Advertising on Amazon
Today we are going to address some of the intricacies of selling on Amazon, starting with advertising. There is no doubt that ads are a fantastic way for Amazon to make money, but are they worth it for sellers, and how can sellers set up advertising in such a way that they are not losing money?
Is Advertising Worth It?
The short answer is yes, advertising on Amazon is absolutely worth it. Not only is the cost per click (CPC) typically low – under $1, but Amazon weights advertising in their product search algorithm. You also only pay when someone clicks on your ad and never for impressions. You could say that it is necessary to keep your products showing up at or near the top of search results. Presently – and this is always subject to change, but more on this later – Amazon has two ways to advertise your products: search advertising and headline ads. Right now, headline ads are reserved for those brands that have gone through the brand registry process with Amazon and have a trademark. Search ads appear in the top two results and the last two results.
The search ads are noted by the gray ‘Sponsored Product’ tag above the product’s title. It means that the seller has entered into an auction in order to see their product listed in one of these four spots. Prior to November 2017, Amazon also listed ads on the right side of search results, but has since stopped doing that. By restricting ads to the product results lists – and thus increasing competition, Amazon can drive the cost of advertising up over time.
We won’t be talking much about the headline ads as they are easy to set up and require little oversight. The search ads, however come in a variety of flavors, use keywords to help target your ads, and need pretty consistent maintenance – especially at first. We will briefly cover the types of keywords, how to discover them, and how to keep a tight watch over your ads and keywords. There is a bit of heavy lifting at first, but once your keywords are dialed in, you ads will b able to run on and on and be the conversion machines you need to move lots of product.
Now, when we talk about ads, most of the time we are talking about keywords. Amazon takes the creative off your plate by simply making any ad a product listing. This means that your keywords are doing the work to get your product listing to the top of the page. Those top spots are incredibly valuable, too!
70% of Amazon customers never look past the first page of results.
35% of Amazon customers click on the first product listed in search results.
64% of clicks are on the first three products listed in search results.
Keywords can be matched in four different ways: Auto, Exact, Broad, and Phrase. We don’t recommend using Phrase matching as the amount of wasted clicks is much greater than the other match types.
Auto matched keywords are based on your product listing and title. Amazon takes the keywords that you have associated with your product for organic searches as well as words you use in the title of your product listing and shows your ads when any of those keywords are broadly searched. If your product includes dimensions like 4×7, your product can show up if someone searches for 4, 7, or 4×7.
Broad matched keywords take into account plurals, words used before and after your keyword, and misspellings. Take the above results for ‘bike tool.’ The 4th ad for a backpack is more than likely using a broad match for ‘bike.’ That means that the same backpack could show up when a shopper searches for ‘bike light,’ ‘bike pack,’ or ‘black bike water bottle’ among other things.
Exact matched keywords are fairly self explanatory. They show up when a shopper uses that term exactly. The top result more than likely uses ‘bike tool’ as an exact keyword; therefore the search for ‘bike tool’ returned that as a result.
How to Advertise on Amazon
Start with an Auto campaign.
Simply start a campaign in your SellerCentral Campaign Manager and be sure to name it something with Auto. We typically name our campaigns after the product.
Add a single product listing for the product or SKU that you are looking to advertise.
Click on the Automatic Targeting radio button
Accept the initial suggestion for bid
And there you have it! You’ve created your first campaign.
At this point, you should set a strict daily budget and let the auto campaign run by itself for a week or two. This will allow your ads to run and gather data. After a couple weeks, you should go into your advertising reports and request a search terms report. This will give you a list of the search terms that shoppers used to find your ads, as well as how many clicks and orders your ads have generated.
In our next article, we will get into the broad and exact matches and how they work in your efforts to discover keywords and keep you ACoS low!