Starting your business on Amazon is nice and all until you realize the fierce competition you have. To get ahead of your competitors and reach your audience, you must make yourself stand out from the crowd.
An easy way to do this is through advertising. But how to advertise on Amazon?
A question that doesn’t have a simple answer. There are many ways to achieve your goal, and in this article, we aim to have a look at all of them and teach you all you need to know about promoting your listings on the marketplace.
What is Advertising on Amazon?
Advertising on Amazon is a service created for the sellers by the marketplace. The purpose of these advertising solutions is to let sellers reach and engage with their customers during the various stages of the shopping activity, from awareness to purchase.
When you decide to advertise on Amazon, you can rest assured that all your ads will get exactly where your audience can see them. Namely, on the first page of the search results and in the product detail pages.
The method Amazon uses is simple. Each seller has the opportunity to place bids on keywords or products, then create relevant ads. If your ad is considered relevant and you’ve placed a winning bid, your ad gets displayed to the shoppers.
To increase the opportunities for sellers to get out from anonymity, Amazon proposes three advertising solutions:
- Sponsored product ads
- Sponsored brand ads
- Store ads
We’re going to explain each method in detail in a few moments, but right now, maybe you’re wondering why should you bid on Amazon ads rather than using alternative channels, such as Google or social media, to bring awareness.
The reason is simple. Amazon brings the following advantages:
- Targeted ads directly on the marketplace: Amazon has a sole purpose. That of determining shoppers to buy. When people get on the marketplace, they are – in effect – ready to buy. That’s why Amazon ads can help you reach the right customers who are already looking to buy the same products you’re selling.
- Instant visibility on the marketplace: Perhaps you’re not the No.1 seller in your category, and maybe your listing shows up on the fifth page in the search results. Do you know what this means? That most shoppers will never know you’re there, as really few of them scroll past page two. Yet, advertising on Amazon means instant visibility and a potential boost in sales. Through this, you’ll achieve a better position in the search results, and soon, you’ll be on the first page, so you won’t have to pay for ads any longer.
- Cost control: Another nice thing about advertising on Amazon is that you’ll be able to pay only for the clicks your ads receive. Indeed, Amazon uses a pay per click (PPC) system that won’t charge you if the shoppers don’t click on the ad. You can also access campaign reports and check the ad performance so that you can have a thorough cost control on your campaigns.
Different Types of Amazon Advertisements
As we mentioned above, Amazon allows sellers to access three types of advertisements. Let’s have an in-depth look at each of them.
Amazon Sponsored Products
Sponsored Products ads are ads designed for individual product listings. They are a great choice if you have a single product you want to sponsor, and they appear on the top of the first page in the search results, as well as on product detail pages.
Due to their high visibility, these ads are very likely to attract customers who are already interested in buying a product similar to the one you’re selling. Needless to say, they increase product visibility and help you drive sales.
These campaigns have a pay per click cost. You can decide how much you want to bid (aka, how much you want to spend for a click), and can also choose your budget. Advertising costs are then deducted from your account automatically, and you’re only charged when your ad receives clicks.
Setting up a Sponsored Product campaign is very easy, from your Seller Central account.
Simply choose the product you want to advertise, set the budget (recommended at least $10 per day), and choose between automatic and manual targeting so that you can start to bid on keywords or products.
While the automatic feature makes it easier to get started for newbies, manual targeting gives you more control over the campaign.
Sponsored Brands (previously called Headline Search Ads)
If you’d rather advertise your whole brand rather than a single product, the Sponsored Brands advertising is by far your best bet. This type of advertising allows sellers to raise brand awareness and gain more customers.
The ads are displayed on top of the search results page, and shows much more than a sole item.
With this option, you have the opportunity to feature your brand logo, create a custom headline, and feature up to three products.
In terms of campaign settings and fees, this method is very similar to the Sponsored Products one.
You can decide which keywords to target and how much you want to spend per bid. You can also choose where you want to drive traffic, either to your store page or to a product listing page that features a selection of your products.
Obviously, you’ll have full campaign control, and you can change your budget every day.
If you’re looking for a free advertising method, Amazon allows sellers to create a store. Thanks to drag and drop tools, these multi-page shopping destinations for individual brands let you showcase your products and brand story.
You don’t need any website building experience to set up a store on Amazon. Simply use the pre-built templates and dynamic widgets to create your store page.
This service has no fees, and your prospective customers can easily see your entire offering.
Product Display Ads
The fourth and last method to advertise on Amazon is with product display ads. This method is not reserved for Amazon sellers. Indeed, anyone can buy display ads as long as they are ready to spend a minimum of $35,000.
