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Amazon Advertising: The Ultimate Guide To Advertising On Amazon

amazon advertising campaign management guide

Grab a few snacks and a notepad because this is going to be a crash course on Amazon advertising. You’ll learn how to set up and run Amazon advertising campaigns. There are four types of campaigns: Sponsored Product, Sponsored Brand, Sponsored Display, and Demand Side Platform (DSP). All except for DSP are available on Amazon Seller Central and only Sponsored Brand and Display are available for sellers who are brand registered. For this reason, having brand registry is essential on Amazon. Without it, you’ll be at a disadvantage. If you have not set up brand registry and your brand name is trademarked pause and go register your brand. For those who already registered their brand lets begin with Amazon’s bidding structure, targeting, match types, and campaign structure.

 

Bidding (CPC & CPM)

All of Amazon’s self-service advertising campaigns run on the same bidding model. The cost per click (CPC) and cost per thousand impressions (CPM) for the highest bid is $0.01 over the second-highest bid. For example, if you bid $1.10 and the second-highest bid is $0.88, then your cost will be $0.89 when a customer clicks your ad. If you bid below the highest bidder, then your bid will be the same. For example, the second-highest bidder who bid $0.89 will pay $0.89 when a customer clicks their ad.

 

Targeting Types

The two targeting types we’ll cover are keyword and product (ASIN) targeting. Keywords are the search terms people search on Amazon’s marketplace search engine. For example, “teddy bear”, “dog joint supplement”, and “coffee”.

amazon search bar

Each product on Amazon has a unique ID called an Amazon Standard Identification Number (ASIN). When you enter an ASIN into your advertising campaigns, you are opting for your advertisement to show up on that ASIN’s product detail page.

 

Match Types

There are 3 different match types called exact, phrase, and broad. These only apply to keywords and do not apply to ASINs. The match type determines what search terms you target based on the keywords you use. Here are the search terms the keyword “coffee table” would target based on the match type:

  • Exact = coffee table
  • Phrase = coffee table, blue coffee table, coffee table book
  • Broad = coffee table, blue coffee table, coffee table book, coffee maker table

When using either phrase or broad it’s important to have foresight. Avoid wasting money by add negative keywords when you launch a campaign. In the situation above, you would want to negative “book” and “maker” as a negative phrase match keyword to avoid wasting money due to your product being a coffee table.

 

Campaign Structure

When structuring an Amazon advertising campaign it’s important to segment by product or product category. You don’t want to mix different products within an ad group or campaign unless the targeted terms are broad and category-based. This will help avoid advertising your products for non-relevant terms and make it easier to optimize advertising campaigns. For these reasons, it’s best practice to create individual campaigns. For example, if I sell a bacteria water test kit and a metal water test kit, then I would create 3 campaigns in total. One for each individual product and one for the category.

The category in this situation is water testing kits, which would contain keywords, such as “water test kit” and “testing kit for water”, but it would not contain “water bacteria test” or “water test for metals”. How you avoid targeting these more product-specific search terms is by adding negative keywords, such as “bacteria” and “metals”.  There are more advanced methods of structuring advertising campaigns, but at this time this will be the easiest method to implement.

 

Sponsored Product

The most popular advertising campaign type is Sponsored Product. It’s the first ad type launched by Amazon and is accessible by those with and without brand registry. The ads show on the top before the first organic search results, in the middle of the search results, in the shared placement section, and below the product detail page.

Top of Search Results

Depending on the product subcategory between 1-4 Sponsored Product ads will display in the top search results before the first organic search results.

amazon sponsored product ad

Middle of Search Results

amazon sponsored product ads middle of search results

Below The Product Features (Shared Placement)

The shared placement ad spot is shared by multiple ad types. Since its inception, it has been shared by multiple ad types, such as Sponsored Product, Sponsored Brand, Sponsored Display, and DSP.

Sponsored Product shared placement

Below The Product Detail Page

Sponsored Product related items ads

These ads are located on the product listing below the Frequently bought together section.

