Advertising is a necessary part of selling on Amazon. With more than 2.5 active sellers and counting, it’s not enough just to be on the platform. Today, it’s all about standing out from your competition. This means driving traffic to your product detail pages and converting shoppers into customers. Data shows that more brands are figuring this out. According to eMarketer, Amazon claimed 10.3% of the U.S. digital marketing spend in 2020, up from 7.8% in 2019. Google and Facebook still lead the pack, but Amazon is catching up. Reports indicate Amazon’s advertising business is on track to generate $20 billion this year, a 27% jump from 2020.
The Benefits of Amazon Advertising
Amazon Advertising (formerly called Amazon Marketing Services) has become a popular tool for ecommerce brands for many reasons. First and foremost, people shop on Amazon – a lot. About 2.5 billion customers visited the retail marketplace in June of 2021, according to Statista. Second, its broad selection of marketing levers enables brands to target their precise audience on a massive scale and in a variety of ways. It’s also easy to get started. While there is a lot to know about Amazon Advertising, creating your first campaign is relatively simple. More on this in a bit. For now, the primary benefits to advertising on Amazon include the following:
- Reach Millions of Customers
Target customers searching for products like yours on the largest ecommerce marketplace in the U.S.
- Ad Solutions for Every Budget
Choose the budget that’s right for your business. You decide how much you want to spend. Just $10 a day can help increase sales.
- Quick and Simple Execution
Create and launch a campaign in as little as 5 minutes. Amazon ads are designed for everyone, meaning you don’t need any advertising experience to launch a campaign (launching a successful campaign is another matter).
Types of Amazon Advertising
Amazon has expanded its suite of marketing tools over the years, with new features and product launches announced all the time. Below is an overview of the most popular ad types on Amazon:
Sponsored Products: A cost-per-click, keyword-targeted advertising solution that enables you to promote the products you sell with ads that may appear in highly visible placements on Amazon.
- Improve visibility of individual products
- Appear in shopping results and on product pages
- Feature products relevant to shopping queries
Sponsored Brands: Keyword-targeted banner ads that appear in shopping results on Amazon, allowing brand owners to promote multiple products or titles with a custom headline and logo within the ad creative.
- Boost brand awareness
- Appear in shopping results and on product pages
- Feature custom headline, brand logo, and multiple products
Sponsored Display: A self-service display advertising solution that helps businesses reach relevant audiences both on and off Amazon.
- Further extend your reach
- Appear on and off Amazon
- Engage audiences on and off Amazon who are in the mindset of browsing, discovering, or purchasing products
Stores: A free self-service tool that allows registered brands to design their own Amazon storefronts.
- Inspire customer loyalty
- Multi-page brand destination
- Feature your product portfolio and tell your brand story
Amazon Demand Side Platform (DSP): The software that is used to access digital advertising inventory. Amazon DSP offers both self-service and managed options.
- Reach audiences on and off Amazon
- Enables advertisers to programmatically buy display and video ads
Video Ads: Branded video ads that appear either before or in the middle of Amazon streaming content like IMDb TV, Amazon Publisher Services broadcaster and network apps, live sports, Twitch, and the News app on Fire TV.
- Showcase your story
- Engage audiences across Amazon subsidiaries
Custom Ads: Tailor-made campaigns that engage consumers at multiple stages of the marketing funnel, building brand awareness, consideration, and conversion.
- Deliver your unique message
- Created by the Custom Advertising team based on your goals
Audio Ads: 10-30 second ads that play periodically during breaks between songs on Amazon Music’s free ad-supported tier.
- Go beyond the screen
- Access unique inventory
Defining Your Amazon Advertising Goals
Before you create your first campaign, it is important to know what business goals you want to
accomplish. Establishing your goals upfront will help you choose which products to advertise and how to structure your campaigns. The following are the most common goals for Amazon advertisers:
- Drive sales of a new product
- Generate traffic to your product detail pages
- Improve sales of low-performing products
- Clear inventory
- Increase brand visibility
- Increase new-to-brand customers
Determining What Products to Advertise on Amazon
Not every product is a good fit for Amazon Advertising. For example, products need to win the Buy Box for your ads to display. To win the Buy Box, items must be in stock and priced competitively.
You also want to select products that are winning the Buy Box at the highest rate – ideally 90% or higher. You can find this information under the ‘Reports’ tab in Seller Central. Click on ‘Business Reports,’ and under the section labeled ‘By ASIN,’ click on ‘Detail Page Sales and Traffic by Child Item.’ Here, you can sort by ‘Buy Box Percentage’ to find your best-performing ASINs. It’s best to look for a high Buy Box percentage paired with a high number of sessions to the product detail page.
