What You Need to Know About Amazon Sponsored Products

Yes, I’m obsessed with Amazon 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. Buckle up. 

GIF Courtesy of GIPHY.

Once again, here are the reasons why Sponsored Product Ads are so great for Amazon PPC: 

  • Sponsored Product Ads are the most popular type of ad for Amazon PPC
  • They are essential to the buyer’s customer journey as they appear on almost every page
  • Sponsored Product Ads have a high conversion rate (~10%)
  • They can appear on product detail pages and organic searches

Amazon has tons of success stories on how their customers used SPAs to scale their business. Some of my favorites include Empire Case’s and ExportX.

AdAge even gets the importance of Sponsored Product Ads and comments on its plan for world domination. In a report from Merkle, it’s said “Sponsored Products accounts for the majority of ad revenue, 88 percent, that Amazon makes from search-based advertising.”

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. Only one seller can own the buy box, which starts the checkout process and is located on the product detail page. Amazon explains vaguely as offering impeccable customer experiences. 

Generally, winning the buy box means having a clean selling record. Amazon looks at:

  • A history of successful selling
  • The amount of good reviews you have
  • If you have a competitive price
  • How you handle your fulfilment
  • If you have enough stock
  • How new your product is 
An image describing the buy box. Customers should see an
The buy box should look like this and it should be your instinct to crush the competition and make it yours.

Sponsored Product Ads Are Hard For a customer to misss

SPAs are really hard to miss on Amazon because they appear at the top of the search results page, to the right, at the bottom, and even on the product detail page.

Sponsored Products positioning
Sponsored Product Ads appear above and to the right of the organic results. The ads are marked “Sponsored.”

Since Sponsored Product Ads appear in so many places, they’re extremely valuable to sellers. Customers just can’t get away from them.

An image demonstrating where Sponsored Product Ads appear on a product detail page.
This product page has a bad case of the Sponsored Product Ads.

Our Customer’s Conversion Rate Speaks to the Importance of Sponsored Products

Amazon’s Sponsored Product Ads are the ads seen most by customers, causing a really high conversion rate. Google AdWords usually convert an average of 1 to 3%, lower than Amazon’s PPC conversion rate. Amazon’s Sponsored Product Ads usually get about a 2 to 5x higher conversion rate. Read more on the differences between AdWords and Amazon PPC here

For example, last year our customers saw 940,438 clicks that created 98,109 conversions. This results in a 10.43% 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.

Amazon PPC Stats for March
As you can see, the conversion rate for February and March hovered around 10%.

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% for prime members. All they need is a little nudge in the right direction from an Sponsored Product Ad.

Setting Up A Sponsored Product Ad Campaign Is Easy Peasy

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:

You Should Be Using Both Auto and Manual Sponsored Product Campaigns 

There are manual and automatic campaigns in Seller Central. Here’s another post I wrote covering the differences between them that has been popular among the Amazon PPC community. 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.

An image of what sellers see when creating automatic and manual campaigns inside Seller Central
This is what sellers see inside Seller Central when setting up their Sponsored Product campaigns.

Manual Campaigns Offer  More Control Over Bidding

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 Are a Great Starting Point for Keyword Research

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.

Auto and Manual 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. 

Here’s a video post on calculating the perfect bids:

Spread the love for sponsored product ads

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.

Great Amazon PPC duos.
Okay one more: Like Tyrion and Bronn from Game of Thrones. GIF courtesy of GIPHY

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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