What are “Views and Clicks” for Amazon Sponsored Display Ads?

Amazon’s Sponsored Display ads are the “new kid on the block” when it comes to Amazon advertising. We often talk of Sponsored Products and Sponsored Brands, but a new piece of data concerning Sponsored Display ads had us scratching our heads and was worth figuring out.

If you haven’t experimented with Amazon’s Sponsored Display ads before, they are essentially a different way for advertisers to target their audience. Where Sponsored Products and Sponsored Brands rely on keywords, Sponsored Display ads use demographics to find the right audience.

Sponsored Display Ad Performance

When Amazon launched Sponsored Display ads in 2019, we looked into the ad type and found some disappointing results for Sponsored Display ads. Conversion rates hovered around 1% and sometimes were even lower. Not exactly a shining star in the arsenal available to an Amazon marketer.

Sponsored Display Ad performance in 2019

  • Low conversion rate
  • High ACOS
  • Ineffective advertising platform

In April of 2020, we saw a big change in the performance of Sponsored Display ads. A big change doesn’t really do it justice. We’re talking off the charts growth. Conversion rates rose from 1% to over 100%. How is that even possible?

Sponsored Display Ad performance in 2020

  • High conversion rates
  • Low ACOS
  • One of the most effective ways to advertise?

How Can Sponsored Display Ads Have High Conversion Rates?

Since April, we’ve seen a huge increase in conversion rates and an amazing drop in ACOS for Sponsored Display ads. Is such a turnaround even possible in such a short period of time? We investigated this phenomenon, and it seems this change has stemmed from a change made by Amazon.

amazon sponsored display conversion rate
We’ve seen dramatic increases in conversions and huge drops in ACOS since April.

First off, let’s break down how Amazon is defining “conversions.” Traditionally, conversion rates have measured how many website visitors become paying customers or people who opt-in to something. To put it simply, conversion rate can be calculated by dividing orders over total clicks.

For Sponsored Display ads, this equation has changed. Sponsored Display ads offer three targeting types:

  • Audiences that have viewed your product or similar products
  • Audiences that have searched for products that are similar to your product
  • Audiences that have purchased your product before

If you are retargeting for audiences that have purchased your product or searched for similar products, you are using a cost per thousand impressions advertising model (CPM). For audiences that have viewed your product, a cost per click (CPC) model is used.

Normally for Sponsored Products, there are multiple dynamic bidding options. For Sponsored Display ads, there is no fixed bidding option. CPM audiences only have down-only options and CPC audiences have dynamic up and down options.

The Reason Conversion Rates are So High

When looking at the skyrocketing conversion rates for Sponsored Display ads, the reason for the increase lies in the change to Amazon’s attribution window. Conversions are no longer derived from clicks but also views.

amazon sponsored display conversion rate
If Amazon went only by clicks, the conversion rate would be much lower.

According to Amazon, “Orders from advertised products and all products within your brand sold by Amazon and third-party sellers within 14 days of impressions or clicks on your ad. The exception is ad groups using the “Views” audience, which only include sales within 14 days of clicks on your ad.”

That means whether you’re using Seller Central, Vendor Central, or someone else is selling your product, those sales and impressions are being attributed to your display campaign.

Let’s say someone views your product because they are a previous customer and decide to order three items from you a few weeks later. These purchases will factor into the conversion rate for your Sponsored Display Ad.

For the view audiences, Amazon only attributes sales if someone clicks on the display ad. For the search and previous customer audience, Amazon attributes sales to impressions.

How Amazon Sponsored Display Ad Data Affects You

Clearly the way Amazon defines conversions has changed. The lack of delineation between click-through conversions and view-through conversions makes for incredibly misleading conversion rates.

It’s safe to say that the effectiveness of Amazon’s Sponsored Display ads hasn’t drastically improved since 2019. The reporting system has made it easier for Amazon to show sellers high conversion rates and lower ACOS numbers, but the foundation of the advertising platform remains unchanged.

We also lack clarity on some important issues that arise when a lack of separation between view-through conversions and click through conversions exists. 

Let’s say someone sees a Sponsored Display Ad on a third-party site and doesn’t even notice it. Amazon still counts this as a view. If that person then purchases that product two weeks later from a Sponsored Product listing, where is the sale attributed to? We don’t know. Amazon hasn’t made it clear and it’s possible that the sale would count for both.

We’ve seen similar scenarios play out on other platforms such as Google where sellers look at their revenue generated by ads and it vastly exceeds their actual revenue. 

Key Takeaways

Amazon has changed their method for calculating conversion rates derived from Sponsored Display ads. View-through conversions and click-through conversions are now being combined to show incredibly high conversion rates and very low ACOS.

All in all, Sponsored Display ads can still be effective, but don’t expect it to be the secret formula that the numbers portray it as. Sponsored Display ads are relatively new and we’d love to see more features when it comes to dynamic bidding and more transparency with the data, especially conversion rates.

Discover Us on our PPC Den Podcast

If you enjoy supplementing your long reads with audio, we cover this topic on our podcast as well. 

Listen to it in the episode below or find us on your favorite streaming platform, like Apple, Google, Spotify, and more!

  • 1:10 Intro
  • 5:10 A recent trend with Sponsored Display ads
  • 7:00 How conversion rates work
  • 11:20 Targeting types for Sponsored Display ads
  • 15:30 Sponsored Display conversions
  • 17:30 The big problem with conversions in Sponsored Display ads
  • 30:40 What we’d like to see and closing thoughts

Watch Mike & Stephen on YouTube

If you enjoy supplementing your long reads with video, well, hot diggity dog, you’re in luck! We cover this topic on our YouTube channel too. 

Watch it below and please don’t forget to ‘like’ and subscribe.

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