How to Advertise on Amazon And The Difference Between Each Type Of Ad

How To Advertise on Amazon?

Today Amazon Ads business is currently generating $7 billion a quarter in revenue and will continue to accelerate growth as estimated in 2021. This growth can be seen thanks to the increasing amount of users using the online marketplace. It was reported last year that there were over 300 million users and that there are 80 million Americans that are prime users. With that being said, the possibilities that come with using Amazon Ads appear very promising. However, how will you know who to target and what is the best way to advertise on Amazon? Amazon currently  provides sellers with multiple ways of interacting with potential customers. With all the various avenues to take it can be overwhelming on knowing where to even begin. Here, we will explain how to begin advertising on Amazon and the different types of ads available at your disposal.

What are Amazon Ads?

We will start by answering the question – what even are Amazon Ads? Amazon Ads are similar to how google and other search engines work. When you type in a keyword or phrase the most relevant results will show. You will also see at the top of results products that say sponsored  or ad next to them. Advertisers will pay to gain visibility by paying for these top positions by bidding on specific keywords. When a shopper clicks on this ad, the advertiser will then be charged for the click by Amazon. Product ads can also appear elsewhere too. Ads can be seen on product pages, as well as other Amazon owned websites. Now that we have established what Amazon advertising is, let’s now take a look at the possible options for advertising on Amazon and how they each work and cost.

Sponsored Brands

Sponsored Brand are a PPC advertising model. These ads show your brand along with up to 3 products. They appear above search results, to the left of search results, and below. When a shopper clicks on your ad, amazon will charge you for it. You don’t have to pay to display the ad, but pay for it when a user clicks on the ad. The focus of sponsored brands is on the keywords used to gain clicks. You will choose relevant keywords to bid on for your product. To bid on keywords Amazon features manual and automatic bidding. Automatic bidding is done autonomously by Amazon but they will only lower your bid, they will not increase your bid. If you choose manual bidding, you will have to adjust the bids of individual keywords yourself. A good practice for sponsored brands is to start with automatic bids to let Amazon learn the most relevant keywords and then once those are found you have a good base to manually adjust these keywords accordingly.

How Much Do Sponsored Brands Cost?

Amazon requires a minimum daily budget of $1. That being said, for a new campaign you should look to have it run for at least a month and to expect to spend around $50 a day. If you do not spend much on the campaign you are not expecting to make much sales as you will run out of money in your budget very quickly. Amazon very much follows a “pay to play” model and you will see results quicker the more money you put into your campaigns. You should make sure to be realistic about your campaigns. Do not expect to run one campaign and make a million dollars. These campaigns take time and effort to be run successfully and you begin to see success if you correctly bid on relevant keywords consistently. 

Sponsored Products

Sponsored product ads are pay-per-click (PPC) advertising that promotes one product. These ads appear on the right and bottom of search results, as well as on product detail pages. You can tell that these are sponsored products because they will say Sponsored either at the bottom corner of the product image, or next to the title of the product. Similar to Sponsored Brands, you only pay when a shopper clicks on your sponsored product and you can manually or automatically target keywords that are relevant to your target audience. Sponsored Products are the most often seen ads due to their prime location. These ads are great for attracting your target audience and encourage shoppers in the final stages of the buying process to purchase your product.

How Much does Sponsored Products Cost?

Again Sponsored Products follow similar costs as Sponsored Brands. Amazon requires a minimum daily budget of $1, but to be successful you should look to set a budget of around $50 a day. The majority of your daily advertising budget should look towards Sponsored Product Ads because you can reach shoppers as they research for potential products to purchase. For best results you should look to start with automatic keyword targeting for your campaign to learn what are the best relevant keywords for your product. From there you can switch to manual targeting to hone in on your budget and adjust your bids yourself. You should also look to add negative keywords to your sponsored product. Negative keyword targeting will prevent amazon from displaying your ads to low converting keywords.  

Sponsored Display

Sponsored Display ads are another PPC tool to promote your product like sponsored brands and products, but instead of focusing on keywords, Sponsored Display ads target shoppers based off their interests. This targeting allows you to reach shoppers based off of similar interests to your product, or category. Sponsored Display ads appear on Amazon’s related product detail and customer review pages but they also appear off site unlike Sponsored Brands and Products. These ads can also be seen on Amazon websites like IMDb, Amazon devices like Amazon Fire TV, and Amazon Demand-Side Platform (DSP). With Sponsored Products you have the ability to reach a much wider audience than the other previously mentioned ad types. 

How Much does Sponsored Display Cost?

On the surface Sponsored Display is similar again to Sponsored Products and Brands as it requires a minimum daily budget of $1. However, sponsored display doesn’t rely on keywords to target your audience but an array of factors contribute to reaching potential shoppers. For example if you are looking to target in a very competitive category the cost-per click will be much more than a niche market that is not as competitive.

Overall the different types of advertising available are very similar but provide differences that can help you grow your sales. A blend of the three different ad types along with a containing focus on optimizing these campaigns over an extended period of time will help drive consumers towards your products and increase your overall sales.