Getting started on Amazon Advertising


Liam Hopton

Programmatic Account Manager


Marketplaces Advertising

With competition in the SERPs getting increasingly fiercer, more brands are beginning to include marketplace advertising in their paid media strategy.

There are multiple marketplace platforms that allow brands to run sponsored ads; in this guide, we will focus on best practice for running Amazon Advertising campaigns.

If you’re not sure whether Amazon Advertising is suitable for your business needs, this blog runs through the pros and cons of running sponsored ads on the platform.

The benefits of Amazon Advertising

Advertising your products on Amazon offers some unique benefits. Over half (55%) of consumers begin their product search on Amazon, so placing sponsored ads here is a great way to target users with a high purchase intent.

Advertising on Amazon is also an effective tactic for new vendors to compete with well-established sellers. The more sales and positive feedback a product gets, the higher it ranks organically too, so brands often find that they can spend less on Amazon Advertising in the long run once they have taken some of the market share.

Selecting which keywords to target

Keyword research for Amazon Advertising is very manual, as Amazon keeps its share search volume numbers secret – even the premium search term reports available through Amazon Retail Analytics (ARA) only show the indexed list of searches, but not the volume.

Methods we find useful for gathering keyword insights include:

  • ARA search term reports
  • Amazon suggested searches
  • Google suggested searches
  • Amazon related searches
  • Google related searches
  • Third-party tools like keywordtool.io.

Deciding which type of campaign to run

There are three types of campaigns you can run on Amazon Advertising: Sponsored Products, Sponsored Brands, and Product Display Ads.

Amazon recommends a ratio of: Sponsored Products (70%), Sponsored Brands (20%), Product Display Ads (10%).

It is worth using these as a starting point to see how each campaign type performs and adjusting from there. Depending on the client and niche, we put as much as 80% on Sponsored Products, and as little as 0% on Product Display Ads.

Sponsored Products

Choosing to run an Amazon Sponsored Products campaign means you are able to run ads for individual products, which target keywords. These display ads appear within and alongside organic search results. There are four types of targeting:

  • Defensive (brand)
  • Generic (non-brand)
  • Competitor
  • Autotargeting (Amazon chooses the keywords based on what it thinks will deliver the biggest ROAS).

Auto campaigns can help to identify opportunities for high-conversion keywords that may not have been apparent from your own research. This is a useful way of finding new opportunities and bolstering the number of keywords in your campaigns.

There are three types of keyword match types that Amazon lets you bid on for Sponsored Products:

  • Broad: will target any search containing all the keywords, in any order. Will also target plurals, variations and related keywords
  • Phrase: will target searches which contain the exact phrase or sequence of keywords
  • Exact: will target searches which match the keyword or sequence of keywords exactly (no words before or after).

Sponsored Brands

With Sponsored Brand campaigns, you can promote multiple products at the same time. The ad appears as a banner at the top of the page, above the organic listings, and can contain up to three items that are relevant to the user’s search query.

When it comes to targeting Sponsored Brand campaigns you can target the same categories as Sponsored Products.

You have the choice of where you want to send the traffic:

  • Product: If someone clicks on one of the products then they get sent straight to the product detail page
  • Brand Store: Send them directly to your brand store (a custom brand page that you can create for free with Amazon)
  • New product list page: Creates a new landing page based off the products that you are advertising
  • Custom URL: Advertise to any other Amazon URL that you may want to go to.

You can include a benefit of the products in the ad headline, as well as choose whether consumers who click through on the ad land directly on your Amazon store, or on a customized product landing page.

Best practice tips for Sponsored Brands:

  • Include best-selling products or products with high ratings
  • Avoid claiming product is the best or number one as ad will be refused
  • Automated bidding will optimize ads for conversions.

Product Display Ads

Unlike Sponsored Products which appears on the product listings returned for a keyword, Product Display Ads can appear on multiple pages (product detail page, customer review pages, product listing page) and target both products and interests:

  • Product targeting: targets certain products and related categories
  • Interest targeting: targets shoppers based on their shopping interests and habits.

When targeting products, it is best practice to place ads against competitors where you know your product can match it point for point, or ideally beat it. This may be because your product has a unique selling point, better customer reviews, or simply costs less.

When targeting by interest, going for niche/ specific categories increases the likelihood that you will get in front of relevant consumers who are in the market to buy your product; targeting broad interests can raise brand awareness but are less likely to convert.

Bidding

Calculating how much to bid

While Amazon will give recommendations on how much they think you should bid, based on the average winning bid range for that particular type of product, it is also possible to calculate the ‘ideal’ bid for each product if you have the following data:

  • Product value
  • Target advertising cost of sale (ACOS)
  • The product’s conversion rates.

Bid price = product value x conversion rate x target ACoS

For example, if we have a product value of £100, target ACoS of 20% and an average conversion rate of 2%, the bid price would be:

Bid Price = £100 x 0.02 x 0.2 = £0.40

Amazon Advertising bidding strategies

Earlier this year, Amazon Advertising launched several new bidding features for Sponsored Products, including fixed and dynamic bidding options.

If you choose to run your campaign using fixed bids, you will need to manually select the bid price for your ads; Amazon will use only this CPC when bidding on a keyword.

Alternatively, you can choose one of Amazon’s dynamic bidding strategies. These are automated bidding options that use machine learning to optimize bids:

  • Dynamic bids – down only: for campaigns using this type of bidding strategy, Amazon will lower the bids in real time when it is less likely that an ad will convert
  • Dynamic bids – up and down: as well as decreasing a bid for ads less likely to convert, this strategy increases bids when a conversion is more likely.

Amazon will adjust bids as much as 100% for ads which appear above search listings, and up to 50% for all other ad placements.

Interested in learning more about Amazon Advertising? Get in touch with our team and find out how we can help.