Everything that Businesses Should Know about Amazon Sponsored Products

Are you ready to utilise an incredibly popular ecommerce marketplace?

Amazon has, for many years, been the go-to ecommerce marketplace for sellers and consumers alike, and the platform is only continuing to grow in popularity as more consumers are choosing to take their shopping online.

If you’re an online retailer looking to capitalise on one of the most popular ecommerce marketplaces in the world, you’ll need to take advantage of something called Sponsored Products. However, with over two million sellers active on the platform, you’ll need to have some tips and tricks ready to pip the competition at the post.

To help you get started, we have created an Amazon Sponsored Products guide, outlining all the most important information and telling you everything you need to know in order to succeed.

What is a Sponsored Product on Amazon?

So, what exactly does sponsored mean on Amazon? It refers to a form of Amazon advertising that allows a seller to promote their desired product listing, helping to improve the visibility of the listing and, as a result, increase sales. They are also designed to target shoppers who are looking for products similar to the ones you are selling.

Sellers must set a budget to invest in their Sponsored Product Ads in order to get them to appear, and this is what differentiates them from organic product listings.

Amazon Sponsored Product Ads appear right at the top of Search Engine Results Pages (SERPs), as well as on the right-hand side, at the bottom, and even on product detail pages. Incredibly hard to miss, they are extremely valuable to sellers looking to reach a wider audience with their advertising campaigns.

Amazon Sponsored Products top points:

  • They are the most popular form of advertising on the Amazon platform.
  • They are crucial to the buyer’s customer journey as they appear on almost every page.
  • They have a high conversion rate, averaging around 10%.
  • They can appear on product detail pages and organic searches.

Benefits of Amazon Sponsored Products

Improve overall rankings – even though Amazon Sponsored Products are paid for, they can actually improve your organic rankings on the platform. Sales volume is one of the most important factors on Amazon and, these sales include not only organic sales but also sales from paid campaigns. Therefore, an increase in sales from promoting products via Sponsored Product Ads can boost your organic rankings.

Earn increased revenue – because Amazon Sponsored Products work on a Cost-Per-Click (CPC) model, the amount you invest is completely up to you. You can set a bid for each ad campaign to ensure you never exceed your budget. This makes the paid listings worth it, even though they require some investment.

Increased visibility – due to the optimal placement of Amazon Product Ads, sellers can expect to see higher volumes of consumers seeing and clicking on their ads. This increased visibility can then, naturally, generate more sales.

How to run Sponsored Product Ads on Amazon

Now you understand more about what Amazon Sponsored Products are, it’s time to learn how to set up and run your own campaigns. Below, we’ve set out all the information you’ll need.

How to set up your campaign

Step 1 – go to “Campaign Manager” in the Amazon Seller Central and navigate to the “Sponsored Products” tab.

Step 2 – next, click on the “create campaign” button.

Step 3 – from here, you can set your campaign name, budget, and duration of your campaign. We recommended laying your title out like so: Product + Target ACoS (Advertising Cost of Sales).

Step 4 – decide whether you want to run automatic or manual campaigns and then you’re done!

While these steps are simple, the maintenance and management of your campaigns can often be more complicated and time consuming, which is where the need for professional services can come in handy.

While automatic campaigns are ideal for beginners, manual campaigns offer more opportunities for control.

Please note, Sponsored Products will only appear if you own the “buy box”. One seller can own the buy box, which starts the checkout process directly from the product detail page. If you want to set yourself one major goal, it’s to make sure that you own the buy box.

Here are some top tips to help you own the buy box:

  • Have a history of successful selling
  • Generate a good number of positive reviews
  • Set competitive prices for your products
  • Always have enough stock to meet demand

These factors point to having a clean selling record, something Amazon will look at when deciding whether to reward you with the box.

Automatic or manual campaigns?

When advertising on Amazon with Sponsored Product Ads, you have the option to choose between automatic or manual campaigns. Both options come with their own unique set of advantages and drawbacks, so it’s important to learn about them to find the most appropriate option for you.

Benefits of automatic campaigns

  • Ideal for beginners
  • Saves time – you don’t need to enter keyword bids
  • Automatic campaigns allow Amazon to collect data for future campaigns
  • Allows for experimentation
  • Discover longtail search phrases you may never have considered before

Benefits of manual campaigns

  • Great for experts that know how to navigate the platform
  • You have the opportunity to maximise your ACoS
  • Allows for more precise keyword targeting
  • It’s easier to reduce and adjust your bids, or pause low performing campaigns
  • Amazon suggests keywords you may want to bid on
  • Gives you the opportunity to test different keyword ideas

Overall, both options provide sellers with some great advantages. If you’re unsure, start out with automatic campaigns and, once you feel more confident, you can move onto manual campaigns.

Do you need help with your Amazon Sponsored Product Ad campaigns?

The team at Diginius are experts in ecommerce marketplace management and PPC campaign optimising. Contact us today to find out more about how we can help you to make the most of your listings on Amazon and increase your revenue on the platform.

Chester Yang is the Microsoft Program Manager at Diginius with a background in economics and quantitative research.  

At Diginius, Chester focuses on nurturing partnerships with PPC agencies and integrating marketing and sales solutions.