As of June 2018, Amazon has over 300 million users, most of whom visit the site when they’re ready to buy. With about $232 billion in sales in 2018, Amazon is clearly a global leader in e-commerce. And the biggest revenue segment of Amazon in 2018 was retail products.
These figures show Amazon is well populated with price-conscious shoppers who are amenable to hearing about a new deal and very likely to buy close to or at the time of viewing that ad. U.S. advertisers are beginning to catch on, with over $4 billion in estimated ad revenue from last year alone.
Amazon recently rebranded all of its advertising products under a single brand of “Amazon Advertising” in an effort to simplify the process of purchasing, creating and managing campaigns. If you’ve confined your CPC campaigns to the major players so far, now’s the time to consider moving beyond Google and Facebook and exploring what Amazon Advertising can do for your brand.
Amazon Ads: Sponsored Products and Brands
Amazon offers a few basic advertising solutions, in addition to more customized advertising options (detailed in the next section).
First, Sponsored Products ads highlight individual product pages on Amazon and are built on the familiar cost-per-click (CPC) model. In other words, the advertisements themselves display at no cost to the advertiser. Instead, the ads accrue fees based on a bid that the advertiser commits to pay each time the ad is actually clicked. Bids are competitive to differing degrees. The more competitive the bid, the higher the CPC and the more frequently Amazon will display your ad to viewers whose search terms match your selected keywords.
Sponsored Product Example
Additionally, you can select Sponsored Brands ads to highlight your brand and up to three of your products. (These ads used to be known as “Headline Search Ads.”) Sponsored Brands ads use the CPC model as well.
Sponsored Brand Example
The Amazon Advertising platform is similar in both process and setup to Google search ads. When an Amazon user types in a brief description of an item and searches Amazon for that product, most of the products that are displayed in the results are organic results, sorted by the user’s preferences (defaulting to “Featured”). But some will be designated as “Sponsored” or “Ad.” These are Amazon advertisements. These ads are displayed at the top of the results list—that is, before the organic featured products—and again at the bottom of each page of results.
How much do Amazon ads cost, roughly speaking? According to AdBadger statistics for November 2018, the average CPC for Amazon ads is $1.01. The exact CPC depends heavily on a number of things, mainly the amount of competition for your specific keyword and the type of product you’re advertising. Of course, as the advertiser, you set your own budget based on your strategy and goals.
By the way, as you conduct your own research you may run into abbreviations such as AMG, AMS and AAP in older articles. These were Amazon’s prior advertising programs; respectively Amazon Media Group, Amazon Marketing Services, and Amazon Advertising Platform, all of which were rebranded and rolled into “Amazon Advertising” in September 2018.
Other Kinds of Amazon Advertising
In addition to the CPC-based Sponsored Products and Sponsored Brands advertisement options, you can also choose from additional products offered by Amazon Advertising.
Display ads help to highlight your brand or a specific product across a variety of specific websites, apps, and mobile devices, both on the Amazon domain and off it. The Amazon display ad product operates much the same way Google’s display network does. Display ads are available to brands without an Amazon seller or vendor account. You can have your display ads launch to an external website, as well as to an Amazon product page or storefront page.
Additionally, if you’re interested in pursuing video advertising, Amazon offers exposure on all its related properties and devices, such as IMDb.com, Fire TV and more. Video advertisers don’t have to be Amazon sellers, and can either build their own creative packages or get assistance from a managed-service package. The latter option may be much easier on small brands without a lot of video ad experience under their collective belts, but they do require a minimum initial spend of $35,000. Clickable video ads can direct users to Amazon product pages or any other website you select.
Finally, if you’re looking for something truly out of the ordinary, explore Amazon’s custom advertising options. For example, you can integrate a selected product placement or brand message into an Amazon initiative or campaign, or plan and execute a large-scale live event to promote your brand. The cost will vary depending on the goal and scope of the design, of course, but will usually require a minimum guaranteed spend.
Who Can Advertise on Amazon?
Other than the specialized products outlined above, you’ll need an Amazon seller or vendor account. The cost for these accounts starts at about $40 per month plus fees. Products must be eligible for the program; ineligible categories include adult-oriented products (i.e., sexually explicit content or purpose), as well as used or refurbished products.
If you’re selling physical products to consumers, as opposed to businesses, Amazon can provide a vast audience of savvy, ready-to-buy prospective customers for your ads. For brands that already have an Amazon presence, creating an ad campaign is relatively straightforward.
Crafting a Winning Amazon Ad Strategy
There’s no need to completely reinvent the CPC advertising wheel with Amazon Sponsored Product ads. Much of the underlying strategy behind Google Ads (formerly AdWords) can be transferred to the Amazon platform.
However, given the nature of that platform, it’s smart to focus on your product’s major categories and build a strong ad organizational structure for your campaign around those categories. Keep them between 15 to 30 keywords per group. Then you can create relevant ads around each keyword group.
With Amazon ads generally and Sponsored Product or Brand ads in particular, it’s crucial to craft tight ad copy that connects immediately with your prospects and creates an immediate sense of urgency. The more specific your copy is, the more successful the ad will be. Amazon shoppers are skilled in comparing similar items on very detailed features, such as exact dimensions for decorative items or weight limits for chairs, so be precise here.
Consider bidding on well-known brand names, even if you’re not selling that specific brand. For example, let’s say you’re advertising women’s athletic socks. First, enter that broader search phrase (“women’s athletic socks”) and review the results for the major popular brand names, which seem to include Saucony, Under Armour and more. Then include those brand names in your bidding strategy.
Finally, pay attention to your negative keyword strategy. Negative keywords weed out inaccurate or weak matches to your actual keywords. This helps manage your budget by reducing views from people who aren’t really looking for what you’re selling. As an example, if your advertised product is a set of drinking glasses, you might want to list “eye” and “eyeglasses” as negative keywords. That way, people looking for vision aids won’t see your ad.