What is Amazon Advertising? Understanding Amazon Advertising offerings and knowing how to apply them to your specific use cases will be greatly beneficial for your business. In today’s article, we will break down the Amazon PPC model, explain its different ad formats, and list some helpful best practices when it comes to advertising your products on Amazon.
TABLE OF CONTENTS
1. What is Amazon Advertising?
2. Amazon PPC Advertising Offerings
3. Building Effective Amazon PPC Campaigns
4. General Amazon PPC Best Practices
5. How VASO Group Helps You Leverage Amazon PPC Advertising
What is Amazon Advertising?
When people hear Amazon Advertising, the most common term that comes to mind is “Amazon PPC.” Amazon PPC, or Pay-Per-Click advertising is a powerful tool that can significantly boost your product visibility and sales on the world’s largest online marketplace. Amazon PPC allows advertisers to bid on specific keywords to display their products in Amazon’s search results and product detail pages. Its auction model is known as “second-price auction,” meaning that when you win a bid, you don’t pay your bid – on the contrary, you only need to pay 1 cent over the second-highest bid in the auction. This helps reduce overbidding and keeps your bids lower. Unlike traditional PPC platforms, Amazon’s focus on conversions makes it a highly effective channel for driving sales.
- How it works: Advertisers create campaigns and ad groups targeting specific keywords. When a customer searches for a relevant term, your product ad may appear. You only pay when someone clicks on your ad.
- Key metrics:
- ACoS (Advertising Cost of Sales): Measures the percentage of ad spend relative to attributed sales.
- Click-Through Rate (CTR): Indicates the percentage of users who click on your ad after seeing it.
- Conversion Rate: Represents the percentage of clicks that result in a purchase.
- Average Order Value (AOV): The average amount spent per order.
Amazon PPC Advertising Offerings
Amazon offers several PPC advertising options to suit different business goals. They are Sponsored Products, Sponsored Brands, and Sponsored Displays. Understanding the specific use cases for each of these ad types is crucial for optimizing your advertising strategy and achieving your business goals.
Sponsored Products
Sponsored Products (SPs) are product-focused ads that appear in search results and on product detail pages. They show up when customers search for a relevant query, and they can also show up when relevant products are present in the search results page. Here’s an example of a Sponsored Product placement:
Sponsored Product ads are perfect for lower-funnel engagement with customers: their purchase intent is already higher because they’re actively searching for a product. Because of this higher intent, customers can be quick to convert once they encounter a SP ad. As such, SP ads serve a core function to drive sales, and contribute to sales velocity to improve your organic ranking and product visibility.
SP ads can also be used on a supplemental basis to support new product launches or boosting traffic for high-demand keywords. When launching a product, using SP ads can help place your new arrival in front of customers who are searching for relevant products. As for boosting visibility, having paid ads can help bump your product listing’s rank in the search results page, which generates extra traffic to your pages.
Some strategies to effectively make use of Sponsored Product ads are:
- Keyword Selection: Focus on high-converting, long-tail keywords that closely match your product’s attributes. Utilize tools like Amazon’s Keyword Suggestion tool and competitor analysis to identify opportunities.
- Bid Management: Employ dynamic bidding strategies to optimize bids based on real-time performance data. Consider adjusting bids based on factors like time of day, day of week, and competitor activity.
- Product Targeting: Use product targeting to reach customers who are already interested in similar products. This can expand your reach and increase conversions.
- Negative Keyword Management: Continuously refine your negative keyword list to prevent irrelevant clicks and improve ad performance.
Sponsored Brands
Contrary to Sponsored Products, Sponsored Brands (SB) are brand-focused ads that are displayed at the top of search results, including a headline, logo, and three product images.
SB ads are ideal for building brand awareness, launching new products, and driving traffic to your Amazon Store. With SBs, your branded ads are prominently displayed at the top of search results, giving your new listings a much needed visibility boost. On the other hand, promoting your brand with your best selling SKUs can encourage customers to explore your Brand Store, and that traffic is pretty cheap to help you compare against larger brands with more established identities.