Here are the steps to set up a Sponsored Product ad campaign:

  1. Hover your cursor over Advertising
  2. Click Campaign Manager
  3. Click the Create campaign button
  4. Click the Continue button on the Sponsored Products box
  5. Enter your Campaign name
  6. Select a portfolio to organize the campaign within (optional)
  7. Enter your Daily budget
  8. Select Manual targeting
    Do not use automatic targeting. By selecting automatic targeting you give Amazon full control of what search terms and ASINs (products) your product(s) are advertised for. If you guessed Amazon’s autotargeting isn’t always the most accurate you guessed right. It’s not that it doesn’t target relevant search terms and ASINs, it’s that it also targets non-relevant search terms and ASINs. Basically, Amazon does everything it can to spend your money, so that it makes more money. There are better methods available, so keep reading on.
  9. Select Dynamic bids – down only or Fixed bids
    Fixed bids are good if you plan to closely monitor your campaigns on the keyword targeting level and dynamic bids – down only is good for those who are going to be passively managing the campaigns.
  10. Leave the Adjust bids by placement (replaces Bid+) as is
  11. Enter your Ad group name
  12. Search and add your products
  13. Select either Keyword targeting or Product targeting
  14. Enter your keywords or ASINs (see the section below for keyword and ASIN strategies)
  15. Click the Launch campaign button

When choosing keywords don’t accept Amazon’s recommendations. First, identify what your product is and what customers who want to buy your product would search. For example, if you sell a purple vintage coffee table, you’ll want to target “purple coffee table” and “vintage coffee table” as a phrase match. Why not “purple vintage coffee table”? You don’t want to target that keyword because you most likely already rank for that search term. But if you sell “vitamin c supplement”, which is a highly competitive product market on Amazon, then there’s a high chance you don’t rank in the top search results.

ASINs targeting directly targets competing products. You can either choose ASIN or category targeting. ASIN will allow you to enter the exact ASINs you want to target and category will target all ASINs within a product’s category. If you want the best results, always use ASIN targeting. This level of granularity will allow you to control and easily fine-tune your advertising campaign. Here’s why it’s superior:

  1. Category targeting means you’ll be advertising your product on superior competitor products that have a lower price, better rating, or greater value. People will engage out of interest, but when they recognize the prior option has an advantage over you you’ll lose the potential sale and be left with the expense of the click.
  2. There are millions of products in the wrong product category. You’ll be advertising a ring dish and wonder why you’re advertising it for T-shirts and gift baskets.
  3. It’s like whack-a-mole. Amazon’s system is designed to try to spend as much of your daily ad budget as possible regardless of performance or relevancy. Don’t give Amazon leeway.

There’s one exception. Your product has the best price, rating, value, and your bandwidth is short. If that’s the case, then let it run wild with category targeting. Don’t get me wrong. You’ll still want to check-in and make sure you aren’t throwing money away on ASINs that don’t convert and have a significant amount of data, but you won’t have to spend hours collecting the individual ASINs you want to target.

Let us not forget about negating keywords and ASINs. If you are using an exact match or ASIN targeting, then you can optimize your campaigns on the targeting tab. If you are using phrase, broad, or category targeting, then follow the steps below:

  1. Click the Advertising Campaign you want to optimize
  2. Click an Ad Group with the campaign
  3. Click the Search Terms tab
  4. Change the date range to Last 65 days or Lifetime
  5. Or click Advertising Reports, Select Search Term for the Repor type, Select your Report period, and follow the prompts to run and download the report
    Don’t go lower than 30 days. You want as much data as possible to reach a level of significance. You don’t want to negate a search term that 1 month had $2 spent and $0 in sales, then the next month it had $2 spent and $20 in sales. Understanding significance and relevancy is important.
  6. Review the data to identify non-converting and non-relevant search terms or ASINs
  7. Add search terms or ASINs to the Negative Keywords list by clicking the Add negative keywords button
    When adding negative search terms and ASINs to the negative keyword list you have the option to add them as an exact or phrase match. ASINs should always be exact match and search terms can be either. Please note, if you add a keyword as a phrase match, then all search terms containing that keyword will be negated.
  8. Enter the search terms and select a match type (exact or phrase)
  9. Click the Add keywords button
  10. Click the Save button

As mentioned in the match types section earlier it’s important to identify and negate as many non-relevant search terms as possible before launching your campaign.

 

Sponsored Brand

Sponsored Brand advertising campaigns have the highest CPCs. Amazon aggressively launched Sponsored Brand by having all of their Amazon Adverting Account Executives advocating brands to place high bids. Why would they do this? One word, money. Not only did Amazon make a lot of money, but the Account Executives did as well. This resulted in brands, agencies, and specialists who didn’t know better to launch their campaigns with high bids, such as $2, $3, and more even though they were only bidding $0.50 in their Sponsored Product advertising campaigns. Luckily for you, a lot of time has passed since and a handful of product markets have somewhat corrected since people realized it was mathematically impossible to make them profitable based on standard conversion rates and the CPCs.

I share those insights not to scare you away, but to set your expectations and properly guide you. If your product has low-profit margins, then you should skip this section, unless you have an awesome 45-second video advertisement to leverage. I’ll explain further below.

