The term “Amazon advertising” encompasses a variety of advertising strategies and avenues. In this article, we want to simplify the different types of Amazon advertising and how you can utilize these to drive traffic and increase sales.
Amazon Marketing Basics
There are a few basics you want to cover before even beginning to look at Amazon advertising strategies. Basically, you want to understand the purpose of marketing on Amazon and the goal of marketing for your specific Amazon business.
Why Should You Advertise?
Advertising is the number one way to increase visibility and drive traffic to your listing. With increased traffic comes more sales. With more sales come more reviews. With more reviews come a greater seller ranking.
All of this together lends itself to boosted revenue and a more optimized listing that can win the Buy Box.
Plus, Amazon has some of the least complicated advertising forms in the e-commerce sphere. There is a low barrier to entry and a reasonable cost, which makes it accessible to any Amazon business big or small.
When Should You Advertise?
There’s not necessarily a wrong time to advertise, but some opportunities are better than others. For example, if you’ve just launched a new line of products without any sales or reviews, you may not see the conversion rate that you want from your advertising campaign.
Often, we recommend advertising after you’ve made your first few sales and received positive reviews. This gives you a leg-up and shows potential buyers that you’re a solid seller.
With an optimized listing, a sales history, and a few reviews, you can start advertising to further boost your product.
Remember, as your advertisement sells more products, you’ll gain a higher sales ranking and receive more customer reviews. This, in turn, can help create a positive cycle of optimization.
What Terms Should You Know?
- Attributed sales: total product sales directly generated from your advertising campaign in one week; these are the sales “attributed” or credited to your marketing spend
- Impressions: the number of times your ad was displayed or seen
- Clicks: the number of times your ad was clicked; for pay-per-click advertising, this is the number that determines your ACoS
“Advertising Cost of Sales” or ACoS is the key metric you’ll want to consider when running any sort of Amazon advertising campaign. This is the percentage of attributed sales you received from your advertising spend.
Basically, the ACoS is your return on investment. How much did you make versus how much you spent?
Calculate the ACoS by dividing the total ad spend by the attributed sales.
For example, if you spent $5 on advertising in one week and had $20 of attributed sales, your ACoS would be 25% (5 divided by 20). If you spent $10 on advertising with $20 of attributed sales, your ACoS would be 50%.
A low ACoS percentage shows a higher return on investment.
How much should you spend?
People always ask us: how much should I be spending on my advertising?
Our response is always the same: however much your budget affords!
If your advertising campaigns are optimized and successful, it’s the best possible use of your money.
But, of course, that’s a big “if.” You want successful campaigns with high returns.
Rather than looking at how much you want to spend on your advertising campaign, look at how much you want to return on that campaign.
Basically, what is your ideal ACoS?
Check out this article by Sellics with the calculations for a strong ACoS for your Amazon campaign.
If your advertising strategy doesn’t provide you with the ACoS percentage you want after 1-2 weeks, you know you need to adjust accordingly. You can keep track of your ACoS on Seller Central under “Advertising” then “Keywords.” This can show you which campaigns, ad groups, and keywords are performing well and which need to be tweaked.
Not sure how much to spend on your Amazon marketing campaign? Contact Seller’s Choice to consult on an appropriate budget for your business.
Now that you know what your Amazon advertising campaign can do for you, what are the types of marketing strategies to consider on the Amazon platform?
Sponsored Product Ads
“Sponsored Product Ads” is the most common advertising strategy for Amazon sellers. These ads appear when a customer types specific keywords into Amazon’s search bar. These ads usually show up amidst search results and appear like other listings, but they’re flagged as “Sponsored.” These can also show up on other product listings in the section “Sponsored Products Related To This.”
Amazon sellers “bid” on specific keywords in order to appear as “Sponsored Ads” on relevant search results. Certain keywords cost more for optimization than others based on advertising competition.
Sponsored Product Ads are pay-per-click (PPC), meaning that you only pay the advertising cost when a user clicks on your product listing from the search results. Thus, you want to make sure that every click converts to a sale in order to have a strong ACoS percentage. Conversions come from optimized product listings.
There are two approaches to Sponsored Products: automatic and manual targeting.
Automatic targeting puts the control of the campaign in the hands of Amazon’s algorithm. You simply enter the campaign name, budget, and start date, and Amazon will run your campaign for you. The algorithm will use the information from your listing to determine which search queries will be most appropriate for your ad.
This is a great opportunity for you to gain more advertising data. Amazon will run the ad, and you can receive reports with the success of certain search terms. The reports will show you what terms people are using to find your product as well as which terms have the highest conversion rate. This can help you come up with a list of optimization-worthy keywords as well as negative keywords.
With information from the automatic targeting campaign, you can run a successful manual targeting promotion. With manual targeting, you handpick the keywords on which you’ll bid and optimize, as well as list those negative keywords you want to hide from bidding.
Manual targeting gives you more control over how broad or narrow your search terms are and the relevant audience viewing your ad. However, if you don’t have the data to backup your manual keywords, this can be a riskier option.
Thus, we usually recommend running an automatic campaign for 3-4 weeks to get an idea of search terms and target audience data for your product. From there, you can better understand how to manually control your campaigns.
Still confused about Amazon Sponsored Ads?
Contact Seller’s Choice for a Sponsored Ad consult for your business!
Headline Search Ads
Headline search ads display in the search result pages as headline banners above the listing. These are also PPC and keyword targeted.
Unlike Sponsored Ads, though, Headline Ads don’t promote a single product. These banners can lead to any Amazon webpage, including a business’s brand page. Often, sellers will use Headline Ads to promote multiple products within their brand at one time.
Headline Search Ads are only available to Professional Brand Registry owners as they promote brands rather than singular products.
Product Display Ads
Product Display Ads are PPC but are not targeted by keywords. Rather, these are interest- or product- targeted. When running a campaign, you choose from a long list of products or interests, and Amazon will show your advertisement to a relevant searcher showing related purchasing behaviors. This advertising pulls on data analytics to ensure your ads get to the right person at the right time.
These ads usually appear on the right banner or at the bottom of search results. They can also be found on the customer reviews page and in Amazon marketing emails.
Product display ads are banners that advertise across Amazon, not just in search results. These “premium” ads can sometimes appear on other websites as well.
Don’t forget that email automation is one of the greatest opportunities for marketing growth on Amazon!
Click here to be redirected to get our FREE email marketing eBook! This book offers a template of every automated email needed to increase visibility and customer retention on Amazon!
Although the “Today’s Deals” section is not an advertising campaign you pay for, it’s still a strong marketing tactic to consider. Learn more about how to use the Amazon Today’s Deals section to grow your visibility, obtain a competitive advantage, and boost your sales.
The Bottom Line
If you’re a new seller, we recommend a short-term automatic Sponsored Ad to gain information about your relevant audience and search terms. From there, you can expand to controlled, manual Sponsored posts with keyword bids and negative keywords.
If you are a Brand Registry owner, you can use Headline Search Ads to promote a selection of products within your private label brand. For advanced sellers, you can use Product Displays to have increased visibility throughout the Amazon platform.