Some strategies to continually refine your SB ads are:
- Headline Creation: Craft compelling headlines that accurately reflect your brand and product offerings. Use strong keywords to improve visibility.
- Image Optimization: Choose high-quality images that showcase your products and brand identity. Experiment with different image layouts to maximize click-through rates.
- Landing Page Optimization: Ensure your Amazon Store or product detail pages are optimized for conversions. Create a seamless shopping experience to encourage purchases.
- A/B Testing: Test different headline, image, and landing page combinations to identify the most effective elements.
Sponsored Display
Sponsored Display ads (SD) are image-based ads that appear on product detail pages, related products carousels, and on external Amazon sites. Here are some examples of SD placements:
With their versatile placements and simple design, SD ads are ideal for reaching new customers, retargeting previous visitors, and promoting complementary products. It’s important to note that SD ads operate using audience targeting, so here is where you will be able to acquire additional data about customer behavior. To reach new customers, you can set up your SD targeting to focus on customers with certain interests, purchase history, and demographics. You can also remarket to customers who have viewed your products by displaying remarketing SD ads. Finally, using ASIN targeting, you can show your products next to relevant products. This means either encouraging product bundling within your own brand, or conquesting other brands’ products.
To optimize SD performance, focus on these strategies:
- Placement Optimization: Consider the different placement options available (product detail pages, related products carousels, and external Amazon sites) and choose the ones that align with your campaign goals.
- Creative Optimization: Create visually appealing and engaging ad creatives that resonate with your target audience.
Building Effective Amazon PPC Campaigns
To effectively utilize Amazon PPC, consider the following factors when selecting ad types:
- Campaign goals: What do you want to achieve with your advertising efforts?
- Product lifecycle stage: Are you launching a new product, promoting a bestseller, or clearing inventory?
- Target audience: Who are you trying to reach with your ads?
- Budget: How much are you willing to invest in advertising?
To maximize your ROI on Amazon PPC, follow these key strategies
- Keyword Research: Identify relevant keywords with high search volume and low competition. Utilize Amazon’s search suggestions and competitor analysis.
- Ad Copy Optimization: Create compelling and persuasive ad copy that highlights key product benefits. Use strong calls to action and relevant keywords. Test different ad copy variations to improve performance.
- Bid Management: Set competitive bids based on keyword profitability and campaign goals. Adjust bids regularly to optimize campaign performance.
- Campaign Structure: Organize your campaigns and ad groups logically for better management. Create separate campaigns for different product categories or target audiences.
- Negative Keywords: Exclude irrelevant search terms to improve ad relevance and reduce costs.
- Bidding Strategies: Choose the appropriate bidding strategy based on your campaign objectives. Consider options like manual bidding, automatic bidding, and dynamic bidding.
- Campaign Monitoring and Optimization: Track campaign performance closely and make data-driven adjustments. Use Amazon’s reporting tools to analyze key metrics and identify areas for improvement.
General Amazon PPC Best Practices
In the world of Amazon advertising, there are some best practices that businesses can follow in order to make the best of their advertising dollars:
- Campaign Structure: Organize your campaigns and ad groups logically for better management and performance tracking.
- Bidding Strategies: Experiment with different bidding strategies to find the optimal approach for your campaigns.
- Performance Monitoring: Regularly track and analyze campaign performance metrics to identify areas for improvement.
- Budget Allocation: Distribute your budget effectively across different ad types and campaigns based on performance.
- A/B Testing: Continuously test different ad variations to optimize your campaigns.
How VASO Group Helps You Leverage Amazon PPC Advertising
We have one of the best advertising teams out there, with a proven track record of ROAS that is consistently higher than Amazon benchmarks. On top of maximizing the return on your advertising dollars, we will also improve your overall organic rankings by maintaining high-performing paid ads and boost your listing visibility. Let us help you maximize the effectiveness of your Amazon PPC campaigns and drive significant growth for your business.
Let’s grow your business together.