Amazon Sponsored Products: Guide (Updated 2024)

July 18, 2024
By The Badger

Over the past few years, Ad Badger has been at the forefront of managing countless Amazon sellers, empowering them to not just compete but dominate the search results. Our invaluable insight? Amazon Sponsored Product Ads (SPAs), available through Seller Central, stand as a potent catalyst for boosting conversion rates and elevating your product’s visibility. Consequently, this is precisely why we passionately encourage sellers to embrace ads on Amazon and sponsored products.

Picture this: as more sellers flood into the Amazon marketplace, the battleground of search results is poised to become even fiercer in the coming years.

Now, here’s the secret sauce – if you master the intricacies of a Sponsored Product Ads strategy via Seller Central today, you’ll have a substantial lead over your competitors, setting the stage for your triumph.

In fact, Amazon has tons of success stories on how their customers used SPAs to scale their business. Some of my favorites include Empire Case’s and ExportX. According to a report from Merkle:

Sponsored Products accounts for the majority of ad revenue, 88 percent, that Amazon makes from search-based advertising.

Merkle

Everything This Article Covers

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As you can see, SPAs live up to the hype, illustrating their undeniable value. Subsequently, The Badger will guide you through mastering them. You can look forward to learning about:

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We teach you how each PPC theory directly applies to your business.

Our Amazon PPC Coaching Services meet you where you are and guide you to where you want to go.

What are Sponsored Products on Amazon?

Amazon Sponsored Products are Amazon ads that specifically aim to promote the sales and visibility of your desired product listing. Importantly, these ads appear in Amazon search results, thereby enhancing the product’s discoverability.

Here are the reasons why Amazon Sponsored Products Ads are so great for Amazon Pay Per Click:

Sponsored Product Ads are the most popular type of ad for Amazon pay-per-click
They are essential to the buyer’s customer journey as they appear on almost every page
Sponsored Product Ads have a high conversion rate (~10%)
They can appear on product detail pages and organic searches

Amazon Ads itself concisely claims Sponsored Products are the best way to “show off your products, create with ease, control your costs, and track your success.”

If your goal is to increase sales and attract traffic to product pages, then you’ll want to learn how to use Amazon Sponsored Product Ads. You’re in the right place.

Where do Sponsored Products appear on Amazon?

Sponsored Product Ads are really hard to miss on Amazon because they appear at the top of the search results page, to the right, at the bottom, and even on the product detail page.

To the untrained eye, Sponsored Product Ads almost resemble organic listing results, blending seamlessly into the search experience. Notably, these ads appear above and to the right of the organic results, and are subtly marked “Sponsored.” Additionally, in a strategic move, they’re sometimes even displayed on competitor’s product detail pages, increasing their effectiveness.

Taking advantage of Amazon Sponsored Brands placements can be very powerful for you.

Since Sponsored Product Ads appear in so many places, they’re extremely valuable to sellers. Customers just can’t get away from them. They even appear on product detail pages.

Because Amazon Sponsored Product Ads are highly visible to many potential customers, they are key revenue drivers.

By advertising on Amazon, with Amazon Sponsored Product Ads specifically, your products are placed in front of shoppers who are lower in the shopping funnel, and these shoppers already know exactly what they want so they have a greater likelihood of buying your product.

Remember, this is Amazon PPC, so this means that you will bid against other sellers for more exposure to these potential customers. You decide how much you want to spend per click on each particular target, so you have a lot of control over your daily advertising budget.

What’s the best Sponsored Product placement?

Indeed, the top-of-search ad placement on Amazon’s SERP represents the most prominent and competitive spot for advertisers, offering prime visibility. This placement ensures that your ad appears at the very top of the results page, capturing immediate attention from potential buyers. While it has a higher cost due to increased competition, it yields better conversion rates, with over 67% of clicks going to products in this position.

Product Page placement, despite potentially lower CTRs, holds unique value for advertisers, often delivering strong sales results.

Furthermore, Rest-of-Search placement encompasses positions below the top row on search pages. Significantly, Amazon has introduced an update in 2023 that allows advertisers more control over bid modifiers for this placement, effectively addressing previous limitations and enhancing advertising strategy flexibility.

Learn everything there is to know about Sponsored Product Placements here.

Before we get started, it’s important to mention one important caveat of Sponsored Products.