Although more expensive than the other methods above, Product Display Ads gives you the possibility to customize your brand and product message in any way you want.
Powered by Amazon DSP, they give you the possibility to choose from a variety of formats designed for various audiences, and you can even promote these ads on websites others than Amazon.
A few opportunities include apps, other marketplaces, and even on devices through push messages.
In this way, you can reach a relevant audience in multiple ways, and can even direct potential sellers exactly where you want, either on your Store page or on a product listing, depending on your purpose.
How to Get Started with Amazon Advertising?
By now, you have probably decided which is the right type of advertising for you. Getting started is not hard, but there are a few steps to keep in mind. Let’s have a look at them:
Step 1 – Check your eligibility
If you’re a seller on the marketplace, perhaps you think that you can get started immediately. However, you should check the eligibility criteria, as not everyone can advertise on Amazon.
To be eligible, you have to:
- Have an active professional seller account. Individual accounts are not eligible.
- Be able to ship to all US addresses, including remote areas and islands.
- Your products must be listed in eligible categories. You can find out which these categories are directly from your Seller Central account.
- The products you want to advertise must be eligible for the Buy Box.
Step 2 – Define your goals
In its general understanding, advertising is used to drive sales. However, you might have other goals, and establishing them is important before investing in your campaign.
A few goals can include:
- Building brand awareness (a Sponsored Brands campaign is more appropriate in this case)
- Improve sales for low-performing items
- Clear your inventory
- Drive sales for a new product
- Generate reviews for new products
Establishing goals upfront can help you measure performance and ensure that the campaign is really yielding the desired results.
Step 3 – Choose the right products to advertise
Unless you want to clear your inventory, it is essential to choose a high-performing product(s) for your campaigns. To do this, log into your Seller Central account and sort the items by Buy Box Percentage in the Business Reports tab.
Then, pick the ASINs most likely to win the buy box, ideally those with a possibility of 90% or higher.
Otherwise, your competitors might create stronger ads then you, and they’ll win the chance of being displayed on the search results page instead of you.
Also, make sure that the products are in stock before advertising them. The thing is, if your products aren’t winning the Buy Box or if they are out of stock, your ads won’t be displayed.
Step 4 – Optimize your listings
Your product listings won’t have an impact on advertising, but they will determine conversions. If you want to sell your products, make sure your listings are visually appealing and that they can inspire trust.
A few things to check include:
- Descriptive yet accurate titles
- Relevant and useful product information
- Relevant and useful bullet points
- High-quality images detailing all sides of the product and packaging
- Quality videos, if needed
Step 5 – Decide your bid amount and maximum budget
Now, decide how much you want to spend on your campaign. Set a bid amount as well as a maximum daily amount that shouldn’t be less than $10 if you want to have success.
Know that you only pay when your ad is clicked, and for a positive return, the most important thing is to make sure your listing is stellar.
How to Make the Most of the Amazon Advertising?
As you’ve seen, setting up an advertising campaign on Amazon is easy. Making the most out of it, however, might not be as straightforward. Here are a few things that could help you.
Focus on profitability
Deciding which products to advertise is often a challenge, but you can analyze the product-level profitability to see which products have the highest and lowest profit margins.
Once you know that, it’ll be quite easy to figure out which are the best products to advertise.
Learn and use the Flywheel effect
The Flywheel effect refers to the concept of using paid advertising to generate earned media and drive overall growth. In simple words, earned media refers to reviews, page views, and orders.
The concept is simple. Paid ads drive traffic to your sponsored products, boosting their position in the search results.
This increases the likelihood of earning the Amazon Choice designation, which draws more attention than a sponsored item.
If you want to capitalize on using this method, the secret is in checking your total revenue, gross profit, and total advertising costs of sale to determine the success of your campaign.
Reduce wasteful ads by using negative keywords
When creating Amazon listings, negative keywords are those keywords for which you don’t want to rank. It works in the same way when building your ads.
You can build a list of negative keywords customers are not searching for and exclude them altogether when creating your ad, so you won’t have to pay for too many clicks that don’t turn into sales.
Ultimately, the secret to building a successful campaign is to be flexible. Optimize your ads, change your bids, and increase the maximum daily amount if necessary, to generate the desired return.
Think out of the box and acknowledge that once you’ve earned the buy box, a first-page position in the search results, or the Amazon Choice designation, it will take a far lower investment to achieve stellar results and grow your business.
How to advertise on Amazon shouldn’t be a mystery anymore. Now, all you have to do is decide which type of campaign is the right one for you, set it up, and start enjoying the benefits of targeted advertising.
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