Your Crash Course on Amazon Sponsored Products

Get ready to discover the power of Sponsored Products to drive sales and increase revenue

There are millions of retailers and branded manufacturers on Amazon, selling billions of products annually. It’s little wonder, then, that the marketplace giant is also the third largest digital advertising platform in the US. That means listing your products is just the first step. To succeed on Amazon, setting up the right advertising campaigns is essential.

That’s where Amazon Sponsored Products come in. These ads stand among the most powerful tools for increasing visibility and driving sales. If you’re looking to gain a competitive edge on the crowded marketplace, Sponsored Products can help you improve product visibility, target qualified consumers and, ultimately, boost revenue.

If you’re new to the platform, it can be difficult to know how to begin or where to focus efforts. That’s what this eBook is for. As the e-commerce leader managing $8.9 billion in GMV for more than 2,900 sellers, ChannelAdvisor has witnessed first-hand the huge difference Amazon Sponsored Products can make. We’ve seen what works — and can walk you through a framework for taking advantage of everything Amazon Sponsored Products has to offer.

Prefer the PDF version of this eBook? Download Your Crash Course to Amazon Sponsored Products PDF here

A Quick Introduction to Amazon Sponsored Products

For sellers who may not be familiar with the platform: Amazon Sponsored Products is a pay-per-click (PPC), keyword-based advertising program designed to promote individual listings and drive traffic to product detail pages. Because they’re shown to shoppers who are actively searching for terms associated with your product, these ads tend to generate high-quality clicks and can yield a much higher ROI than many other cost-per-click programs.

You can hand select your products and keywords, or you can use Amazon’s suggested keywords and then decide how much you want to spend on each campaign. Either way, the ads appear alongside or above organic search results based on the keywords you choose. You pay only when an ad is clicked and the consumer is taken directly to your listing.

In addition to tracking clicks, impressions and click-through rates, you can also analyze your advertising cost of sale (ACoS) by looking at sales and conversion data.

What Kinds of Results Can You Expect?

  • Greater visibility. Sponsored Products put your listings in places of prominence, with many opportunities to have them show up on the first page of search results
  • More sales. Reach highly qualified shoppers who are actively searching for the types of products you sell and are ready to buy
  • Less cost. Since you pay only when customers click your ads, it’s easy to measure ROI and then optimize ad spend based on your findings

How One Seller Boosted Sales 10% in 3 Months

When Ames Walker needed a way to increase visibility and boost sales, the company turned to Amazon Sponsored Products. Within three months of launching a strategic keyword campaign, the manufacturer’s sales were up more than 10% and averaged under a 6.5% ad spend. Within 10 months, Sponsored Products had produced over $100,000 in sales.

The Many Uses for Sponsored Products

One of the biggest benefits of Sponsored Products is the program’s versatility. These ads can be used in a variety of ways, such as to showcase:

  • New offers
  • New products
  • New models, colors and sizes
  • New features
  • Unique selections
  • Offers with low glance views
  • Clearance items
  • Hot sellers
  • Seasonal promotions

There are countless reasons to use Sponsored Products as part of your marketing mix — and it’s up to you to determine the strategy that makes the most sense for your business.

Did you know?

The average Advertising Cost of Sales (ACoS) for sellers using the ChannelAdvisor platform is 12.5%. If yours is higher, creating or fine-tuning an Amazon Sponsored Products strategy can help you get there.

Where Do Sponsored Products Show Up?

Amazon determines where your ads will appear based on both relevance and bid amount. You’ll first set up a bid for the maximum amount you wish to pay when a consumer clicks on your product. If your bid is competitive, you’ll have a better chance of showing up when an Amazon shopper searches for one of your keywords.

Below organic search results

Along the right trail

On the product detail page

Smartphone and tablet

In the mobile app

Top of the search result

Getting Started with Amazon Sponsored Products

After you’ve registered for Sponsored Products in the Campaign Manager section of Seller Central, you’re ready to create a campaign.

A campaign groups your ads under a common advertising budget and dates, and is made up of one or more ad groups for different ads and keywords. You could create a campaign for a certain line of products. Or you might want to design campaigns for specific seasons, special events or holidays. The key is to select a naming convention that will make it easy to manage your ads over time. Avoid generic campaign names like the plague. Quickly typing in “Campaign 1,” for example, will come back to haunt you when you’ve forgotten which products were added to what campaign. The more specific you get, the better.

When you set up your campaign, you’ll also be asked to select between automatic or manual keyword targeting. We recommend starting out small with automatic targeting and building up your keyword glossary and budget, then experimenting with manual keywords over time.

Keyword Targeting

To increase the likelihood that your ad will be shown, start by targeting an extensive list of keywords. To keep spending in check, you can also select negative keywords so that your ads only appear to relevant shoppers.

When you use manual targeting, you can select more match type options with keywords including broad, phrase and exact. Consider using automatic targeting when:

  • You’re not sure which keywords to use
  • You want to save time and launch new Sponsored Products ads quickly
  • Your manually-selected keywords aren’t generating the number of impressions and clicks that you want

Sponsored Products FAQs

ChannelAdvisor has been working side by side with retailers and brands for years on how to increase their visibility on Amazon. In our day-to-day collaborations with sellers, here are some of the common questions we hear about Sponsored Products:

What’s required to participate in Sponsored Products?

You must have an active Amazon professional seller account and the ability to ship to all U.S. addresses. Your products must be new and listed in one or more of the available categories. You must have listings that are eligible for the Buy Box.

Are Sponsored Products helpful if you’re the only seller for your ASINs?

Yes. You must have the Buy Box to win the bid. And if you’re the only seller, you’ll always have the Buy Box. Sponsored Products will help boost the ranking of your items by allowing you to bid on search terms that give you placement on the first search page on Amazon. Over time this visibility will drive traffic to those items, increasing the overall rank of your listing.