There are 3 different types of Sponsored Brand Campaigns.

  • Product Collection
  • Store Spotlight
  • Video

Amazon Sponsored Brand Ad Types

Here’s where they are placed on Amazon’s marketplaces:

Top of Search Results

Sponsored Brand Ad Placement Top of Search Results

Bottom of Search Results

Sponsored Brand Ad Bottom of Search Results

Below The Product Features (Shared Placement)

Sponsored Brand Shared Placement

Below on the Product Detail Page

Sponsored Brand Ads Below Product Detail Page

Here are the steps to set up a Sponsored Brand ad campaign:

  1. Hover your cursor over Advertising
  2. Click Campaign Manager
  3. Click the Create campaign button
  4. Click the Continue button on the Sponsored Brands box
  5. Enter your campaign name
  6. Select a portfolio to organize the campaign within (optional)
  7. Enter an End date if your product is dated (not required for non-dated products)
  8. Enter your daily budget
  9. Select your Ad Format (Product collection, Store spotlight, Video)
  10. Select Landing page (not applicable to video ad format)
  11. Enter your Creative
  12. Select your targeting type (keyword or product)
  13. Enter your keywords or ASINs
  14. Click the Launch Campaign button

At this time Sponsored Brand Video performs the best. The downfall is the exposure rate. The video advertisement is displayed at the bottom of the search results where the majority of the customers do not go. The good news is that Amazon will most likely continue to expand the exposure rate by placing the video advertisements in new areas due to the success and positive feedback they are receiving from brands.

 

Sponsored Display

The performance of Sponsored Display ads has been finicky. They work for some brands, but not others. It really comes down to how strong of a product you have. Your product can’t be the most expensive and with an equivalent product rating as competitors, not retail-ready, or be cheap with bad product ratings. In the best-case scenario, you have a competitive edge in price and/or product rating.

The two targeting methods are audience and product.

Audience

  1. Searches
    Shoppers who searched for keywords relevant to your advertised products.
  2. Views
    Shoppers who viewed the detail pages of your advertised products or similar products.
  3. Purchases
    Shoppers who previously purchased your advertised products.

Product

  • ASINs
  • Categories

Here’s where they are placed on Amazon’s marketplaces:

Below The Product Features (Shared Placement)

Sponsored Display Ads Below The Bullet Points

Below the BuyBox

Sponsored Display Ad Below the BuyBox

Sponsored Display ads also show off of Amazon.com on 3rd party websites who are a part of Amazon associates (affiliate) program.

Here are the steps to set up a Sponsored Display ad campaign:

  1. Hover your cursor over Advertising
  2. Click Campaign Manager
  3. Click the Create campaign button
  4. Click the Continue button on the Sponsored Display box
  5. Enter your campaign name
  6. Enter an End date if your product is dated (not required for non-dated products)
  7. Enter your daily budget
  8. Enter your Ad group name
  9. Select either Audience or Product targeting
  10. Select the product(s) you want to advertise
  11. Enter your bid
  12. Enter the ASINs or Categories you want to target unless you chose Audience targeting, then you’ll select either searches, views, or purchases
  13. Click the Launch campaign button

For the most optimal success make sure your product listings are retail ready. This means they have product reviews, proper titles, bullet points, descriptions, A+ Content, images, and videos. The most difficult will be product reviews. Rest assured we’ve created an article on How To Get Amazon Product Reviews. If you want to save a lot of money I highly recommend doing this first before you put money behind ads. The last thing you want to do is waste money and negate search terms or ASINs that could have been profitable if your product listings were retail-ready.

Overall, this is not an all-in-one guide. Products are not all alike and require unique approaches. This guide is meant for building a proper foundation of knowledge and helping those who are beginners with advertising on Amazon.

About the Author: Quinton Cranford
Quinton Cranford-Quinton Cranford is a digital marketing expert who specializes in online direct-to-consumer sales. He is also the founder and CEO of Pidapi.

Quinton Cranford is a digital marketing expert who specializes in online direct-to-consumer sales. He is also the founder and CEO of Pidapi.

3 Replies to “Amazon Advertising: The Ultimate Guide To Advertising On Amazon”

  1. Wow I really did need a notepad to take notes. Thank you for this informative guide for advertising on Amazon. Being a visual learner, I really appreciate the pictures calling out exactly what you were describing.

  2. Very insightful!

    Is there a specific type that you’d recommend to those without much experience on Amazon or those without much visibility?

  3. It’s too bad that Amazon pushes sellers to artificially inflate the CPCs as you point out when discussing Sponsored Brand campaigns. Many more sellers would be able to advertise profitability if not for this. 🙁

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