Amazon Advertising: The Essential Guide

Since its launch, Amazon Advertising has grown rapidly. It generated a massive $31.2 billion in revenue last year and experienced 33% growth in Q4 alone.

The platform’s huge success is rooted in its ability to capture the right audience at the right time. But, by continuously expanding its ad types and technology, its rise is certain to continue for the foreseeable future.

If you haven’t started using Amazon advertising yet, here’s what you should know.

 

What is Amazon advertising?

Amazon Advertising is an ad platform similar to Google Ads. Like Google, the Amazon advertising model offers PPC bidding and a selection of ad types.

Amazon Advertising also uses an algorithm to ensure relevant products are presented to shoppers. This means products with high sales, positive feedback and related keywords are most likely to win ad auctions.

However, Amazon advertising holds one big advantage over Google. Its users have greater purchase intent. This means Amazon ads are more likely to generate sales.

Amazon is best known for its retail media advertising and this accounts for around three quarters of retailers’ ad spend. However, its demand-side platform also allows brands to programmatically purchase display, audio and over-the-top video ads across Amazon’s network – even if they don’t sell products on the Amazon marketplace.

 

The benefits of using Amazon advertising

Like any advertising platform, Amazon can help brands reach more customers, increase sales and build their brand. But it comes with its own unique perks too.

Access to a huge audience

In the US alone, Amazon receives two billion visits every month. Countless consumers also engage with its apps and devices. So no matter how niche your target audience is, you’re sure to reach them with Amazon Advertising.

Plus, because the Amazon Advertising model only presents highly relevant ads to users, your ad spend won’t be wasted.

Highly engaged shoppers

Like we said, browsers on Amazon have high purchase intent. That’s because they aren’t looking for how-to videos or interesting blog posts; Amazon is the go-to platform for finding products. In fact, 74% of all US product searches start on Amazon.

Trackable results

Whatever type of Amazon ads you run, you’ll gain access to tons of insightful data. Sponsored product ads come with sales metrics and keyword performance, while display ad reports include ACOS insights and view metrics.

These reports can highlight changing habits, consumer journey data and customer acquisition trends, which can help marketers make data-driven decisions across their business.

 

Types of Amazon advertising

Here’s an overview of the different ad types available on Amazon Advertising.

1. Sponsored product ads

Sponsored products ads are Amazon’s most popular ad type. They appear in search results, product pages and category pages.

These ads look just like regular product listings except they feature a ‘Sponsored’ label. Because they don’t require any ad creatives, these campaigns are very easy to set up.

2. Sponsored brand ads

Like sponsored products, these are PPC, keyword-targeted ads. But they are better for building brand awareness and are only available to members of the Amazon Brand Registry.

These banner-style ads appear throughout Amazon’s search results and can feature up to three products, as well as your logo. They can direct shoppers to product pages or your Amazon Storefront.

3. Product display ads

Product display ads look just like sponsored product ads, but they are specifically designed to encourage upselling and cross-selling. That’s why they appear on product pages, review pages and at the bottom of search results. These ads provide shopper’s with alternative product options and purchase inspiration. They also appear as recommendations in Amazon emails.

4. Sponsored display ads

Display ads are bespoke, eye-catching ads that can appear on Amazon’s home page and product pages, as well as third-party sites and apps in the Amazon ad network.

Similar to Google’s display ads, they allow brands to reach shoppers at various stages in the consumer journey. However, bidding isn’t keyword based. Instead, Amazon uses contextual targeting to help advertisers reach relevant audiences.

Ads can be purchased on a PPC or CPM basis. Brands can also use the Amazon DSP to buy display ads at scale.

5. Video Ads

You can push out videos on Amazon-owned sites, devices and apps across the web. Think IMDb TV, Amazon Prime Video, Fire TV and Twitch. These ads use a PPC payment model.

6. Audio ads

Most consumers now own a smart speaker and Amazon’s 10-30 second audio ads allow brands to reach them during their screen-free moments.

However, this Amazon marketing option doesn’t offer PPC bidding. Instead, ads are sold on a CPM basis and brands must commit to a hefty minimum spend too. Right now, audio ads are only available in the US, the UK, Italy and Germany.

 

How to get started with Amazon advertising

To get started, you just need to sign into your Amazon seller account. Alternatively, you can register for an ads account instead.

From here, your journey will vary hugely depending on your resources and your preferred ad types. However, here are some simple first steps to help you get started.

Set your goals

Whether you want to boost sales or increase brand visibility, you’ll find an Amazon advertising product that aligns with your objectives.

Choose your ad types

Once you know your goals, choosing an ad type is simple. In fact, Amazon highlights which ads work for different objectives. Video, display and audio ads are best for growing brand awareness, for example. Sponsored product ads are ideal for boosting sales short-term, while sponsored brand ads can help accomplish both.

Perfect your ad creatives

From here, your strategy will differ depending on your chosen campaign type. However, brands can control the content they present to shoppers in each case.

Brands using sponsored product ads, brand ads and product display ads should invest time in perfecting their product pages, as these strongly affect conversion rates. They can also use a Digital Shelf tool to ensure the content, pricing and rating of each listing is competitive.

On the other hand, video and display ads require engaging ad graphics and landing page designs. For best results, it’s a good idea to A/B test each design variable.

 

3 ways to optimise your Amazon ads

Using a combination of Amazon and third-party tools, brands can take their advertising campaigns to the next level. Here are three ways to do this:

1. Take advantage of Amazon’s new reporting tools

Recently, Amazon Advertising has introduced new tools to complement its standard reports.

The Amazon Marketing Cloud allows marketers to combine their in-house and Amazon Advertising insights to create custom reports and access more in-depth information.

Amazon Attribution can also be used to track off-Amazon marketing methods. By using both of these tools, marketers are sure to optimise their campaigns.

2. Analyse basket level data

By using a Where to Buy solution, brands can understand what their visitors buy on Amazon and other retailer sites. It highlights complementary products that shoppers tend to buy alongside yours, as well as competitor products that they buy instead.

With this knowledge, brands can improve their keyword strategies and Amazon product display targeting. It can also help you decide which group of products should feature in sponsored brand ads, video ads and display ads.

3. Optimise content with brand-exclusive tools

Brand owners on Amazon have access to extra tools, which can improve their campaigns.

Amazon Analytics, for example, provides insights that can improve ad targeting. While A+ Content and Amazon Storefronts can enhance your content and increase both organic and paid conversions.

Final thoughts

Amazon Advertising features so many ad types and tools that getting started can seem overwhelming. But marketers should take the time to become familiar with it, because the average conversion rate of Amazon ads lies just under 10%. This is considerably higher than most other platforms.

The Ultimate Amazon Strategy Guide