• Yoda Yee

Everything you need to know about Amazon Sponsored Products

It’s great to grow organically – long term, it’s what you want – but a little boost can go a long way, especially at the beginning.


Amazon Sponsored Products, the pay-per-click advertising platform that allows sellers to place relevant ads in searches for products like their own, continues to be a highly effective and popular route to get items to those who might buy them.


There’s a reason why Sponsored Products is Amazon’s single most lucrative advertising format – it places sponsored products in organic searches for similar items, as well as within the product pages themselves in the display carousels.


Far from being subtle, on any given search Sponsored Products will be displayed prominently at the top and on the sides of searches, and have generous space on product pages. The aggregate effect is that pay-per-clicks will get you valuable real estate in the eye of potential buyers.


For sellers and vendors, the advantage is three-fold: if you’re in the early stage, it’s a great way to get your name out there and your brand recognition up, it’s more generally an effective way to to increase your sales, and it allows to you to control your costs as you only pay for the clicks you get and can actively track your ad spend.


What kind of increase can I expect?


According to Amazon, ASINs tend to see an average increase of 54% in glance views and a 40% increase in units ordered within the first year of Sponsored Product campaigns.


In recent years, research has also shown that conversion rates for pay-per-clicks on Amazon usually hover just under 10%, a huge increase from the eCommerce average of 1.33% around the same time.


So whether you’re trying to get a new release or best-selling item out there, promote a seasonal item, or clear excess stock, it has proved to be an efficient avenue.


How to go about it?


Getting started is fairly straight forward. You set a campaign duration (or leave it permanent!) and a budget, after which you set the keywords (if it’s a manual campaign) or products to target that Amazon will automatically match to search items.


Lastly, you just choose the items that you want to advertise and set your bid.


It is, however, a double-edged sword. Because they’re widely known to be so effective, it is also wildly competitive, and the bids tend to climb.


If the main category you’re going for turns out too expensive relative to your product, an alternate strategy would be to go after related categories that would still catch people’s eye.


Bear in mind that not all items are eligible for Sponsored Products, and used, refurbished, as well as adult products cannot be promoted through the channel.


Automatic or Manual?


Depending on how much control you want to have over the details of the campaign, you could either let Amazon take the lead or have more of a hands-on role yourself.


Automatic campaigns are good for those new to the pay-per-click game and don’t want to have to play around too much with sorting out the keywords.


Amazon will automatically take care of the targeting, going after keywords based on your product information – which can mean bidding on keywords that wouldn’t have even occurred to you. They also give you great insight into which campaigns are getting the most bang for your buck, as Amazon collects all the necessary data over a few weeks.


Manual, on the other hand, is better for more seasoned hands and gives you a greater degree of influence over the campaigns.


You’ll be able to calibrate the bid price, put in the exact key words you want to target, and have more of a guiding hand over maximising revenue and hitting your optimized cost of sales. It also lets you reduce low-performing bids.


You don’t necessarily have to choose between one and the other, either. The benefits that automatic searches give in finding the right keywords can then be put into a manual campaign to dial up the customizability.


Control the buy box


Sponsored Product ads will appear only is the seller owns the buy box – the box on the product detail page through which most purchases on Amazon are made. The highest ranked seller for a particular product will “own” the buy box and reap the benefits.


Amazon’s system will look at a number of factors to determine who gets that top spot, including a history of successful selling, a good price point, amount of stock you have, good reviews, how good your fulfilment is and how new the product is.


If there are more than one top sellers, the buy box will rotate.


For products to be eligible for the buy box, they must be in stock, have been selling for at least 90 days, and should not have a significantly higher cost than the average for the previous weeks to two months.


To find out more about how to leverage Sponsored Products for your specific business, reach out to us at kevin@oldstreetmedia.com


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