The Amazon platform represents access to a massive potential audience for your products. It also creates access for a huge number of other sellers, many of whom might be your competitors.

Sometimes this means that you need to do a bit more to boost the discoverability of your products, especially when you’ve got new listings that haven’t yet had a lot of sales or traffic to them.

Amazon Sponsored Product campaigns are a great tool for increasing your visibility and driving valuable traffic to your listings. Yep, it’s “pay to play”, but if you’re a serious seller, you should be budgeting for some marketing spend anyway.

Let’s take a walk through of Amazon Sponsored Products and some best practices for using it effectively:

Get our mini guide with 4 tips for optimizing Sponsored Products here

How Amazon Sponsored Products work

Amazon Sponsored Products is a PPC advertising platform available to Amazon sellers through the marketplace. When a customer clicks on a Sponsored Products advertisement, they are directed to the product detail page for that particular product.

The ads are placed at the top, or within search results, as well as on product detail pages. One of the advantages of advertising this way is that you don’t pay any monthly fees, you only pay when someone clicks on your ad.

Sponsored Products ads work by being keyword-driven, so keyword choice is a big part of your setup. They are a great way to drive traffic to new or low-exposure ASINs, but note that they may not be a good strategy for you if there are multiple sellers of your product. When the customer clicks and is directed to the product detail page, they are likely to buy from the seller holding the Buy Box (as 90% of sales do), so if that’s not you, you’ve just paid for another seller to get a sale.

For anyone who is concerned about this possibility, Headline Search Ads may be an option for you (although you need to be a registered brand to use them). These ads will direct people to your own landing page for products.

Who can use Sponsored Products?

Here are the current conditions from Amazon that sellers must meet:

  • An active Amazon professional seller account.
  • For Headline Search Ads, enrollment in the Amazon Brand Registry.
  • Ability to ship to all US addresses.
  • Product listings in one or more of the available categories. Products must be new. Used products are not eligible for advertising.
  • For Sponsored Products, eligibility for the Buy Box. If you create a Sponsored Products ad for a product listing that is not eligible for the Buy Box, your ad will not display to Amazon shoppers. Ads that are not eligible are flagged in Campaign Manager under the Advertising tab in Seller Central. Headline Search Ads will be shown to shoppers regardless of who is winning the Buy Box.

The current “available categories” are shown below. Note that Amazon can change these at any time. For example, the Jewelry category wasn’t included for quite some time:

Tips for Sponsored Products campaigns

Sponsored Products ads aren’t just a matter of a few clicks and walking away. If you want to maximize your chances of success, you need to spend some time setting them up well. Here are a few tips to consider:

Campaign structure

Amazon offers you two options for structuring your ads; automatic targeting or manual targeting.

  • Automatic targeting – Amazon targets the ads to all relevant customer searches as they see fit. They derive the keywords through automatic selection and testing the categories, which makes it super important to make sure your title, bullet points, product description, and keywords are optimized.
  • Manual targeting – You get to manually set the keyword options for the campaign.

An obvious question is, which is the best structure for you to pick? That depends very much on what you’re aiming to achieve. Below is a summary of automatic vs. manual targeting so you can decide for yourself:

Automatic targeting Manual targeting
  • Amazon serves ads based on relevance to customer search, looking at the words you’ve used in your descriptions.
  • Audience will be very broad and there’s a good chance you’ll show up in irrelevant searches.
  • Default bids set at ad group level only.
  • You manually decide which keywords to target.
  • Audience will be very narrow and targeted, particularly if you’ve put some work into deriving your keywords.
  • Default bids are set at ad group or keyword level.

There’s no one “right” answer to the type of targeting to use, but if you are new to Sponsored Products, we’d probably run both types simultaneously and compare the results. An advantage to doing so is that, while manual targeting gives you higher control, automatic targeting can provide you with some good insights that you may not have considered before.

