As one of the biggest ecommerce events of the year, Amazon Prime Day is second only to the holiday sales season as the most important date in the calendar for online sellers.
Essential to your success on Amazon is making sure your products will be found by shoppers. If shoppers don’t find your products – they will not be visiting and returning to your online store.
This means your products need to show high on Amazon’s search rankings – a process over which you have little control in the short-term, as it relies in part on your having built up proof of good service and accumulated positive feedback over time.
Launched in 2012, Amazon’s Sponsored Products ads were designed to offer sellers a bid-based opportunity to improve their product and site search rankings; hence increasing visibility on the Amazon Marketplace, and driving traffic to their store. Sponsored Products ads are particularly helpful to new sellers, for products with little or no exposure, and to promote seasonal lines, unique items and new offers.
According to Amazon, global adoption of Sponsored Products grew by 100 percent among sellers in 2015, with the ads driving more than $1.5 billion in sales globally. During the holiday shopping season, clicks on Sponsored Products in the US increased 200 percent year-over-year.
Here’s how Amazon Sponsored Products ads could be helping you.
Why should you use Sponsored Products ads?
A number of reasons, but possibly the primary reason is the opportunity to increase visibility without having to wait for Amazon’s ‘organic’ ranking reward to accrue over time. Sponsored Products ads can help you to:
1. Increase traffic to your online store and hence also…
2. ..increase sales;
3. Leverage ‘buy box’ success;
4. As a result of (1) and (2), move up Amazon’s ‘organic’ SERP rankings and so increase visibility further;
5. Stand out in very competitive product categories;
6. Understand the effectiveness of your ad campaigns - with transparency into keyword performance, including how many times your ad was viewed and clicked - and how many customers went on to buy your product;
7. Secure a good adplacement position on the page: ads may appear below or to the right of search results, and as a display on detail pages.
Who can use Amazon Sponsored Products ads?
Amazon Sponsored Products ads can be valuable for all types and sizes of sellers/vendors (although automated campaigns have only recently been made available to vendors). As noted above, Sponsored Products ads are particularly helpful to new sellers, or to established sellers with new product lines.
How does it work?
Amazon Sponsored Products ad placements will only be displayed for product listings that are in the ‘Buy Box’. When they are clicked, they will lead directly to your product detail page.
Sponsored Products ads are keyword-based. Amazon offers two ways of targeting keywords: manual targeting, whereby you select the keywords for your products; or automatic targeting with Amazon matching the relevancy of the shopper’s query to your product information.
You bid for a keyword. When a customer searches for a product, Amazon evaluates the relevance of your product and your bid. If your bid ‘wins’, your ad will be displayed on Amazon.com, below or to the right of the search results. You will pay the bid amount only when shoppers click on your ad.
Once your campaign is under way, through Amazon’s Campaign Central, you have access to the details of search results which can be used to refine future advertising campaigns.
What will it cost?
Amazon levies a cost-per-click (CPC) fee; and it is down to you, the seller, to determine both the level of keyword bids and your daily ad budget for Sponsored Products ads. The minimum bid is 2p – though Amazon recommends bidding at 5p or more.
In terms of bid levels, there are several ways you can look at this. If you have many products to include in a Sponsored Products ad campaign, you could include all of them in an automatic campaign, setting a low bid price initially. By monitoring the results in Campaign Central to identify the ‘winners’ among your products, you might then choose to run manual campaigns for these, with higher bid amounts.
Alternatively – and particularly if you have a limited number of products in your ad groups - you could start with a more aggressive bid to ensure you ‘win’ a sufficient number of times to get some decent feedback on keyword results. After all, this is a valuable information gathering exercise too.
What do you need to do to run a Sponsored Products ad campaign?
- As a precursor, you should make sure your product listing page is up to scratch, with high-quality images, informative product descriptions and, most important, a number of positive reviews. Amazon buyers are so accustomed to factoring reviews into their buy/don’t buy decision that their absence really does have an impact. Also make sure that all the keywords you are targeting appear somewhere on your listing to emphasise relevancy.
- Create your first campaign. Incidentally, lots of information is available from Amazon here – including a number of useful ‘walk-through’ videos. Steps include:
- Setting a daily budget.
- Selecting a targeting type: manual or automatic. Note automatic targeting can be an excellent way to start as it saves you the effort of having to put in all of your own keywords. It can also be a great way to quickly test the most effective keywords for your audience, thanks to the information you get back from Campaign Central. For ongoing ad campaigns, however, you might want to refine the keywords yourself for manual targeting.
- Setting up ad groups (i.e. groups of similar products) with an appropriate name so they are easy to track over time as you run different campaigns.
- Setting your default bid. This is the maximum you are prepared to pay when someone clicks on your ad. You can see the average winning cost-per-click bids per category in Seller Central by way of guide.
- Start your campaign.
- Review performance regularly via Campaign Central – and adjust as required, depending on results.
Benefits of Sponsored Products ads
Amazon points out the following benefits of using Sponsored Products ads – provided, of course that you are fortunate enough to ‘win’ your bids:
- Good visibility: ads appear alongside the search results.
- Free ‘impressions’; you only pay when your ads are clicked.
- You reach buyers, not viewers, as highly relevant ads are delivered to targeted searches.
- You can make your products stand out on all Amazon marketplaces - and across any device.
- You can measure success and optimise your ad spend, courtesy of Sponsored Products reporting.
There is also some evidence to suggest that you could get an ‘organic ranking bonus’ while you are running Sponsored Products ads – possibly the result of the increase in visitors to your site and higher sales. This is definitely worth having!
So, if your products are not yet appearing as high in Amazon’s rankings as you would like them to – or if you want to get a toe-hold on the Amazon marketplace, then you should be seriously considering Sponsored Products ads as a ‘fast-track’ to help you achieve this.