Everything You Need To Know About Amazon Sponsored Products
As an agency managing hundreds of sellers, we know that Amazon Sponsored Products is and will continue to be one of the most powerful tools for driving discoverability and incremental sales for Amazon sellers.
For those of you unfamiliar with the platform, Sponsored Products exists within the Amazon Marketplace and drives traffic to an Amazon detail page.
We anticipate the “cost to play” will increase as more Amazon sellers flood the Marketplace increasing demand in the bidding auction.
In response, sellers will have to rely on sophisticated paid marketing campaigns and strategies to outsmart their competitors.
The following blog post is a deep dive into the Amazon Sponsored Products marketing techniques every seller should be leveraging including campaign structure, data segmentation, keyword harvesting, and refined product targeting to maximize your paid advertising conversion rate.
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What is Amazon Sponsored Products?
Before we dive into advanced seller strategies, let’s discuss the building blocks of Sponsored Products and how it impacts sellers. Sponsored Products is a PPC platform, which exists within the Amazon Marketplace and drives traffic to an Amazon detail page.
These ads exist on the right rail of the Amazon SERP, at the top and bottom of the SERP, and on the carousel on product detail pages.
Sponsored Products also impact a seller’s overall Marketplace presence by providing an acceleration program for newer or low-exposure ASINs, increasing Discoverability for your top Buy Box offers and acting as an incremental revenue driver.
Sponsored Products Ads Can Appear in the Following Categories:
Depending on your goals, Amazon sellers can build out campaigns to launch a new product(s) or to feature product(s) that are seasonal or in demand.
With Sponsored Products, sellers will have to determine how much they want to spend, what time period they want to advertise for and which products they want to feature.
There are two ways to build & manager your campaigns within Sponsored Products: Automatic vs. Manual
- Automatic targeting located in the Sponsored Products Campaign Manager enables sellers to make changes more fluidly. With automatic targeting, Amazon targets ads to all relevant customer searches based on product information.
- Manual Targeting is a process by which sellers manually set keyword options for Sponsored Products ad campaigns.
Pro-Tip: Automatic targeting lets sellers skip the process of selecting keywords. However, Automatic Targeting removes the higher level of control associated with Manual Targeting. While Manual Targeting lets sellers explicitly identify the keywords for searches their ads are surfacing for.
1. Start with Automatic Campaigns
Once, you’ve registered for Sponsored Products, we recommend sellers build out Automatic Campaigns first, to help better understand which ASINs you can and should run for Sponsored ads.
Automatic campaigns, also known as Automatic Campaign Targeting, are designed to drive more impressions and sales of your products.
With Automatic campaigns, Amazon will target your ads to all relevant customer searches based on your product information.
Pro-Tip: Product selection bias is probably the number one most common inefficiency, which is why running Automatic Campaigns and harvesting data is a critical first step in your Sponsored Products’ advertising strategy.
Often, sellers have products in mind that they want to do well or that they believe will do well ―so those are the products that they will advertise, bid higher on,
or put in multiple ad groups regardless of the performance.
We can almost guarantee that no seller has a product catalog where, 100 percent of their products are going to be winners or 100 percent are going to be losers.
The good news is sellers don’t have to make it a guessing game when it comes to campaign structure and keyword selection.
Since Amazon customers tend to have a higher intent to purchase, selecting the best keyword for your products is a vital component of your marketing strategy. Bidding on the right keywords for your products can improve your page sales rank and organic listings, and will ultimately influence your product sales.
Amazon sellers should analyze their customer search term data to make strategic decisions on which products and keywords to bid higher or lower on. This is why we recommend that advertisers utilize the Search Terms Report for Sponsored Products located in Seller Central as their main source of keyword harvesting.
2. Keyword Harvesting
In the past, the Amazon Search Terms Report provided sellers with data including how many impressions, clicks, sales, etc. each search term received. The report
also indicated the exact product SKU associated with that search term, which was extremely valuable data for advertisers.
Unfortunately, Amazon updated the report so it no longer identifies which product is associated with the search term.
For example, although sellers can still see in the report that the term “mascara” is converting well—Amazon no longer identifies which SKU it is associated with, leaving many advertisers in the dark.
This change to the Search Term Report inevitably made it more difficult for sellers to identify the relationship between keywords and products.
Although we don’t know the reasoning for the changes, we have discovered a proposed solution to this issue by structuring campaigns differently based on catalog size.
Implement a “1 Sku per Ad Group” Campaign Structure:
To start, we recommend building your campaign structure with only 1 SKU per ad group. As an agency managing hundreds of clients on Sponsored Products, we’ve found that segmenting SKUs by Ad Group greatly increases the precision and granularity of bid adjustments and keyword harvests.
For example, if you have a catalog of a 1,000 SKUs, you should have a 1,000 ad groups. We’ve developed several unique campaign structures to better manage large (300+ products), medium (30-300 products) and small catalogs (1-30 products).
Pro-Tip: In the past, Sponsored Products campaign creation has been a manual and tedious process where campaigns had to be created one at a time and products added individually (which was fine for sellers with smaller catalogs but difficult for sellers with larger ones). Now, Amazon sellers have access to the Bulk Operations for Sponsored Products which allows sellers to manage their campaigns through excel documents.
By segmenting the campaign, this solution directly impacts the bidding strategy and the overall success of the campaign. In simple terms, more granular campaigns = more control over your products & their advertising strategy.
Which metrics qualify for a strong keyword term?
When you analyze your Search Term Report in Sponsored Products, you want to look at the raw data. The report will include a variety of metrics (per SKU if you segmented your report as mentioned above) but the most telling data will be found in:
- Order Numbers: The total number of converted orders per keyword/search term per SKU.
