In three years’ time, Amazon could take as much as 14% of total US digital ad sales, up from 9% in 2019. While nowhere near as large as Google or Facebook, Amazon is growing. It’s rapidly becoming the go-to retail site for shoppers who are both browsing and ready-to-buy. Amazon converts at a rate 6x higher than the next top 10 retail sites in the US. If you want to succeed on Amazon, and in ecommerce more generally, Amazon advertising needs to be part of your strategy.
Advertising on Amazon is also important to improving your products’ organic search ranking. Sales generated by ads improve the sales history of the product. If a product has a strong sales history, it is placed higher up search results ranking. So your conversions due to ads will aid your conversions due to organic search results.
In eCommerce, the sales journey (or funnel) is not necessarily a straight line, and consumers go through multiple online channels and decision processes before completing their purchase. The challenge is to keep products in front of the potential customer throughout their journey.
Amazon pay-per-click (PPC) ads have been traditionally focused on product keywords (Sponsored Products and Sponsored Brands) with display advertising being provided via Amazon Advertising. However, in September 2019, Amazon announced the Beta launch of a new ad type: Sponsored Display Ads.
According to Amazon, this new ad type replaces what was known as Product Display Ads. The most notable feature in the new ad type, while retaining the main structure of Product Display Ads, is its ability to retarget Amazon shoppers and drive them back to product detail pages.
Amazon PPC ads have traditionally appeared on a results page when consumers enter a search query. They are identified by the word “sponsored” near the product ad. Sponsored Product Ads and Sponsored Brand Ads target keywords. A great deal of time can (and should) be spent honing these keywords, ads, and bid prices to win more sales. We have written extensively about search term optimization, check that out if you want to learn more.
Such ads, when optimized, will drive customer traffic to product detail pages creating a virtuous circle: more traffic produces more sales, which leads to more reviews, which means the product shows up organically — which leads to more traffic and more sales.
What are Sponsored Display Ads?
The key difference between Sponsored Display and the Sponsored Product/Brand ads is that Sponsored Display ad placement is based on Amazon-derived shopping signals. Sponsored Display Ads are targeted at activity higher up the sales funnel, as well as providing some retargeting capabilities further down the funnel. They are all about targeting similar products, relevant categories, or interest groups — not search terms.
While Sponsored Product Ads and Sponsored Brand Ads use keywords to target audiences, Sponsored Display Ads use Amazon’s audience demographics data to target audiences based on shopping behavior. The Sponsored Display option is available for professional Sellers enrolled in the Amazon Brand Registry, vendors, and agencies with brand registered clients who sell products on Amazon. Products must be in one or more eligible categories in order to be advertised.
A key feature of Sponsored Display ads is the ability to target and retarget shoppers while they are on sites outside of Amazon. Previously, this capability was only available to Amazon Advertising customers using Amazon DSP (Demand Side Platform). There are minimum spending requirements to access Amazon DSP. This means that the new Sponsored Display ads reduce barriers to entry for Sellers and Vendors looking to broaden their advertising capabilities.
Set-up has also been simplified compared to DSP. Once advertisers create a campaign and add their products, Amazon auto-generates ad creative and dynamically optimizes listings (deploying automation and machine learning) to prioritize products with the highest expected likelihood of converting. Bids automatically adjust based on the likelihood of a conversion, while still allowing you to change your bid or pause your campaign.
Who can use Sponsored Display ads?
Although Sponsored Display ads are making it easier for some Amazon ad users to engage in retargeting, it’s still a beta product that is not available in all markets. In the US marketplace, Sponsored Display Ads are available for both Sellers (via Seller Central) and Vendors (via Advertising Console). As of October 2019, Vendors in the UK, Germany, France, Italy, Spain, India, Japan and Canada also have access. Access will be gradually rolled out by Amazon, so it’s likely only a matter of time before brand registered Sellers across international markets will be able to access Sponsored Display Ads.
How would you use Sponsored Display ads?
Sponsored Display needs to be considered in your bigger-picture Amazon advertising strategy. They can be used to generate incremental brand and product-level awareness, drive middle-funnel opportunities and show your products to new and relevant audiences, both on and off Amazon.
Sponsored Display ads have the potential to drive awareness and demand during key events, for example, during new product launches or Prime Day. They can be used to automatically target audiences who have visited your product detail pages but didn't make a purchase.
