Brands are using Amazon's marketplace for growing and selling their products. Amazon’s algorithm now rewards brands that have the resources to establish shop-within-shops on the marketplace. It’s just as important that sellers have A+ premium product content, a brand store where customers can shop full collections, and product video and imagery alongside fair prices and Prime shipping. Amazon marketplace also allows them to use one of the most powerful advertising tools to drive incremental sales and discoverability for any type of product.
These tools are Amazon Sponsored Products ads. These are PPC or pay-per-click ads that help brands drive the traffic to the desired Amazon product detail pages on Amazon platform. When an Amazon shopper searches for your keywords, your ad is eligible for display alongside the search results. The cost of becoming a part of this marketplace has been increasing constantly with more and more Amazon sellers trying to find their place under the roof.
Since the bidding is constantly subjected to ever-increasing demand, sellers have to find new ways to beat their competition. So far, the best way to get ahead of the competition curve on Amazon has been to use sophisticated paid campaigns to market the products to a broader audience.
With that in mind, this guide helps you understand Amazon Sponsored Products techniques and strategies such as refined product targeting, keyword harvesting, data segmentation, and campaign structure to augment your paid advertising conversion rates.
What you need to know about Amazon Sponsored Products
Advertising your products on Amazon allows you to boost your sales by increasing visibility on the relevant search results. Sponsored products on Amazon are PPC ads that target your product detail pages on the Amazon platform by utilizing product targeting and keywords to drive the wanted traffic to the product detail pages. Brands invest in these search ads to boost their reach, drive brand awareness, and increase Amazon conversions.
These are image ads with the primary purpose of attracting consumers to product pages. They act as natural search results and appear in different places across Amazon web pages, where consumers can see them. Thus, giving you control over product merchandising on Amazon.
ASP ads as an essential tool for brand marketing
According to the Amazon consumer study, the best way to discover new brands is by using Amazon. In terms of brand marketing, ASP ads are essential for expanding brand space, driving traffic and conversions, and building brand awareness.
APS ads are very similar to Google Shopping ads as they are based on bids and keywords. When it comes to keywords, you can let Amazon automation work for you, or you can make your selection. Bid for keywords relevant to the products you want to advertise. If your ad is according to the search terms, it will appear in the search results whenever consumers search for those particular keywords.
This is extremely helpful for brands that want to make their products more exposed and targeted. It's one of the most useful ways to maximize sales. What makes ASP ads even more attractive is the fact that they are very cost-efficient.
Brands only pay when consumers click on their ads. When this happens, the ad leads them directly to an Amazon product detail page where calls-to-action buttons help seal the deal.
Benefits of using Amazon Sponsored Product ads
Sponsored products help build a brand presence on Amazon by:
● Allowing low-exposure and new ASINs to accelerate growth
● Putting top Buy Box offers on top of search results
● Drive more incremental revenue
If we consider all this, we can mention the top five benefits that brands can harness by using Amazon Sponsored Products:
● Increased brand visibility - ASP ads boost brand visibility by making ads show on the first page of product pages or search results.
● Personalized service for each consumer - It has a higher conversion probability if a customer gets what he/she wants when they want it. ASP ads allow brands to customize their ads to customer search preferences to match their exact products and make them more purchasable. That way, shoppers who are looking for these products get to buy them on demand.
● Increased sales - When more consumers see your products, your sales go up. All the visitors on the platform are not necessarily there to make a final purchase. There might also be people who are looking to compare different options of the commodity they want to buy. ASP ads just help put the most relevant products in front of them.
● Cost-efficient marketing - Being PPC type makes these more cost-efficient than just paying for ads that might or might not get noticed. Those consumers who click on your ad are far more likely to make a purchase.
● Increased ROI - ASP ads have campaign reporting, which brands use to track the performance of their campaigns. This helps adjust resources according to the profit made to maximize return on investment.
How to get started with ASP
If you're giving a thought to introducing your products to the Amazon marketplace using ASP ads, there are a couple of things you should know. There are specific requirements that new brands have to meet to get started with ASP:
● New brands need active Amazon seller accounts
● New brands need to be able to send shipments to all United States countries
● Amazon allows only those brands that are selling new products
Apart from these regular requirements, there's one more rule to be mentioned. Brands need active product listings that have at least one of the following categories:
● Entertainment collectibles
● Office products
● Fine art
● Sewing, crafts, and arts
● Garden, lawn, and patio
● Accessories and automotive parts
● Gourmet food and grocery
● Pet supplies
● Personal care and health
● Kitchen and home
● Scientific and industrial
● Sports collectibles
● Phones and accessories
● Home improvements and tools
● Clothing and accessories
● Toys and games
● Collectible coins
● Movies and TV
● Video games
● Watches electronics
● Musical instruments
● Consumer packaged goods
● Fresh and prime pantry
How to set the most effective and efficient ASP campaign
If your brand meets the criteria, you can start thinking about setting your very first Amazon Sponsored Product campaign. Here are a few things to keep in mind to make sure your campaign is practical and efficient.