- Product Sales: The total number of product sales per keyword/search term per SKU.
- Clicks: The total number clicks per keyword / search term per SKU.
3. Build Your Manual Campaigns
Once you’ve identified your top keywords (high number of clicks, order numbers, product sales), the next step is to build out your Manual Campaigns by adding
the SKU(s) to bid on each keyword.
Even if your keyword fails, you can always trace it back to the data. Keep in mind there is a possibility of shifts in the market, including seasonality or strange
trends, but at one point that customer search term was popular.
It’s important to remember that keyword harvesting is a continual process. It’s not a one and done. You want to continually run the search terms report to
pick up new trends. Sometimes, you may discover search terms that you never thought would be popular for a certain product.
Why do some keywords not get many impressions even though they are considered relevant?
Amazon takes a lot of things into consideration when running your Sponsored Product ads. Even though the specific keyword may be relevant to your product,
they are also looking at sales history, velocity, reviews, etc.
They want the user to have the best experience that they can provide. Also, impressions are not a very actionable data source. Amazon counts impressions even if the ad shows up on the 30th page of results.
What about Negative Keywords?
As important as it is to identify popular keywords for your products, it is equally as important to locate which keywords are having a negative impact and draining your campaign ad spend.
Negative keywords allow sellers to refine and sculpt their target audience to improve the performance of their Sponsored Products campaigns.
One of the reasons why we’re really excited about the Negative Keyword functionality is because it gives Sellers an opportunity to get more efficient. Where we actually begin to see the impact of Negative Keywords is through a lower cost of sale and a higher ROI.
Essentially, with optimizations such as Negative Keywords, sellers are able to see a bigger impact for each and every advertising dollar.
Keep in mind, you can also identify negative keywords through the Amazon Sponsored Products Search Terms Report.
“If you are spending a lot of money on Sponsored Products, then you should definitely pay attention to negative keywords,” Nick Sandberg at Marketplace Program Development Manager at CPC Strategy said.
“I’ve discovered sellers who have $200 or more spend on a keyword that is not acquiring any clicks and is not associated with the product at all. Those kinds of terms are something you don’t want to show up for.”
“For some larger brands – that might not seem like a lot of money but for other (small to mid size) brands who are concerned about budget, it’s a
good way to be tight on your marketing dollars. Regardless, it should be important to everyone regardless of your company size.”
In the following blog post, we outline several examples of how advertisers can use negative keywords to refine their campaigns.
4. Select Your Keyword Match Types
Keyword match types allow sellers to fine-tune which customer search terms their ads may be eligible to show against. Sellers can choose from broad, phrase, and exact match types.
According to Amazon, broad match keywords will give the most traffic exposure, while phrase and exact match will restrict traffic to a more precise target audience.
Broad Match – This match type offers ads broad traffic exposure. A customer search term will match if it contains all the keyword terms or their synonyms. The customer search term can contain keywords or synonyms in any order.
Phrase Match – The customer search term must contain the exact phrase or sequence of words. It is more restrictive than broad match and will generally result in more relevant placements for your ad.
Exact Match – The customer’s search term must exactly match the keyword in order for the ad to show, and will also match close variations of the exact term. Exact match is the most restrictive match type, but can be more relevant to a customer’s search.
Pro-Tip: When creating a keyword in Campaign Manager or using bulk uploads, sellers must specify a match type. They can’t change the match type of an existing keyword, but they can add multiple match types for one keyword. You can also select match types for Negative Keywords.
5. Bidding Strategy
When it comes to your bidding strategy, another metric advertisers should follow closely is the Advertising Cost of Sale. Sellers should analyze which keywords are driving clicks—but not converting, those are the inefficient ones.
Know what your cost of sale goals are, know what that acceptable threshold is, and use that as the benchmark for when you should start making decisions.
When should I start bidding down on specific keywords?
For example, you may discover a specific keyword is gaining a lot of traffic, but at an ACoS 40%, some sellers might consider that too high.
For the above example, this advertiser may want to consider lowering the bid for a keyword term with a high ACoS at 40%.
Another metric sellers should reference in their search terms report is the average CPC for each keyword term. For example, if the average CPC is .75 for the keyword term “eyeliner” with a ACoS of 40%, you might want to lower your bid to .45 to get a little closer to that ACoS sweet spot of 20% to 25%.
When should I start bidding up on specific keywords?
On the opposite side, if you find a keyword term has a low ACoS (below the 20% to 25% benchmark) you may want to consider raising your bid to increase clicks and
overall traffic for that term/product. In the event, the campaign fails—you can always reference the data.
Amazon Sponsored Products Success Story:
CAPx Amazon is CPC Strategy’s proprietary in-house analytics tool for managing our Sponsored Products advertising efforts.
This technology provides our Amazon experts with an enhanced suite of tools to execute a sophisticated Sponsored Products advertising strategy.
“CAPx is an advanced level approach that can’t be mimicked through Campaign Manager within Seller Central,” Pat Petriello, Head of Marketplace Strategy said.
“Thanks to CAPx, we can be responsive to market change through the implementation of advanced rules, rank tracking capabilities – all customized for a specific goal.”
“As the Marketplace becomes more mature, our clients are going to expect a certain level of sophistication and we know we can achieve that through the use of this tool.”
In the blog article below, we showcase how our unique CAPx Bidding Technology was able to significantly improve client performance in less than a month:
Want to learn more about Amazon Sponsored Products, email firstname.lastname@example.org.