Marketing
July 30, 2022

Understanding Amazon Sponsored Products for Amazon Sellers

Table of content

Once you have created a product, do not miss out on making sales. In the history of great products, great marketing strategies bring awareness to the product. For this reason, companies spend more on the marketing department to ensure their products are successful.

As a seller, understanding Amazon sponsored products for Amazon sellers is key to getting your products on the first page of Amazon's product pages. So, what does sponsored mean on amazon, and how can you get Amazon sponsored product ads for your products?

What are Sponsored Ads, and Why Do You Need Them?

You can make money on Amazon if you learn the ropes well. Amazon sponsored ads are vital to helping a new product become visible on the product pages before it ranks well from organic search results alone. Organic search results result from sales made, and before you make sales on your new product, buyers need to see the product to buy it in the first place. This is where the ads on Amazon come in.

Sponsored ads

Image source: junglescout.com

Running ad campaigns on Amazon requires the use of some keywords. Keywords are terms buyers use when looking for a product. Therefore, when doing keyword research, you must remember what the buyer will search for when looking for the product.

Since other platforms highly contest these keywords, you will have to bid for the keyword. Your product will appear on the first product pages, and you pay a certain amount every time a buyer clicks on your sponsored product ads. This process is called Amazon pay-per-click advertising (PPC).

Once your sponsored product appears on the Amazon page, it will blend in well with the organic search results, and there is a high chance of getting clicks and sales.

Close to 80% of sellers are using sponsored product ads on amazon instead of sponsored brand ads. This is proof that this method is more likely to work for you. Better still, you do not need a registered brand to use the Amazon-sponsored product ads system.

How do Sponsored Product Ads on Amazon Generate Sales?

The format you will bed using is the pay-per-click method of advertisement. Your ad will appear on the Amazon search results page when a buyer searches for a keyword similar to the one you have paid for. When the buyer goes on to click your product-sponsored display, then you will have to pay for the click. It is for you to decide how much you want to pay, directly affecting your visibility.

Sponsored ads

You will decide how much you want to pay for each click. This gives you control over your expenditure, and can spend within your budget. Take note of the following points.

  • You need to define the keywords for which your products will appear on the product pages.
  • You must decide how much in pay per click you want to spend every time someone clicks on your product. This is the process called bidding.
  • Once you bid, it will be up to the algorithm to decide where on the Amazon pages your product will appear when a buyer places search queries.
  • As you can tell, the higher you bid, the better your product's chances of appearing on the first page and even as a top result.
  • Your sponsored product ads will blend in with the organic search results, and there is a chance it will get clicks which might translate into sales.
  • You are charged the amount you placed on the keyword bid every time a buyer clicks on your sponsored product ads.
  • You are charged for each click regardless of whether the product is selling or not.

Targeting

We now know that we use keywords to target customers who will use those terms when searching. Keywords are search terms that buyers use when looking for a product.

Targeting

Image source: junglescout.com

The Amazon algorithm can generate these search terms manually or automatically created. You can choose which targeting method you want to run the ad campaign. There are two types of targeting;

  1. Manual targeting
  2. Automatic targeting

To set up a campaign, go to the Amazon sponsored products tab and hit the "create campaign" button. Remember, do not click the "headline search ads" tab, which is confusing for some people. Instead, navigate to the campaign manager, and you are ready to set up your ad campaign.

1) Automatic Campaign

In automatic campaigns, Amazon looks at your listing information and chooses which keyword suggestions to pick for you. Therefore, you must be smart when writing your listing information, as Amazon will base its keywords on the information you provide. Therefore, you need to do an in-depth keyword search to assist the algorithm.

Online Shopping, Amazon

As a seller, you will have to pick match types you want the algorithm to base its search on. This will give the automatic campaign a sense of which direction to take. Here are the match types to pick from;

  • Loose match- Amazon ads will appear when using loosely related keywords.
  • Close match- Sponsored products ads will appear when buyers use closely related keywords.
  • Substitutes- These Amazon-sponsored products ads target customers looking at different brands of products similar to yours.
  • Complements- Amazon advertising targets buyers looking at products that complement yours or are likely to be purchased alongside your product.

If you are a beginner selling on Amazon, automatic campaigns are the best place to start because they are easy to set up, and they will give you the information you can use in your manual campaigns in the future to display ads on Amazon.

The automatic Amazon-sponsored ads may reveal the keywords you had not thought of before. The statistics you will get from your ad campaigns include;

  • Each automatically generated target keyword.
  • Expenditure on each keyword.
  • Sales are generated from each campaign.

Amazon has different marketplaces, and you can use these statistics to run campaigns on those other marketplaces. In addition, Amazon helps you by converting the numbers to the local currency of the marketplace you are dealing with to make it even easier for you.

market places

Image source: junglescout.com

Amazon further matches products and suggests bids for the new marketplaces you are willing to explore.

2) Manual Targeting

We suggested that you start with automatic campaigns for your sponsored products. We did so because automatic campaigns give you the statistics and the information that can inform how you will go about your manual campaigns more knowledgeably.

Manually done amazon sponsored ads give you more control which can lead to more sales. Once your products are eligible for the Amazon buy box, you are ready to go.

Once you know how amazon sponsored products ads are set up manually, you will have fun with it. You can pick the keywords for your sponsored products campaign on your own or use the list suggested by Amazon itself.

Product targeting

Image source: junglescout.com

Manual campaigns let you set up your custom bids. Creating your own keywords and custom bids gives you more control over your sponsored ads campaign. When looking for relevant keywords, you can use tools like the keyword scout to help you find particular keywords you might not have thought of before.

Apart from keyword-based targeting, you can do product targeting too. You will need to do competitor monitoring on other sellers, brands, categories, ASINs, and product features.