1. Think about the products you want to advertise
Everything starts with the products you want to show and sell. Think about this. Are you promoting your entire inventory? Are you into selling only selected product lines, or you're looking at specific products? Catering to your advertising needs depends on the size of your business.
Brands, re-sellers, small or large businesses all have different advertising needs. Since ASP will be the core of your advertising strategy, you'll have to think this through to avoid being overrun by your competitors.
2. Set clear business goals
Whatever your advertising needs may be, you have to set your business goals clearly to gain control over your actions. Think about grouping your products with similar goals together to be able to better track and monitor your performance.
Brands usually set different objectives to improve their overall performance. Think about shifting old stock or launching a product to drive traffic and gain exposure for new offerings. Separate your products by business objective and category to supply your listings with the highest quality traffic.
If your consumers are only looking for auto parts and accessories, that's the only listing they should see in their search results. You can accomplish this goal by categorizing ad groups by color, style, and other product-specific characteristics. This greatly improves keyword relevancy and makes consumer search queries more fruitful.
3. Understand the importance of organic search
It's essential to know the search preferences of each consumer to be able to adjust your strategy accordingly. Different customers find products in different ways. To monitor that search, Amazon provides brands with the Search Term Rate, a tool that allows them to use keyword data to analyze consumers' search preferences.
Knowing their preferences makes it a lot easier to give them exactly what they're looking for. This knowledge should be the framework of your ASP strategy. Choose your products carefully and make sure you set a daily budget goal.
With Sponsored Products, you select the products you want to advertise from your existing listings on Amazon. You then assign keywords to those products and set your cost-per-click bid. You will organize your ads into campaigns using Campaign Manager on the ‘Advertising’ tab in Seller Central. Campaigns allow you to track your results at the level of granularity that makes the most sense for your business.
Develop your ASP strategy
Now that you know the necessary details about Amazon Sponsored products and ads, the requirements, and how to set your ASP campaign, it's time to work on your ASP strategy. Build your strategy by either featuring seasonal products or launching new products.
There are two ways to build and manage your ASP strategy:
- Automatic targeting - Amazon uses product information to show ads to the relevant target audience.
- Manual targeting - Brands use keyword features to set their own ASP campaigns.
Automatic targeting allows brands that are short on time to avoid the entire keywords selection process. However, it reduces the level of control brands get with manual targeting. The best thing to do is to combine both approaches. Develop a combined strategy by considering the following steps.
1. Set automatic campaigns for starters
Many brands make the same mistake in believing that there is a particular category of products in their catalog that will do better than the rest. They don't pay attention to the actual performance of those products. This is the most common inefficiency that sellers make when running their Amazon ads.
This strategy is wrong. To avoid exposing your entire business to risk, start your ASP strategy by harvesting crucial data from running automatic targeting campaigns. By doing so, Amazon will use all available product information to match all relevant customer searches and target your ads.
A brand can accomplish so much with the right selection of keywords. It's safe to say that choosing the best keywords is the most vital element of your ASP strategy. They help improve organic listings and page sales rank, as well as product sales.
Automatic campaigns allow brands to use the Search Terms Report for all sponsored products, as this helps select the best keywords.
2. Harvesting keywords
When using automation to identify the best keywords, Amazon offers excellent features sellers can use to find out how many sales, clicks, impressions, etc. each of the listed products received.
The Amazon Search Terms Report provided the exact product SKU, relevant to that search keyword, which is essential data for Amazon sellers. However, the report doesn't offer this kind of data anymore since its last update. Instead, Amazon offers brands to base their strategies on catalog size.
3. Structure your campaigns
Start structuring your campaigns by using just 1 SKU per ad group. This SKU segmentation significantly increases the granularity and accuracy of both keyword and bid adjustment harvest.
Since developing a unique campaign structure is a huge process, you can do it on a timely basis by getting access to Bulk Operations for Sponsored Products. This feature allows you to use excel documents to make your campaign management a lot easier.
The more you segment and structure your campaigns, the more you're in control of your advertising strategy and products.