For example, you can go into the “Search Term Report” in Seller Central to find keywords that have converted. This is great data to have because it tells you the exact terms that buyers used to find your ad. (Note: If you have multiple SKUs in the same ad group, you won’t know which terms went with which product – more on that later).

For this reason, we’d keep automatic campaigns turned on all the time, while occasionally adjusting or creating new manual campaigns. The reports from automatic campaigns will keep delivering you valuable insights. You can then take those search terms that come up and use them to update manual campaigns.

Creating a conventional ad group structure

Let’s imagine you’ve created multiple ad campaigns and ad groups within those campaigns. If you don’t follow a conventional naming structure which allows you to easily see which ad is for what, you can easily end up in a tangle trying to sort them all out.

For this reason, we recommend that you choose some kind of simple naming convention for your ad groups and for your campaigns. For example, use the product name and “automatic” somewhere in the title for automatic campaigns, and “manual” in the title for manual campaigns. If you sell shoes, for example, your structure might look something like:

(Campaign Name): 2018 Running Shoes Automatic
(Ad Groups): Women’s Running Shoe, Men’s Running Shoe.

Another thing that can be helpful is to ensure that you have just one SKU per ad group. This helps you to get more precise results on your Search Term Report, as mentioned earlier. If you’re thinking “ugh, but I have too many SKUs,” Amazon recently introduced the ability to bulk upload campaigns and campaign changes via Excel spreadsheet. You can even have an assistant set these up offline in Excel, saving you even more time.

Keyword choice

For any manual campaigns that you run, you will have to set the keywords for the ad groups. If you have already been running automatic campaigns, you can obviously source some words from the Search Term Report, but you’re going to need to come up with others initially too.

We wrote a piece on keywords for product listings and recommend a similar process. The key is in understanding what a customer is likely to type into a search when they’re looking for a product like yours. Think; product type, brand, colors, sizes, gender, materials the product is made of and any distinctive features. It’s possible they may even type in a query for the job the product is used for, especially if they don’t know or can’t remember the product name.

Amazon itself can be a good tool to use – if you start to type a query into the search bar, it will come up with all sorts of popular searches. Just watch your ad results and be prepared to make changes to optimize them.

One such optimization is to add “negative keywords” to your campaign. This is telling Amazon not to show your ad for searches of those words. You can determine which negative keywords to use by examining your Search Term Report and looking for:

  • Words that received significant traffic, but didn’t perform well for sales.
  • Terms used that you don’t want to be associated with your brand or product.

Using negative keywords helps to reduce your ad spend so that you’re not wasting clicks on irrelevant words and helps to craft the impression you want of your product with a targeted audience.

Budget and bidding

You will need to decide on an overall daily budget that makes sense for the size and sales velocity of your business. You can set this either at the campaign level or at the account level. The key thing to remember is that if you’ve set an account level budget, ads across all of your campaigns will stop showing once that budget has been reached for the day. On the other hand, if you set your budget per campaign, at least your other product campaigns will keep running when one has reached its budget.

As for setting your bids, you need to consider them in proportion to your overall budget and according to how competitive the category is. Bids that get you onto page 1 of a search result will usually have to be above Amazon’s “bid range,” but you can start low, then adjust your bidding according to the results you’re getting (or not getting).

Optimize your Sponsored Product campaigns with our tips here

Final thoughts

Amazon Sponsored Products can be a good, cost-effective way to get more visibility for your new or slow products. This PPC strategy means that you only pay for the clicks you get, but you will have to do some work to optimize those ads and ensure you’re getting “good” clicks.

You can set these ads up fairly easily as long as you meet Amazon’s criteria. A good place to start may be with automatic ads so you can use them to gather more specific data.

However you choose to proceed, we recommend setting your campaigns up properly from the beginning, using a naming convention you can follow so that you don’t waste time making a lot of adjustments later on. Monitor the performance of your ads over time and make small tweaks as necessary to optimize.

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