To take full advantage of the manual campaign, you can do product and keyword targeting separately on different campaigns. This way, you can get the full advantages of both.

Just like automatic campaign management, the manual campaign has match types. Here are the match types for the manual Amazon sponsored ads;

  • Broad match- The targeted keywords can appear in any order, and the buyers search terms can include additional words. For example, if your targeted keyword is "summer sunglasses," the term "summer women sunglasses" can trigger your amazon sponsored ads to show.
  • Phrase match- The buyer can include your targeted keyword exactly as it is in their search phrase, and their search can include other words. For example, "summer sunglasses for women" will be relevant if your keyword is "summer sunglasses."
  • Exact match- The buyer has to enter the exact search word as the keyword you placed a bid on. For example, if the keyword is "summer sunglasses, " the search must be "summer sunglasses" for your sponsored product ads to appear.

Campaign Bidding Strategy

We already noted that a bid is what you are willing to pay every time a buyer clicks on your product. This amount is dependent on what your competitors are bidding on their products. Therefore, the bidding cost is a competitive price. Your bid still holds the maximum amount of money you are willing to use to display ads regardless of what bid someone else has set.

Bidding

Image source: junglescout.com

For example, if someone places a bid of $0.50, and your bid is $0.40, you will pay $0.40 as that is your highest bid.

There are three bidding strategies you can use to display ads for your products. To help your strategy, you can use the keyword scout to see what PPC campaigns you might be dealing with in terms of price.

Here are the bidding strategies to use for your sponsored ads.

  • Dynamic bid-down only- Amazon lowers your bid when it realizes your sponsored products are not t4ranslating to sales.
  • Dynamic bid up and down- Amazon will raise your bid if there is a chance that your sponsored products campaign will translate into sales and reduce the bid if the sponsored ads are less likely to convert. The raise can be by up to 100%.
  • Fixed bids- These bids on your Amazon ads can not be altered by Amazon. Only you can change these bids.

If you have a tight/fixed budget for your Amazon-sponsored product ads, you should use fixed or dynamic bid down only to avoid extra costs. The dynamic bid up and down may increase your Amazon-sponsored products cost in the long run. You have to watch your ad spend to be profitable.

How do I Set Up Amazon Sponsored Ads?

Use the following steps to create a sponsored ad.

  1. Find seller central.
  2. Go to "advertising."
  3. Click "campaign manager."
  1. Image source: junglescout.com
  2. Click create campaign
  1. Image source: junglescout.com
  2. Click "sponsored products" under "choose your campaign type."
  3. Create campaign. In this stage, you choose the dates, daily budget, portfolio, campaign name, and targeting type.

Image source: junglescout.com

Remember, if you choose the manual campaign target type to reach your targeted customers, you must pick which bidding strategy to work with. We have talked about bidding strategies above.

Image source: junglescout.com

  1. You can create an ad group to help you stay organized through your advertisement. As an Amazon seller, staying organized will get you more customers.
  1. Image source: junglescout.com
  2. Time to pick the products you want to sell in your Amazon-sponsored campaigns.
  1. Image source: junglescout.com
  2. Choose the targeting type you want. Remember to choose between product or keyword targeting.
  1. Image source: junglescout.com
  2. We recommended the keyword targeting route. Under this targeting type, Amazon will give you a list of keywords you can target. Here is where you will choose the match type as well. We talked about match types earlier.
  1. Image source: junglescout.com
  2. Next to this tab is an option for you to add your own keywords.
  3. Once you are done adding the keywords, Amazon will provide a suggested bid for each keyword. If you want more impressions and ad sales, you can increase these suggested bids by about 30% if your budget allows.

Image source: junglescout.com

With time you will be able to know when to add negative keywords. These are keywords that are clicked on frequently but are not translating into any sales. If a buyer uses these keywords, your sponsored products will not appear.

  1. Click "Launch Campaign" as the final step.

How to Make Amazon Sponsored Ads more Productive

Here are some tips to optimize your sponsored ads campaign.

How to Make Amazon Sponsored Ads more Productive

Image source: InfoTrust.com

  • Avoid using Amazon-sponsored brand ads at first as they cost more.
  • Let your advertisement campaign run for about two weeks before adjusting anything.
  • Feeling like losing money during your first campaign should not worry you, as this is normal.
  • When you give your campaign time, Amazon will collect data that will be useful to you in the long run.
  • Figuring out your ACoS is vital as it will show you how much you get from the sponsored ads you create. This way, you can compare your cost of advertising against your revenue as a result of sponsored ads.

Tip: In your automatic targeting campaign manager, you will find a summary of your campaign. Here, you can find the following;

  1. Your expenditure
  2. Sales
  3. ACoS
  4. Total impressions
  5. Total impressions
  6. Number of clicks on your ad campaign
  7. Number of orders from your ads
  8. On the automatic ad group, you will see the search terms lab, where you will find all the search terms Amazon targeted for your products.

This page has a lot of statistics that will give you a clearer picture of how your products are doing.

Tip: Sort your keywords by clicks to see which ones are doing well or poorly. Once you find the ones not doing so well, you want to add them to the negative keywords list. You want to add the keywords that are doing well to the manual targeting campaign where you are free to adjust the bids.

Tip: Once you have transferred the keywords that are doing well to the manual targeting campaign, use exact matching for the keywords.

When you look at your stats more often, you will know which bids to increase, lower or pause. The bidding tips for Amazon above will help you reach your ads breakeven sooner.

Final Take

amazon sponsored posts

Image source: cnbc

As a new seller on Amazon, you will need to learn marketing techniques like sponsoring your products to reach buyers. Sooner, your products will rank organically on Amazon once you get enough sales and good reviews.

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