Other factors to consider are profit margin, product detail page optimization, and search traffic volume. To run a profitable Amazon Advertising campaign, you want to promote high-margin items with heavy search volume that have high-converting detail pages.
Starting with Sponsored Products Campaigns
Sponsored Products are often the first ad type that brands choose when getting started with Amazon Advertising. According to CNBC, Sponsored Products accounted for 73% of Amazon ad spend for retailers in Q2 of 2021. These cost-per-click ads promote individual product listings by appearing where customers will see them when searching on the marketplace, such as the first page of shopping results.
Sponsored Products allow advertisers to choose their budget, bids, and targeting parameters. This helps brands of any size reach a wide variety of goals, including generating awareness of a new product, promoting seasonal items, clearing excess inventory, or showcasing best-selling items. These ads are available for professional sellers, vendors, book vendors, Kindle Direct Publishing (KDP) authors, and agencies.
Sponsored Products are one of the easiest Amazon ad types to launch. To get started, just follow these steps:
- Pick Your Poduct(s)
Help create demand for new items or give your bestsellers an extra lift. Choose similar products to advertise in your campaign, and make sure they’re priced competitively enough to win the Buy Box.
- Give Your Campaign a Name
Keep it straightforward so you can easily find it later.
- Set the Budget You Want
Just $10 a day can help you get clicks and sales.
- Choose Your Duration
Amazon recommends running campaigns for at least 8 weeks to generate accurate data.
- Select Your Targeting Type
You can configure your targeting manually or let Amazon do the work. With automatic targeting, Amazon will target keywords and products similar to the one in your ad. Enter one bid and you’re done.
The Important Relationship Between Amazon Advertising and Product Detail Pages
The purpose of Amazon Advertising is to drive traffic to your products. It’s up to your product detail pages to convert sales. Shoppers cannot inspect items on Amazon the way they can in brick-and-mortar stores. Instead, they rely on the information you provide. The quality of this content will have a direct impact on your conversion rate. Follow these best practices to create optimized product detail pages that work together with your advertising campaigns to drive sales.
- Amazon Product Titles that Drive Traffic
The product title is the first thing shoppers see when they visit your product page. It’s also the most important. Product titles should be clear and descriptive. Amazon uses the words in product titles to display your products in search results. Always include your primary keyword at the beginning of your product title. You also want to include other relevant keywords, but don’t overdo it. Keep your product titles around 200 characters.
- Amazon Product Bullet Points That Increase Desire
The second most important part of your product listing is the list of bullet points. This is where you describe the unique features and benefits of your product. Include as many bullet points as possible. Most categories allow five. Strong bullet points highlight the product’s features and benefits with clear, honest language.
- Best Practices for Amazon Product Images
Many sellers underestimate the importance of product images on Amazon. Compelling product images give customers a better sense of what they will receive. Amazon allows seven images for each product detail page. Your images should showcase as much information about your product as possible. This can include different angles, infographics showing benefits and features, size and dimension charts, and lifestyle images that show your product in real-life situations.
- Using Videos to Optimize Amazon Product Pages
Nine out of ten shoppers say product videos are helpful in the decision process, according to HubSpot. Including videos on your Amazon product pages is a powerful way to increase conversions. Like copywriting and graphics, Amazon product videos should showcase the product in a way that builds purchase intent.
Channel Key Takeaway
When used effectively, Amazon Advertising can unlock enormous sales growth for your brand. This article provides a basic overview of how Amazon Advertising works, but there is much more to understand. Successful campaigns need constant monitoring and regular adjustments to ensure they are performing. Most of all, they require accurate analysis. Metrics like impressions, clicks, Advertising Cost of Sale, Return On Ad Spend, and Total Advertising Cost of Sale help you understand what is working and what is not. This takes time and experience. The good news is that Amazon’s platform levels the playing field for most competition. With the right marketplace strategy, smaller brands can compete against much larger brands.
This is due not only to Amazon’s enormous customer base, but also the power and targeting capabilities of its advertising platform. Together, they provide any brand the opportunity for unlimited sales potential.
ABOUT CHANNEL KEY: Channel Key is a full-service channel management marketplace consulting agency that has helped generate nearly $500M in Amazon sales for brands worldwide. Complete 360-degree services include marketplace strategies, content development, marketing and advertising, catalog management, marketplace and fulfillment setup, and ongoing consulting. To learn more, visit www.ChannelKey.com.
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