Amazon Sponsored Products Will Only Appear If You Own The Buy Box

Amazon Sponsored Products Ads (like the rest of Amazon) are very competitive and they will only appear if the seller owns the buy box. Crucially, only one seller can own the buy box, which is the gateway that starts the checkout process and is prominently located on the product detail page.

Most people buy items through the Buy Box section on the product detail page. The highest-ranked by Amazon at that time will show up on the Buy Box section. The Buy Box winner will make more sales than any other seller for that product (if there are multiple high-ranked sellers then they will rotate.

Generally, winning the buy box means having a clean selling record.

Here’s a list of what Amazon looks at when considering who gets the buy box:

A history of successful selling
The number of good reviews you have
If you have a competitive price
How you handle your fulfillment
If you have enough stock
How new your product is

How do I set up an Amazon Sponsored Product Ads campaign?

We'll outline the steps to get started with Seller Central right here!

Check out our video on Sponsored Product Ad campaigns if you want to follow along in live time.

Steps to configure the How-to Schema widget:

Step 1 :Navigate to the Campaign Manager in Amazon Seller Central.

Navigate to the Campaign Manager in Amazon Seller Central and make sure you're on the Amazon Sponsored Products tab, not the Headline Search Ads tab.

Step 2: Hit the "Create Campaign" button.

Enter the HowTo Description with a relevant image to your description.

How to create a SPA campaign on Seller Central

Step 3 : Set your campaign name, budget, duration.

Set your campaign name, budget, duration. For campaign names, we recommend including the sponsored products name along with your Target ACoS.

Step 4 : Decide if you want to run an automatic or manual targeting campaign.

Decide if you want to run an automatic or manual targeting campaign and you're done! Not sure which one to pick? No problem, we got you covered. Buckle up.

The Difference Between Automatic And Manual Campaigns

I want to stress to Amazon sellers using Seller Central to utilize both manual and automatic campaigns for maximum keyword efficiency. They both are beneficial, and both have drawbacks.

Automatic Campaigns Are Great For Keyword Research

Firstly, let’s start with automatic campaigns, where Amazon leverages the product info to target the ads to all relevant searches. In this scenario, sellers can’t choose keywords and must leave their bids in the hands of Amazon, placing trust in the platform’s algorithm to find the best matches.

These types of campaigns, easily set up in Seller Central, because of their simple setup in the, and they bid on words you would’ve never of guessed customers search for. It’s like having your personal sponsored products campaign manager.

Benefits of Automatic Campaigns:

Great for PPC beginners because of the easy setup in the seller central.
You get to skip the hassle of entering keyword bids and have more time to read my blog.
If you run an automatic campaign, Amazon will collect data for you to apply to future campaigns. Amazon tracks clicks and spends, usually taking 2 to 4 days to process. It may take up to 2 to 4 weeks to gather enough data to see which campaigns are doing well.
Automatic campaigns allow for experimentation without putting that much effort in.
They allow you to show up for long-tail research you may have never guessed people would search for.

Manual Campaigns Offer More Control Over Bidding

Conversely, manual campaigns offer a different approach, allowing you to set your own keywords.

When starting a manual Sponsored Products campaign in Seller Central, you will have more control of the bid price and be able to fine-tune your bids to either maximize revenue or hit your Target ACoS.

Even though maximum profit and hitting the perfect ACoS is your end goal, performing a manual campaign isn’t as easy as a Sunday morning.

Sellers bid on either broad, phrase, or exact keywords, but it’s very hard to know which keywords are profitable before keyword research.

Benefits of Manual Campaigns:

Great for Pay Per Click experts who have time to set up manual campaigns.
You can maximize your sales volume and perfect your ACoS.
Bidding on keywords manually allows for more precise targeting and could lead to more sales if you are successful.
It’s easy to reduce bids or pause low-performing words.
Amazon suggests bids next to every keyword you wish to bid on, making it easier for the seller.
Have the keyword ideas you want to test? Manual campaigns help you do that.

Auto And Manual Campaigns Work Together

Automatic and manual campaigns form an unlikely friendship when working together. If you’re new to Amazon PPC, I suggest the Research-Peel-Stick-Block (RPSB) method.

To do this, you create an automatic campaign for a product, wait for the data to roll in so you know which keywords are profitable, and enter them in a manual campaign with increased bids. You simply use automatic campaigns for their keyword research and manual campaigns for their customizability.

