Amazon is creeping up on Google and Facebook as an online advertising platform. According to eMarketer, Amazon will become the third largest online ad platform in the United States in 2018, generating $4.6 billion in ad revenue. Amazon’s online advertising market share is way behind Google’s and Facebook’s – but the trillion-dollar company is making strong moves to strengthen its services. In September, Amazon consolidated all its digital advertising services under one offering, Amazon Advertising, which provides the following products:
- Sponsored ads: sponsored products and brands.
- Display ads: reach audiences on Amazon sites, apps, devices and third-party sites.
- Video ads: showcase brand messages on Amazon sites, devices and third-party sites.
- Stores: create multipage brand stores within Amazon.
- Measurement solutions: gauge advertising impact across Amazon and third-party sites
- Amazon DSP: programmatic advertising solutions (formerly Amazon Advertising Platform).
These services have sparked a number of questions among advertisers, such as:
- What exactly are these services?
- How and why should an advertiser use them?
- Do they have any limitations?
- What’s the best way to maximize their value?
I’m going to answer those questions through a series of blog posts that focus on three products especially relevant to True Interactive’s clients: sponsored ads, display ads, and video ads. Today let’s take a closer look at sponsored ads.
1 What Exactly Are Sponsored Ads?
Sponsored ads are Amazon’s pay-per-click (PPC) advertising solution. They are available to sellers, venders, book venders, and Kindle Direct Publishing. Sponsored ads take a consumer directly to a product page or brand site within Amazon.
To reach customers, sponsored ads use keywords (either your own list or a list suggested by Amazon), products, and product categories for targeting. There are three types of sponsored ads:
- Sponsored products.
- Sponsored brands (previously headline search ads).
- Product display ads.
2 How and Why Would an Advertiser Use Sponsored Ads?
Sponsored ads should be used when advertisers want to drive sales and awareness while maintaining more control over budgets. Since sponsored products and brands ads only incur costs if they’re clicked on, it’s easier to see the return on investment of this ad type. Amazon recommends using sponsored ads to showcase offers, clearance items, seasonal offerings, and unique items.
How to Use Sponsored Products
Sponsored products are used to promote a single product and take the consumer directly to the product page. Additional creative such as images and text are not needed, making sponsored products the simplest ad to set up. Use keyword targeting to match products to a consumer’s search and show ads on the search results page or product detail page.
How to Use Sponsored Brands
Sponsored brands allow for multiple products or titles to be promoted together using a custom headline and logo. Consumers are taken to a product page if they click on a product, or to a designated landing page if they click on the image or ad text. Sponsored brands are good for driving awareness, in addition to sales. For example, advertisers can pair new or seasonal items with a related top seller in an ad to increase visibility in other product offerings. Or if a seller has multiple versions of the same product, say different versions of the same phone, using sponsored brand ads would showcase the variety available within a single ad.
How to Use Product Display Ads
Product display ads use relevant products, product categories, and interests to target consumers and show image ads within product detail pages, reviews, and merchandise emails. These are a great ad to showcase complementary or competing products. This ad format is also a self-service option and is specific to the individual ASIN (Amazon Standard Identification Number) of a product. Think of product display ads as a conquesting campaign, or as a last chance way to capture interest away from another product or brand.
3 Are There Any Limitations to Sponsored Ads?
The keyword targeting can be somewhat limited for sponsored products and sponsored brands. Although Amazon uses the same match types as other PPC platforms, the keywords must be relevant to the metadata on the product page. So, for example, if you’re selling toys around the holidays and want to boost holiday sales, it’s unlikely having keywords around “Christmas Toys” will generate impressions of your ads unless the product page metadata contains those words. But if you’re selling a toy specific to the holiday, then your ad more than likely will show.
In addition, for product display ads, due to the competitive nature of the ad format, it may be harder to generate sales unless the product has a great offer or discount attached to it. Since product display ads are only visible after a consumer shows interest in a related product, the offer has to convince the consumer that the product they were originally interested in is not as good of a product as in the display ad.
4 How Can Advertisers Maximize the Value of Sponsored Ads?
To maximize the value of sponsored ads, spend time to really think through which products and offers would make the most sense on this platform. For example:
- Putting up ads for a seller’s entire inventory all year round would probably not be a wise use of your money.
- Pulsing the ads on and off during seasonal or clearance sales and using a promotion or discount would be a better way to generate sales and to raise awareness of your products or store.
Knowing about the competition on Amazon is another way to increase the value of sponsored ads. If you sell unique items that someone may not know how to look for, do a quick search on what related items are already for sale on Amazon. Using that information, you can target those products and categories so that your product ads show up when people search for those items.
Although you also want to give your campaigns time to collect enough data to see what works and doesn’t work, Amazon Advertising isn’t a “set it and forget it” platform. Things can change quickly, and someone else can emerge with better offers or newer products. Updating promotions and switching out products regularly gives you a better chance at figuring out what works best for your inventory.
If you’re interested in Amazon sponsored ads, but don’t know where to start or need assistance strategizing and managing them, please reach out to us at True Interactive.
Watch our blog for follow-up posts on Amazon display ads and video ads.