Using Sponsored Display ads, Sellers and Vendors can, for the first time, engage audiences across the web using a cost-per-click model, reaching potential customers outside of Amazon with a range of automatically generated desktop, mobile and app ad placements. You can reach prospects even after they've left the Amazon website to re-engage, remind and route them back to your product pages.
The basics of creating Sponsored display ads
With this launch, suppliers can access Sponsored Display ads via Seller Central, while advertisers and their agencies can access targeting features within Sponsored Display through the advertising console. For those who are already running existing Product Display Ads campaigns, the good news is that these are now part of Sponsored Display — with no additional action required.
The new offering incorporates much of Amazon's existing ad technology, allowing automated campaigns to be set up in a matter of minutes. You can promote your full product catalog with ads that are auto-generated and optimized for conversions. Advertisers will now have access to the interest and product targeting features explained above through the advertising console.
So let’s step you through the ad campaign creation process:
1. Select your audience
When creating a campaign, you first select your targeting mode.
There are four key shopping signals to choose from: views, interests, product and categories.
Views: Consumers that have visited product detail pages like yours or have visited your product detail page but not completed a purchase.
Interests: Consumers whose interests align with your target audience.
Product: Consumers that are actively comparing products.
- Consider using product targeting on competitor pages, complementary product detail pages, and your own product detail pages to cross-sell and upsell similar products.
Categories: Consumers browsing categories that are similar or complementary to your products.
Having chosen your audience, you then choose the products you'd like to advertise and set your bid and daily budget,
2. Pick Product(s) to advertise
Like all Amazon PPC ads, there are many strategies you can take. It is worth taking the time to experiment and test out a few approaches to see what works. For example, for your first campaign, a common approach is to view it as a learning experience and promote your whole catalog. By activating your full catalog, you will learn a great deal about where the ads are appearing, which products are converting best, and at what stage of the buyer’s journey.
Alternatively, you could just select a few critical product lines. You could take just one ASIN and create a campaign to target competitor ASINs. However, the broader the scope of products you choose, the more data you will gather to better-inform the investments you make next. In both instances, grouping your product within discrete campaigns will improve the control you have over bidding and reporting.
3. Choose budget (and campaign name)
At this stage, you need to give the campaign a name and set your budget. You need to define the amount that you wish to pay-per-click. The daily budget is the average amount you are willing to spend on a campaign in one day. It is spread out over one month, and applied across all the days in that month.. Your budgetary choices are ones that you simply have to make based on your overall advertising and ecommerce budget. However, the more money you can spend experimenting, the better information you will be able to gather regarding ROI and determining what a good RoAS on Amazon looks like for your brand.
4. Create your ad
You only have four elements to play with because Amazon does the creatives for you:
Headline: You can use a maximum of 50 characters.
Brand Name: This will be displayed in various places in the format — “Sponsored by”.
Product Description: The key creative element. The aim is to describe your product as accurately as possible and be compelling at the same time.
Brand Logo: This will be displayed next to the product.
When writing your headlines, Amazon allows phrases like "Exclusive" and "New", but making claims like "Best Seller" will get the ad rejected.
5. Preview and launch your ad
Ads can be previewed in nine different formats. It’s best to review your campaign before launching because once submitted, you cannot change it. Amazon will review and approve campaigns within 3 business days. Once approved, ads will go live automatically.
With Sponsored Display now providing ads targeted at customer interests, habits and previous views, Amazon has created a powerful and relatively simple portfolio of Sponsored offerings to add to keyword-oriented Sponsored Product and Sponsored Brand.
However, as already highlighted, managing these marketing tools and campaigns will not be an easy task, especially as competitors will have access to the same tools. With average PPC conversion rates around 10% on Amazon, that competition is only going to grow. To gain an advantage, you need to look beyond the Amazon ecosystem and deploy third-party tools able to improve your understanding of customer data and heighten your decision making.
For example, advanced analytics software can deploy machine learning and AI to data streams, estimating metrics like CLV (customer lifetime-value) that give you the broadest possible view of what products to prioritize. This will ensure the money you spend delivers the best long-term ROI — allowing your organic and paid campaigns to complement each other in a virtuous cycle. Regardless, your route to success with Amazon Sponsored Display ads starts with experimentation. Set up a campaign, record the results, and see where it takes you.