If all this sounds like a lot to you, it might be worth investing in a PPC tool like Ad Badger which automates this whole process for you.

Ad Badger simplifies your Sponsored Product campaigns

Managing all of these Sponsored Product campaigns yourself can be time consuming when you have to do it for every single product. That could be up to a million SKUs depending how large of a seller you are!

Meanwhile, Ad Badger deploys the perfect Amazon Sponsored Products ads strategy for you every time with automated bid optimization.

With Ad Badger, you can get all PPC needs met in one place without a worry.

Ready to meet Ad Badger?

Take a peek at Ad Badger's powerful software and see how increasing your Amazon profits gets a whole lot easier.

Watch our Product Demo now

Common Mistakes to Avoid with Sponsored Product Ads

Diving into the world of Amazon Sponsored Product Ads (SPAs) is a big step toward boosting your sales and visibility. But, like any powerful tool, it’s easy to make mistakes if you’re not careful.

Let’s walk through some common pitfalls you should avoid to ensure your SPAs perform at their best.

Key Mistakes to Watch Out For:

Neglecting Keyword Research
Poor Budget Management
Ignoring Negative Keywords
Not Optimizing Product Listings
Overlooking Campaign Data Analysis
Relying Solely on Automatic Campaigns
Inconsistent Bid Adjustments
Ignoring Seasonality and Trends
Failing to Test Different Ad Variations

Now, let’s break down a few of the most critical mistakes:

Neglecting Keyword Research

One of the biggest mistakes you can make is not investing enough time in keyword research. Keywords are the backbone of your sponsored product ads, and without thorough research, you’re shooting in the dark.

Use tools like Ad Badger and Amazon’s Keyword Planner to identify high-performing keywords.

Continuously update and refine your keyword list based on performance data.

Poor Budget Management

Mismanaging your ad budget can either drain your funds too quickly or limit your ad exposure.

It’s crucial to start with a balanced budget and adjust based on campaign performance. Monitor your spending closely and allocate more budget to high-performing campaigns. Setting daily budget caps can prevent overspending and help you manage your resources effectively.

Not Optimizing Product Listings

Your sponsored product ads can drive traffic to your product page, but if your listings are subpar, those clicks won’t convert to sales.

Ensure your product listings are fully optimized with high-quality images, detailed descriptions, and relevant keywords.

Overlooking Campaign Data Analysis

Setting up your sponsored product ads is just the beginning. Many sellers make the mistake of not analyzing their campaign performance regularly. Use Amazon’s reporting tools to track key metrics like CTR, CVR, and ACOS.

Spread the Love for Amazon Sponsored Product Ads

By now, I want you to feel like Sponsored Products are the Simon to your Garfunkel, the Elizabeth to your Mr. Darcy, the Quavo to your Migos. You get the picture.

In conclusion, no matter what happens, you’ve now acquired the skills to implement Sponsored Product Ads, one of the most critical PPC strategies.

Amazon is always tweaking how Sponsored Products work through Seller Central, so sign up for our newsletter to receive more Amazon PPC gold sent straight to you.

Frequently Asked Questions about Sponsored Product Ads

What are Amazon Sponsored Product Ads

Amazon Sponsored Product Ads are pay-per-click (PPC) ads that promote individual product listings on Amazon. These ads appear in search results and on product detail pages, helping to increase the visibility of your products.

How much does it cost to run Sponsored Product Ads

The cost of Sponsored Product Ads depends on your bid amount and your budget. You only pay when someone clicks on your ad (cost-per-click or CPC). You can control your spend by setting daily budgets and bid amounts.

What are negative keywords and why are they important

Negative keywords are terms that you exclude from your ad campaigns to prevent your ads from showing for irrelevant searches. Adding negative keywords helps you save money by avoiding clicks that are unlikely to convert.

How often should I adjust my bids and budgets

Regularly review your campaign performance and adjust bids and budgets based on the data. Increase bids for high-performing keywords and reduce or pause bids for underperforming ones.

What should I do during peak shopping seasons

Plan your campaigns around seasonal trends and major shopping events like Prime Day and Black Friday.

Can I run Sponsored Product Ads if I don’t own the Buy Box

Sponsored Product Ads will only appear if you own the Buy Box for the product you’re advertising. Owning the Buy Box is crucial as it increases the chances of your ads being displayed and clicked on.

Resources & Links

The PPC Den Podcast