Amazon Sponsored Products: Everything You Need to Know (Updated 2023)

Sponsored Product Ads for Amazon PPC Featured Image

Over the past few years, Ad Badger has been at the forefront of managing countless Amazon sellers, empowering them to not just compete but dominate the search results. Our invaluable insight? Amazon Sponsored Product Ads (SPAs) stand as a potent catalyst for boosting conversion rates and elevating your product’s visibility. That’s precisely why we passionately encourage sellers to embrace ads on Amazon and sponsored products.

Picture this: as more sellers flood into the Amazon marketplace, the battleground of search results is poised to become even fiercer in the coming years.

Now, here’s the secret sauce – if you master the intricacies of a Sponsored Product Ads strategy today, you’ll have a substantial lead over your competitors, setting the stage for your triumph.

In fact, 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. According to a report from Merkle:

Sponsored Products accounts for the majority of ad revenue, 88 percent, that Amazon makes from search-based advertising.

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    What are Sponsored Products on Amazon?

    Amazon Sponsored Products are Amazon ads that promote the sales and visibility of your desired product listing in Amazon search results.

    Here are the reasons why Amazon Sponsored Products Ads are so great for Amazon Pay Per Click:

    • Sponsored Product Ads are the most popular type of ad for Amazon pay-per-click
    • 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 Ads itself  concisely claims Sponsored Products are the best way to “show off your products, create with ease, control your costs, and track your success.”

    If your goal is to increase sales and attract traffic to product pages, then you’ll want to learn how to use Amazon Sponsored Product Ads. You’re in the right place.

    Where do Sponsored Products appear on Amazon?

    Sponsored Product Ads 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.

    To the untrained eye, Sponsored Product Ads almost resemble organic listing results. Sponsored Product Ads appear above and to the right of the organic results. The ads are marked subtly “Sponsored.” Sometimes they’re even displayed on competitor’s product detail pages. 

    Taking advantage of Amazon Sponsored Brands placements can be very powerful for you.

    Where SPAs appear on Amazon
    Sponsored Product Ads appear above and to the right of the organic results. The ads are marked subtly “Sponsored.”

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

    Because Amazon Sponsored Product Ads are highly visible to many potential customers, they are key revenue drivers. 

    By advertising on Amazon, with Amazon Sponsored Product Ads specifically, your products are placed in front of shoppers who are lower in the shopping funnel, and these shoppers already know exactly what they want so they have a greater likelihood of buying your product.

    Remember, this is Amazon PPC, so this means that you will bid against other sellers for more exposure to these potential customers. You decide how much you want to spend per click on each particular target, so you have a lot of control over your daily advertising budget. 

    SPAs on product detail pages
    This product page has a bad case of the Sponsored Product Ads.

    What’s the best Sponsored Product placement?

    The top-of-search ad placement on Amazon’s SERP is the most prominent and competitive spot for advertisers, offering prime visibility at the top of the results page. While it has a higher cost due to increased competition, it yields better conversion rates, with over 67% of clicks going to products in this position.

    Product Page placement, despite potentially lower CTRs, holds unique value for advertisers, often delivering strong sales results.

    Rest-of-Search placement encompasses positions below the top row on search pages, and Amazon has introduced an update in 2023 that allows advertisers more control over bid modifiers for this placement, addressing previous limitations.

    Learn everything there is to know about Sponsored Product Placements here.

    Before we get started, it’s important to mention one important caveat of Sponsored Products.

    Amazon Sponsored Products Will Only Appear If You Own The Buy Box

    Amazon Sponsored Products 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 Buy Box
    The buy box should look like this and it should be your instinct to crush the competition and make it yours.

    Most people buy items through the Buy Box section on the product detail page. The highest-ranked by Amazon at that time will show up on the Buy Box section. The Buy Box winner will make more sales than any other seller for that product (if there are multiple high-ranked sellers then they will rotate.

    Generally, winning the buy box means having a clean selling record.

    Here’s a list of what Amazon looks at when considering who gets the buy box:

    • A history of successful selling
    • The number of good reviews you have
    • If you have a competitive price
    • How you handle your fulfillment
    • If you have enough stock
    • How new your product is 

    How do I set up an Amazon Sponsored Product Ads campaign?

    We'll outline the steps on getting started right here!

    Check out our video on Sponsored Product Ad campaigns if you want to follow along in live time.

    Steps to configure the How-to Schema widget:

    Step 1 :Navigate to the Campaign Manager in Amazon Seller Central.
    Navigate to the Campaign Manager in Amazon Seller Central and make sure you're on the Amazon Sponsored Products tab, not the Headline Search Ads tab.
    Step 2: Hit the "Create Campaign" button.
    Enter the HowTo Description with a relevant image to your description.
    How to create a SPA campaign on Seller Central
    Step 3 : Set your campaign name, budget, duration.
    Set your campaign name, budget, duration. For campaign names, we recommend including the sponsored products name along with your Target ACoS.
    Setting up your campaign parameters
    Step 4 : Decide if you want to run an automatic or manual targeting campaign.
    Decide if you want to run an automatic or manual targeting campaign and you're done! Not sure which one to pick? No problem, we got you covered. Buckle up.
    GIF Courtesy of GIPHY.

    The Difference Between Automatic And Manual Campaigns

    I want to stress to Amazon sellers to use both manual and automatic campaigns to get the most out of your keywords. They both are beneficial, and both have drawbacks.

    Automatic Campaigns Are Great For Keyword Research

    Let’s start with automatic campaigns in which Amazon uses the product info to target the ads to all relevant searches. Sellers can’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 in the, and they bid on words you would’ve never of guessed customers search for. It’s like having your personal sponsored products campaign manager.

    Benefits of Automatic Campaigns:

    Manual Campaigns Offer More Control Over Bidding

    Manual campaigns let you set your own keywords. 

    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 as 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.

    Benefits of Manual Campaigns:

    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 the Research-Peel-Stick-Block (RPSB) method.

    To do this, you create 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. You simply use automatic campaigns for their keyword research and manual campaigns for their customizability. 

    If all this sounds like a lot to you, it might be worth investing in a PPC tool like Ad Badger which automates this whole process for you.

    Ad Badger simplifies your Sponsored Product campaigns

    Managing all of these Sponsored Product campaigns yourself can be time consuming when you have to do it for every single product. That could be up to a million SKUs depending how large of a seller you are!

    Meanwhile, Ad Badger deploys the perfect Amazon Sponsored Products ads strategy for you every time with automated bid optimization.

    Ad Badger updating a Keyword’s Bid to keep in Target-ACOS sweet spot
    Ad Badger updating a Keyword’s Bid to keep in Target-ACOS sweet spot

     With Ad Badger, you can get all PPC needs met in one place without a worry.

    Spread the Love for Amazon 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.

    No matter what happens, now you’ve got the skills to implement Sponsored Product Ads, one of the most critical PPC strategies.

    Amazon is always tweaking how Sponsored Products work, so sign up for our newsletter for more Amazon PPC gold sent straight to you.


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