4. Manual campaigns for sponsored products
Building campaigns around sponsored products includes knowing what quality keywords are. Since so much depends on these keywords, we can't emphasize enough the importance of identifying top quality keywords.
Once the process of keyword identification is over, add SKUs to bid on each keyword and build your manual ASP campaigns. In case you've selected the wrong keywords, you can always rectify and correct that by tracing the ineffective keywords back to the data.
This allows you to make swift changes to your campaigns as trends and seasons tend to change. Keep in mind that both harvesting keywords and structuring campaigns are a continuous process that includes making frequent changes.
5. Choose the right match type for your keywords
Whether you're using bulk uploads or Campaign Manager to create your keywords, you'll have to specify a match type to fine-tune where your ads appear on in the search results. There are three types of keywords:
● Exact match - Your keywords must match the exact search term the customer inputs. Exact match also works by matching close variations of the exact term. While this type is quite restrictive, it can be used to accomplish more relevant customer search results.
● Phrase match - As the name suggests, a phrase match means that the search terms must contain either a sequence of words or the exact phrase. The phrase match helps make your ad placement more relevant.
● Broad match - This type is the most used on Amazon, and brands go with it because it provides broad traffic exposure to the ads. Every search term that contains either the keyword term or its synonym will be a match.
6. How much does it cost?
After selecting your preferred keyword, You set the maximum cost that you are willing to pay when a shopper clicks on an ad for your product. The more competitive your bid is, the more likely your ad will be displayed when an Amazon shopper searches for one of your keywords. You should always remember:
- Know about your goals to be leveraged from Advertising cost of Sale.
- Understand and fix a threshold for your sales v/s ad. Spend.
- Base your strategic bidding decisions on the conclusions from the above two.
ACoS or Advertising Cost of Sale is a metric used to measure the performance of an Amazon Sponsored Products campaign.
ACoS indicates the ratio of ad spend to targeted sales and is calculated by this formula:
ACoS = ad spend ÷ sales
In order to determine whether a certain ACoS is good or bad, you’ll need to take the entire cost structure of your product into account. ACoS percentage – Let’s say you spent $20 on ad spend to make $100 in sales. Your ACoS percentage would be, in this example, 20%. Once you determine your product’s profit margin as a percentage, you would then deduct the ACoS percentage to get your final margin.
As long as you spend less than your profit margin on an advertisement, you won’t incur a loss on your SP campaigns. A lot of people ask “But what if my Amazon ACoS is really high?” The higher your ACoS, the higher is your ratio of ad cost to sales revenue.
The lower your ACoS, the lower your ratio of ad cost to sales revenue. Ideally, you want as high a sales revenue figure as possible, with as low an ACoS as possible.
Optimize your campaigns
So, now that you know what to do with your Amazon Sponsored products and ads, as well as how to set up your campaigns, the only thing left for you is to optimize your campaigns to maximize your Amazon advertising efforts.
Amazon has launched new bidding and targeting features for Sponsored Products. It is basically a campaign optimization setting. This allows
Here are a couple of professional tips to make the most of your advertising capabilities on Amazon.
Consistency is the key to success
Huge platforms demand the highest level of consistency. Amazon hosts millions of brands, and only those that are consistent get the chance to achieve their goals.
Being consistent with your campaign structure allows you to get access to a particular set of characteristics. Use these characteristics to find the best organizational method for your needs.
There are three organizational methods:
● By top sellers
● By product category
● By brand
Monitor the performance of your products
One of the greatest things about Amazon Sponsored Products ads is that you can use many of the features you have at your disposal.
Track and monitor the performance of your products and keywords to know which of them isn't performing well. Remove those keywords and products to increase your effectiveness and efficacy.
There's no such thing as a perfect campaign. That's why we suggest that you regularly monitor the performance of your keywords to find out what things to change, what to adjust, etc. Optimize your CPCs and track the progress of your keywords at all times to avoid wasting money, time, and effort.
Don't forget about negative keywords as they can also help just as much as their positive counterparts. Since underperformance is something you would want to avoid, you could easily avoid spending your ads on low-reach terms.
Negative keywords help make the most out of your ads by preventing them from popping when customers use certain phrases or words.
Now that you have complete information on how to use Amazon Sponsored Products to improve your Amazon SEO and reach wider audiences, all that is left to do is to start putting this knowledge to good use. Keep in mind that being consistent is the key to success.
Monitor your campaigns, use the tips to optimize them, and make sure you use the gathered data the right way. Amazon can help you grow your business and increase sales but only if you know how to navigate the platform and use all available features to your advantage.
To learn about the other Amazon ad types you can use, check out our article about Product Display Ads.