What are Amazon Sponsored Products?

Amazon Sponsored Products are a common entry point for brands and sellers looking to advertise their products on Amazon. For those familiar with Google, Amazon Sponsored Products ads are similar to Google’s product listing ads, allowing you to promote individual products with precise keyword targeting. On Amazon, Sponsored Products ads appear on search results pages and product detail pages. This makes them appealing for advertisers who want to secure a higher ranking or exposure in specific keyword searches, or have their product advertised when consumers view relevant product detail pages.

The Basics

Amazon Sponsored Products are pay-per-click (PPC) ads used to drive traffic to individual product detail pages through keywords and product targeting. These ads appear in several locations, including:

• At any placement within the search results.

• On product detail pages adjacent to the Buy Box.

• On product detail pages in the carousel.

Where (and when) your Sponsored Products ads appear depends on where your bid lands among other bids for the same keywords or those targeting the same product detail pages.

Products promoted with Sponsored Products campaigns must meet certain criteria including:

• Must be eligible for the Buy Box (your product’s price can’t be too high, and your rating can’t be too low)

• Must be able to be shipped to all addresses in the U.S.

With the appropriate strategy, Sponsored Products ads are useful across nearly every product lifecycle stage. However, they are particularly important for brands launching a new product on Amazon that needs to capture sales without the benefit of a high organic ranking on the search results page. At the other end of the spectrum, these ad units are also useful for sellers who want to breathe some life back into a product with a declining sales rank.

How Amazon Sponsored Products Work

As Sponsored Products ads are bought on a PPC basis, you pay every time a customer clicks on the ad (you pay nothing if the ad is simply seen but not clicked). Amazon runs Sponsored Products on a second-price auction basis, meaning that the winner of the auction pays one cent higher than the second-highest bid price. For example, if you bid $1.00 for a given placement, and the next-highest competitor bids $0.75, you pay $0.76 assuming the ad is clicked.

You can target your Sponsored Products campaigns either based on keywords or product attributes. A given ad group (a subsection of a campaign) can either use Keyword Targeting or product attribute targeting (PAT), but not both.

1. Keyword targeting.

For keyword-targeted campaigns you have two high-level options:

• Automatic campaigns

• Manual campaigns

The primary (and arguably most important) difference between the two is that automatic campaigns do not have keywords. Instead, ads are served for any relevant customer searches based on information from the product detail page. If you use the automatic option, ensuring that your product detail page is thorough and well-targeted is a must.

Automatic campaigns are a particularly good option for newer brands or products, as a way to better understand which keywords will drive higher volume or conversion rates.

Manual campaigns target ads based on the keywords you select. You can have up to 1,000 keywords in an ad group, which functions as a sub-set to a campaign. Advertisers can set bids either at the ad group level or the keyword level, giving you a bit more control over your ad spend and targeting.

From a strategic perspective, it’s helpful to run an automatic campaign to gather some essential data and identify the best-performing keywords. Then, run a manual campaign for the same products, using those top-performing keywords. We call this strategy “Explore and Exploit,” using automatic campaigns to explore and then exploiting your findings in manual campaigns.

2. Product attribute targeting.

Using PAT, sellers can get their ads to show up alongside a specific set of products, brands, or items from a given price and ratings range. A given PAT ad group can either target a basket of ASINs (your own or others’) or a particular Category with refinement by brand, price, or reviews.

For example, you could create a manual Sponsored Product campaign and choose to target an ad group against the brand ‘Acme Industrials’ and against a 4-star review rating. Now whenever a buyer (i.e. a shopper on Amazon) sees a product from that brand (e.g. in search or in product details) that has a 4-star review, your ads will be allowed to bid for a spot on the page the buyer is viewing. If one of your ads wins the bid, it will show up on the page.

Product Attribute Targeting is powerful, but your products still have to be relevant to the search the user is performing. This means that you should use PAT only on brands and products that are in the same category and fit roughly the same descriptions as the things you are advertising.  For star-rating and price, Amazon will make sure to show your ads only when they are relevant to the search.