including negative product and brand filters in your campaigns ensures that your ads aren't displayed for irrelevant search queries or product pages. Negative keywords and product targeting can include competition keywords, brand names, ASINs (Amazon Standard Identification Numbers), and generic keywords. For example, if you sell running shoes, you might exclude keywords like "shoes" or "athletic shoes" because these keywords could attract clicks from people who are not specifically interested in running shoes.
When shoppers click on your ad, they land on your Amazon product detail page. That’s why it’s important to keep the quality of your product information high as detail pages directly impact your ad performance and sales. Improvements you can make include: keeping your products competitively priced, creating a strong product title, selecting products with high reviews, using at least 4 high-quality product images, and including a list of bullet points of your product’s key features.
If you’re new to Amazon Sponsored Product Ads, it’s a good idea to select the automatic targeting feature as it’s the easiest and quickest way to get started. With automatic targeting, Amazon automatically matches your ads to keywords and products, saving you time compared to manual targeting.
Once your automatic campaign has had time to gather data, it can provide valuable insights into which search terms are generating conversions and which are not. This information can be applied to your manual campaigns to refine your targeting and boost sales. Manual targeting gives you more control over which keywords you target, allows you to set custom bids, and enables you to target specific products or entire categories.
Before you set up your Sponsored Products, make sure you establish a monthly budget for your Amazon Ads campaigns. This will help you come up with your daily budget. Amazon recommends a minimum daily budget of $10 (or the equivalent in your currency) to keep your ads live throughout the day.
You can generate several reports to measure the performance of your Sponsored Product Ads. The “Placement Report” provides insights into your ads' performance across different placements on Amazon, while the “Performance Over Time Report” gives you an overview of your clicks and spend to track your average cost-per-click and total spend over time. Use these insights to make informed decisions about whether you need to increase your bid to boost your placement or cut low-performing keywords.
Want to supercharge your Sponsored Products campaigns? Tap into the power of automation. These powerful tools take care of mundane tasks, like automatically updating product listings, optimizing placements, and analyzing performance.
There are a number of different ways to automate your Sponsored Products campaigns, but some of the most common include:
Explore more about how automation can help your Amazon advertising strategy on the Channable website.
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