If you’re not currently using Amazon’s Sponsored Product Ads, it’s time to start. Amazon has become the #1 search engine for consumer packaged goods in the US. A recent study showed 44% of all online shoppers go directly to Amazon when beginning product research. Sponsored Product Ads have become a powerful tool to get your products in front of potential customers.
What are sponsored product ads?
Amazon Sponsored Product Ads are a pay per click marketing service that allows a seller’s product listing to appear on both search results pages:
And product detail pages:
You can access this tool from the advertising tab in your seller central account. Just give the campaign a name, decide on a daily ad spend limit, and choose whether you’d like to submit or your own keywords or have Amazon provide them for you.
Where to begin:
Before you run your first sponsored product ad, it’s important to understand the 3 primary metrics used to measure if you’re running a successful campaign:
Impressions – How often is your product ad appearing on Amazon?
Click Thru Rate – When your product does show up, how often are customers clicking on the ad?
Conversions Rate (ACOS) – When customers do click on the ad, how often are they buying your product?
Amazon tracks the number of times your ad appears either within the search results or on a product detail page. This number is represented as “Impr” (Impressions) within the campaign manager
Amazon takes multiple factors into consideration when deciding which ads appear. Bid price, relevancy, and past click through rate are just a few.
It’s important that the content within your product detail page be relevant to the search terms. Also take note that your product ads will not show up at all for search terms with keywords that are not included within the content of the product detail page.
Click Thru Rate
Amazon tracks the number of times a customer clicks on your product detail page. This number is represented as “Clicks” within the campaign manager.
The number of clicks as a percentage can vary greatly depending the purpose of the advertisement. Running an ad for a very general search term will have a much lower volume of clicks than running an ad with the brand name in the search term.
Conversion Rate (ACOS)
The Average Cost of Sale (ACOS) is Amazon’s way of tracking the total ad spend as a percentage of total sales.
From a purely financial perspective, the ACOS is the ultimate indicator of whether or not you are running a sustainable campaign.
Campaign Best Practices
Understanding the above factors, we’ve found that using a 3 step campaign implementation method allows you to fully leverage the power of Sponsored Product Ads.
Step 1) Marketplace Analysis
The first step in creating a successful campaign is to collect as much information as possible about the potential for your product. Sales analysis software such as Jungle Scout or Unicorn Smasher allows sellers to answer questions like:
- “What’s the total market size of my product?”
- “What’s my current share of the total market?”
- “What keywords are shoppers using to buy my products?”
This understanding of the market allows you to: set realistic expectations for the success of the campaign, provides you a foundation of keywords to use, and can draw attention to any possible issues before spending your first dollar on advertising.
For example: If your product is priced significantly than all of your competition on page 1 of the search results for a specific word, your success may be limited or you may have to lower your price to compete.
Step 2) Ad Campaign Creation – Dual Campaigns
Create two ad campaigns: A manual targeting campaign using the keywords from your marketplace analysis, and an automatic targeting campaign.
This is done for so you are able to have the higher level of control associated with the manual targeting but also discover additional keywords customers are using to search for our products from the automatic campaign.
Eventually, once all valuable data has been pulled from the automatic campaign, you can discontinue that campaign. When creating your campaign take the following factors into consideration:
- Bid high in the beginning – You may be tempted to keep your bid prices low when starting out to make sure you don’t over spend. This is actually the opposite of what you want to do. Remember, this initial period is about collecting as much data as possible. Bid high enough so that your product will show for that search term. It’s just as important to know which terms aren’t performing.
- Keep your match types general – use either broad or phrase match types when adding keywords to your manual campaign. This allows you to identify keywords similar to the ones you’re using once the data has been collected and analyzed.
- Stick with the process – Amazon tracks clicks and spend almost immediately but can take up to four days to register sales. Early on in the process it may appear that the campaign is ineffective, your initial reaction might be to pause the campaign because you feel like you’re wasting money. Give the system time to catch up before you make any decisions.
Step 3) Data Analyzation and Campaign Refinement
Once the system has had enough time to collect information (typically 2-4 weeks), use Amazon’s advertising campaign reports to dig deeper into what keywords customers are using to find your products. Make a note of keywords with the highest amount of impressions, clicks, and the lowest ACOS. Try to understand why those keywords perform well for you and how you can use that information to refine your campaign strategy.
Using Sponsored Product Ads to Increase Organic Search Rank
Once you’ve mastered using sponsored product ads, the final step is to take the information you’ve learned and use it to increase your organic search rank. Identify the top performing keywords from your Amazon Sponsored Product Ad s campaign and continue to refine your product detail page to include more content specific to those keywords. Do this enough and eventually you’ll see your organic search rank increase, ultimately decreasing the amount you spend on advertising and significantly increasing your ROI.
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