Yes, I’m obsessed with Sponsored Products. I can’t seem to stop talking about them. They’re the cat’s pajamas, the belle of the ball, the apple of my eye, the cheese to my macaroni. My love for them is never-ending and after this post, I hope you feel the same way.
I’ve written about the types of ads in Seller Central, briefly going over the importance of Sponsored Product Ads (SPAs), but in this post, we’ll go a little further in detail.
Once again, here are the reasons why Sponsored Products are so great:
- SPAs are the most popular type of ad on Amazon
- They are essential to the buyer’s customer journey
- SPAs have a high conversion rate
- They can appear on product detail pages and organic searches
Sponsored Products Will Only Appear If You Own the Buy Box
Before we get started, I think it’s only fair to mention Sponsored Product Ads (like the rest of Amazon) are very competitive and they will only appear if the seller owns the buy box, which Amazon explains vaguely as offering impeccable customer experiences. Only one seller can own the buy box, which starts the checkout process and is located on the product detail page.
If you wish to read further, check out this post on how to win the buy box by Profit Sourcery.
Where Sponsored Product Ads Appear
SPAs are really hard to miss on Amazon, they appear at the top of the search results page, to the right, at the bottom, and even on the product detail page.
Since SPAs appear in so many places, they’re extremely valuable to sellers. Customers just can’t get away from them.
Our Customer’s Conversion Rate Speaks to the Importance of Sponsored Products
SPAs are the ads seen most by customers, causing a really high conversion rate. Google Adwords usually convert an average of 1 to 3 percent, lower than Amazon’s PPC conversion rate. Amazon’s Sponsored Product Ads usually get about a 2 to 5x higher conversion rate.
For example, at Ad Badger our customers have seen 940,438 clicks and have created 98,109 conversions. This results in a 10.43 percent overall conversion rate for our customer’s Sponsored Products. Keep in mind that number is a little higher than usual because they’re using an Amazon PPC tool instead of doing their own ad optimization, but you get the gist.
Another contributor to their high conversion rate is because the ads appear at the end of the buyer’s journey. When consumers visit Amazon, they already have an idea of what they want to purchase. Amazon’s conversion rate is around 74 percent for prime members. All they need is a little nudge in the right direction from an SPA.
How to Set Up Sponsored Product Ads
Sponsored Product campaigns can be created in Seller and Vendor Central (through Amazon Marketing Services). As a little Sponsored Product review, check out my post about the differences between Seller and Vendor Central and how Sponsored Products differ within them. They’ll quickly catch you up on everything you need to know.
Here’s a demonstration on setting up a Sponsored Products campaign in Seller Central:
Types of Sponsored Product Campaigns
There are manual and automatic campaigns in Seller Central. Here’s another post I wrote covering the differences. It’s a good idea to get caught up before diving a little deeper.
I want to stress to Amazon sellers that using both manual and automatic campaigns is the best way to get the most out of your keywords. They both are beneficial, and they both have drawbacks.
Let’s start with manual campaigns. When starting a manual Sponsored Products campaign, you will have more control of the bid price and be able to fine-tune your bids to either maximize revenue or hit your target ACoS.
Even though maximum profit and hitting the perfect ACoS is your end goal, performing a manual campaign isn’t as easy like a Sunday morning. Sellers bid on either broad, phrase, or exact keywords, but it’s very hard to know which keywords are profitable before keyword research. That’s where automatic campaigns come in.
Automatic campaigns perform easy and free keyword research without much effort. Sellers don’t choose keywords and leave their bids in the hands of Amazon. These types of campaigns are great for beginners because of their simple setup and they bid on words you would’ve never of guessed customers search for.
How These Campaigns Work Together
Automatic and manual campaigns form an unlikely friendship when working together. If you’re new to Amazon PPC, I suggest creating an automatic campaign for a product, wait for the data to roll in so you know which keywords are profitable, and enter them in a manual campaign with increased bids. This is called the Research-Peel-Stick-Block (RPSB) method. You simply use automatic campaigns for their keyword research and manual campaigns for their customizability. We’ll talk more about RPSB and suggested bids on Amazon down the road.
By now I want you to feel like Sponsored Products are the Simon to your Garfunkel, the Elizabeth to your Mr. Darcy, the Quavo to your Migos. You get the picture.
I promise you we will cover Amazon Sponsored Product tips in a later post. For now, enjoy this guide and get to know SPAs a little better.
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Until next time.