What are negative keywords?

Negative keywords prevent your ad from displaying for particular keyword phrases. For example, if you sell athletic shoes, you may want to add “dress shoes” as a negative keyword, since the person searching for dress shoes isn’t likely to buy athletic shoes.

Do you have any advice on how to structure ad groups?

A best practice is to build your campaign structure/ad group structure so it follows the structure of your website. Ad groups should keep tightly themed categories.

Any rule of thumb for setting a daily budget?

Start small. You can always add to your daily budget if you keep running out of money. This will allow you to control ad spend and ensure you’re seeing results as you spend.

What if I see that search queries that my ads are showing up for include ASINs that aren’t relevant to the product I’m sponsoring? What can I do?

In these instances, we recommend switching to a manual targeting campaign where the keywords that are getting the best conversion and are most relevant to your products are shown. This way, you’re using only keywords that accurately reflect the products that you’re selling.

When is a sale attributed to a Sponsored Product listing? Is it only when the customer buys the product during their current session? Or does the timeframe for attribution extend out for a period of minutes, hours, days, etc.?

Attribution is an order that takes place within seven days of a click.

How can you increase your click rate on Sponsored Products ads?

If you would like to increase clicks, you should start by increasing your bids. You may also want to add additional keywords and bid on those. Both of these efforts will help increase traffic, which can lead to more clicks.

Can I swap from manual targeting to automatic in the middle of a campaign?

No, once a Targeting Type is selected upon creation of a campaign, you can’t change it. You’ll need to create a new campaign and pause the old one.

Hypothetical example: A $30/day budget for 30 SKUs would be $1/day per SKU with a spend of $900/month. Is this correct?

That would be correct if your campaigns are built with one SKU per campaign. That would be the only way to limit spend at the SKU level.

Do keywords have to be within your product listing in the keyword field?

No, keywords in a Sponsored Products campaign are built out completely separate from any “keyword” labels you may have in your inventory. You can keep them the same or make them different.

How do you actually check your ROI from your ads?

There are many levers you can pull when evaluating the performance of your Sponsored Products campaigns. Using ChannelAdvisor Management & Reporting, you can easily filter your performance results to quickly see which keywords are outperforming your goals (and bid them up) as well as which keywords are costing too much and not converting (bid down or pause!).

It seems like there can be sales driven by these ads that aren’t accounted for if a customer clicks on the ad, doesn’t buy at that moment, but returns to buy later. Have you noticed this, and do you have any statistics related to this phenomenon?

Sure. This is called latency. Amazon captures these orders as well. We mirror Amazon’s UI and pull the report that Amazon used to attribute orders within seven days of the initial click. Seller Central has additional attribution models in the Campaign Manager Report that break down orders within one day, seven days and 30 days of the initial click.

Are there any tools to save time when managing ads for hundreds of different SKUs?

ChannelAdvisor sellers now have access to a platform feature that automatically manages the ads included in a specific ad group. As products meet filter criteria defined by the seller, these products are automatically added to an ad group or un-paused, saving time in the creation and pausing of ads. Ads that no longer meet the criteria will be paused.

Advanced Strategies for Sponsored Products

When setting up your Amazon Sponsored Products campaigns, an automation tool can be incredibly valuable for bidding, making bulk changes and more.

Automated Bid Management: Advanced automation features can be used to launch or pause ads based on your goals. When you need to generate high-volume sales and increase Buy Box potential, you can use one set of automation rules to optimize bidding for a greater return on ad spend (ROAS). At other times, when higher profit margins are the goal, a different set of rules can be put in place to boost your cost per order (CPO) or advertising cost of sales (ACoS).

Dynamic Bidding: If you use an e-commerce platform like ChannelAdvisor, you can use dynamic bidding to get even greater returns on your Sponsored Products investments. Dynamic bidding lets sellers raise or lower bids based on what’s happening in real time: When Amazon deems an ad is less likely to convert to a sale, bidding is adjusted down. When the likelihood of a sale is high, bidding goes up.

Then, as soon as you get comfortable with Amazon Sponsored Products, it’s time to move on to more competitive strategies. Use these resources for a step-by-step look at advanced strategies such as search term mining, product targeting and dynamic bidding:

Your Ultimate Guide to Advanced Amazon Advertising

The Big 3: Advanced Advertising Strategies for Amazon, Facebook & Google

What Else Can You Do with Amazon Advertising?

Amazon Sponsored Products is one component of Amazon Advertising. Other options include:

Sponsored Brands: These keyword-targeted, cost-per-click, banner-style ads appear above Amazon search results and drive consumers to a wider array of your brand’s product lines.

Product Display Ads: Product Display Ads are cost-per-click ads that can show up in different areas — along the right rail, at the bottom of search results, on product detail pages, in Amazon generated marketing emails and even on customer review pages. These ads are relevant to buyers looking for specific product pages, as opposed to those scrolling search results on Amazon.

Amazon Coupons: Amazon Coupons is a self-service tool that lets you create compelling promotions in the form of digital coupons that show up in search results. Coupons can be used to offer discounts as either a percentage or set dollar amount, and can be targeted to select customer segments.

Getting Ahead on Amazon

Amazon is an essential component of virtually every brand and retailer’s e-commerce strategy today. But with a marketplace this competitive, it’s easy for your products to get lost among the millions of other items for sale. Contact us today to see how ChannelAdvisor can help optimize your Amazon Sponsored Products for more sales and revenue.

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Want to ensure you’re getting the highest returns possible on your Amazon Sponsored Products? Let ChannelAdvisor’s digital marketing experts conduct a complimentary audit to analyze your account for missed opportunities.

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