Are you interested in utilizing Amazon’s Sponsored Products to drive paid traffic to your listing, improving your sales velocity? Advertising on Amazon is a crucial part of your selling strategy. Having a profitable campaign run with a decent return on investment can be the main driver towards higher overall sales.
Table of Contents:
- Campaign types and definitions
- Sponsored Products Overview
- Creating your first Sponsored Products Campaign
Speaking to many medium and big size brands selling on Amazon daily, we learned there are several misconceptions for new sellers on Amazon. This post includes aims to help beginners and new advertisers on Amazon with step by step illustrations guiding you towards creating your first Amazon Sponsored Product campaign.
Campaign types and definitions
Amazon has the following pay- per-click campaign types available for its sellers:
- Sponsored Products
- Sponsored Brands
- Display Ads (not available to all sellers yet – still in beta phase)
This post focuses on Amazon Sponsored Products as the most commonly used campaign type, with over 70% of total Amazon spend going towards it.
Sponsored Products Overview
Sponsored products are keyword targeted pay per click campaigns, helping sellers get extra traffic on their product listings. There are 2 types of Sponsored Product campaigns available:
- Automating Targeting Sponsored Product Campaigns
- Manual Targeting Sponsored Product Campaigns
When creating an Auto targeting sponsored product campaign, sellers leave the targeting up to Amazon. Amazon targets keywords and products that are similar to the product in the ad.
When creating a Manual targeting sponsored product campaigns, sellers choose keywords or products to target shopper searches and set custom bids.
Creating your first Sponsored Products Campaign
The creation of a Sponsored Product campaign includes the following sections:
- Campaign Settings
- Bidding Strategy
- Ad groups
- Negative keywords
In the “campaign settings section you set your campaign name, portfolio the campaign would belong to (not necessary), Start and End date (leave the end date empty unless this is a holiday or deal-specific campaign), daily budget and targeting (Auto or Manual).
The daily budget is the maximum amount you are willing to spend per day to keep the campaign running. As per Amazon’s tool tip, most campaigns with a budget over $30 run throughout the day.
Campaign Bidding Strategy
The campaign bidding strategy setting has 3 predefined options:
- Dynamic bids – down only
- Dynamic bids – up and down
- Fixed bids
We strongly recommend using the dynamic bids – down only option until you get more experience managing your Sponsored Product campaigns. This means your cost per click will be equal to the bid you’ve set, or lower. Amazon will lower the bids in real time when the ad is less likely to convert to a sale.
Ad Groups & Products
An ad group is a group of products targeting the same keywords within a campaign. Ad groups are used for improved organization of products you are advertising. Amazon recommends grouping products based on their category and price range.
We strongly recommend using 1 parent SKU per Ad Group. This gives you more control over bidding for that product in the long run, since the changes in bid made on an ad group level will affect the targeting for that parent SKU only.
When working with Manual campaigns many Amazon sellers create an ad group for each match type Amazon offers for its keyword targeting: Broad match, Phrase match and Exact match. This means a manual campaign would have 3 ad groups all containing the same SKU in them but targeting keywords with different match types. As a rule of thumb, the broad match type ad group would have the lowest bid, and the exact match type would have the highest. We will talk about match types a bit later in this post.
After you have created an ad group you can scroll below to select the products from your inventory you want to add to it, as illustrated in the image above.
A bid it the maximum amount you are willing to pay for a click on Amazon. In reality, you will end up paying less in most cases. Every time a customer searches on Amazon a mini auction takes place where Amazon’s algorithm charges you only one cent more than the second highest bidder entering an auction (search query) with you. For example, if you are bidding 1.50 for a certain keyword, and the second highest bid from another Amazon seller is 1.00, you will pay 1.01 for a click.
On Amazon, bids are set on an ad group level. A $1 bid on an ad group level will mean every keyword in that ad group has a default bid of $1.
When you need to get more granular, bids are set on individual keywords / targets / categories within a given ad group.
Optimizing your bids frequently is the very foundation of optimizing your advertising campaigns. Monitor your bids your bids and cost per click levels. Adjust them in accordance to your ACoS goals per keyword / product.
As we mentioned previously, Amazon’s auto campaigns will target products and keywords which are similar to the product are advertising. In essence, Amazon will take care of the targeting for you.
For Manual campaigns however, you have greater control over the targeting your campaign will use. In Manual campaigns you can target:
- ASINS (Amazon Unique Number Identifier)
You’d like your ads to be displayed on.
Note: Both individual product targeting for both individual products and categories you want to target.
Keywords included in your product’s title, bullets, description, keywords included in these fields on competitor listings, or converting search terms (keywords or ASINS) from your Auto Sponsored product campaigns are great candidates to be included as targets in your Manual campaigns.
When it comes to keyword targeting, Amazon offers the following match types available:
Keyword match types allow you to fine-tune which customer searches trigger your ads.
Broad: Contains all the keywords in any order and includes plurals, variations and related keywords.
Phrase: Contains the exact phrase or sequence of keywords.
Exact: Exactly matches the keyword or sequence of keywords.
Negative keywords prevent your ads from displaying when a shopper’s search terms match your negative keywords. You can exclude irrelevant searches, reducing your advertising cost. This allows you to fine tune your campaigns even further, by trying to think ahead and identify keywords which customers would click on, but are not really relevant to your product. An obvious example would be: adding a negative exact keyword “blue socks” if the product promoted in your campaign is “red socks”.
Negative keywords are not mandatory in any campaign type in Amazon.
That is it! If you followed this procedure step by step, you have now created your first Amazon Sponsored Products Campaign!