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Your Guide to Paid Advertising on Amazon

Chris Waflart
Jan 31, 2019 4:51:01 PM

For brands selling on Amazon, simply navigating the ins and outs of the e-commerce platform can be a full-time job. Taking these sales to the next level with advertising on Amazon, however, takes ‘confusing’ to a whole new level. It seems as though every day there are new campaigns arriving to the marketplace, new processes in place for setting up ads, or new guidelines around what types of sellers are eligible for what ad spend.

For new and experienced sellers alike, this constant change and movement can get confusing – especially if your brand wants to break through into the world of Amazon advertising. This guide is here to help. Below are the main types of ad campaigns available on the Amazon platform, along with some ways your brand can get started optimizing your Amazon presence.

Pay-Per-Click

Pay-per-click (PPC) ads encompass a large number of campaign types in Amazon advertising and for a good reason. If you think of Amazon as a large search engine, then PPC Amazon ads are comparable to your typical Google PPC marketing ad. When setting up PPC ads, brands set an overall budget for the campaign, which means that it is willing to spend that much on the specific ad. Once this budget is reached, the ad stops running.

Most PPC ads on Amazon are keyword-driven, and the more specific a keyword is, the more it costs. Brands bid on these keywords and then are charged when customers click on an ad corresponding to a specific keyword. Because there can be many different keywords and prices associated to a single campaign, Amazon created a tracking metric called Average Cost of Sale to help brands understand how successful their campaigns are. This metric takes the total ad spend and divides it by the total sales revenue, which evens out all the differences in keyword and PPC spend.

Sponsored Products

One of the most common types of Amazon ads are Sponsored Products. These ads show up throughout search results (at the top, in the middle, etc.) and are often referred to as the “Google Ads of Amazon.” A type of PPC ad, they help drive customers directly to your products based on a set of predefined keywords. Sponsored Products are usually a great first option for brands looking to dip their toe in the ocean of Amazon advertising since they allow brands to connect with brand loyal customers as well as new audience members who might just be shopping around on Amazon.

Headline Search Ads

Headline Search Ads are similar to Sponsored Products in that they operate on a pay-per-click basis, are powered by keyword search, and appear at the top of an organic search results page, but they are a little more specific to a certain brand. Brands can include up to three products in a Headline Search Ad and link the ad to a custom landing page that delivers much more detail and information than a typical Amazon product listing. While Sponsored Product keywords are often broad and target a large audience, Headline Search Ads are a little more targeted and can even include an actual brand name.

Product Display Ads

Product Display Ads are another type of ad that targets specific locations on the Amazon marketplace instead of keywords. This means that brands can target specific product listings (for example, a brand selling spoons might place Product Display Ads on a bowl product listing) for both their own products and competitors’ products. Some Product Display Ads can even be placed directly under the purchase options on certain product listings, which can cause a customer to switch their buying decision at the last minute. Product Display Ads are a great way for brands to increase brand awareness and build up an online presence against competitors.

Amazon Storefronts

Amazon Storefronts offer a unique marketing opportunity to brands looking to build customer loyalty and deliver a small-scale shopping experience within the massive Amazon universe. Brands can build a unique ‘storefront’ or landing page that expands on all available products the brand offers. One huge benefit of Amazon Storefronts is that it immediately qualifies a brand for the Amazon Brand Registry, which helps brands safeguard trademarked products and protect their brand name on Amazon. With Brand Registry, brands can rest assured their products are differentiated from competitors as well as protect products against MAP policy violations.

Lighting Deals

While Lighting Deals may be most closely associated with Prime Day, they are actually available throughout the entire year. Lighting Deals are available across the entire Amazon platform and basically ‘run’ until all allotted product are sold. As a seller, you can set aside a number of products or a budget (since Amazon charges a small fee per sale on Lighting Deals) dedicated to a Lighting Deal. Lighting Deals are a great way to jump-start sales for a certain product without going too in-depth with keyword search terms or PPC programs.

Coupons

Unsurprisingly, Coupons are one of the most popular Amazon ad forms on the platform, and they have one of the highest conversion rates of any campaign. Many consumers are comfortable with coupons both on and offline, and the Amazon version can help influence sales. Brands simply have to choose which products to add to a coupon, select the coupon amount (we recommend testing various dollar amounts or percentages to see what resonates with your audience), and then set your overall campaign budget. Since Amazon charges a fee per Coupon on top of your discount, Coupons can quickly become expensive, but they are a great way to entice new buyers who might not have heard of your products before.  

In order to truly thrive on the Amazon Marketplace, brands must have some sort of relationship with Amazon advertising. The SupplyKick team can help you navigate the world of Amazon ads – learn more and get started today!

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