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An Introduction to Advertising on Amazon

March 16, 2021
Paid Search
8 Min Read

Amazon Advertising is a fast-growing platform for brands that want more sales without waiting for traffic to arrive on your product listing or store organically.

Your products can be featured in various ad formats, and get shown to people actively looking to buy on Amazon.

eCommerce is projected to reach over 476 billion dollars by 2024, and Amazon Advertising is a powerful way to ensure you don’t miss out on your share of that growth.

In this guide, we’ll show you what Amazon Advertising is all about, with advice, tips, and best practices to help you successfully grow using the platform.

What is Amazon Advertising?

Amazon Advertising is Amazon’s suite of tools to help brands promote their products and get more sales with paid ads. It was launched back in 2018, and is now the perfect way to promote your products within the Amazon ecosystem.

You can promote individual products, your store, run audio and video ads, and more. Amazon is continually adding new options you can test and leverage to grow your business.

How to Get Started with Amazon Advertising

There are a variety of advertising formats that you can test, including:

  • Sponsored Products: Sponsored Products Ads are the most common type of ad, appearing in various places around the Amazon search results when a user has searched for a keyword. They’re fairly simple to set up, but highly competitive.

  • Sponsored Brands: Sponsored Brands Ads appear after a search, appearing at the top of the results showing your logo, a branded headline, and multiple products in your range.

  • Sponsored Display: Sponsored Display Ads feature on Amazon and on third-party websites, driving interested traffic back to your product page where people can buy.

  • Audio Ads: Amazon’s Audio Ads are designed for Alexa-enabled Amazon devices, such as Echo, Fire TV, plus third-party devices that plug into Alexa. 
  • Video Ads: Amazon’s Video Ads are delivered to Amazon-affiliated sites and video media platforms (via Amazon Publisher Services).

Note: Amazon is regularly launching new advertising options for the platform, and updating the existing ones. To stay up-to-date, check out their own overview of Amazon Advertising

The best one for you will depend on your exact needs, and your goals. 

  • Do you want to generate awareness for your brand among shoppers?
  • Do you want more sales for a new product?
  • Do you want to drive repeat sales from past customers?

Answering these questions will help you determine the best ad formats and strategy to focus on. From there, you can build a campaign that aligns with your goals, rather than jumping in and launching mismatched campaigns — resulting in thousands of wasted budget.

When you’re ready to start, you can choose the right campaign setup for you and get up and running via the Amazon Advertising homepage.

Benefits of Using Amazon Advertising

There are multiple benefits to using Amazon Advertising. Let’s take a look at the biggest:

1. Get new products seen before they rank organically

It takes time to rank your products organically on Amazon. It can also be a vicious cycle — if you’re not ranking highly for your product keywords, you won’t get buyers. In turn, you won’t get reviews. Because your product isn’t getting bought or reviewed, Amazon won’t give your product a chance to be seen over already high-ranking products generating sales and reviews. 

With ads, you can break this cycle.

Your products will be front-and-centre for valuable keywords. You’ll generate more sales, and be able to generate more reviews from happy customers.

You’ll then improve your chances of ranking your products organically.

2. Put your product in front of buyers with high purchase intent

People visit Amazon to make a purchase, and promoting your product to those people is a proven way to generate sales.

Unlike many other advertising platforms, advertising on Amazon puts your product directly in front of customers with high purchase intent.

Most visitors will have their payment details stored and can checkout with one or two clicks — and this is brilliant if your product catches their eye. 

3. Use Amazon’s growth to fuel Your growth

Amazon’s focus on the long game has meant the platform has continued to gather pace over time, and looks set to remain as the major eCommerce player in the future. This means you can align your own business with this unstoppable rise.

By advertising on Amazon, you’re anchoring your brand to a fast-growing platform, and this is a huge opportunity. As Amazon continues to grow, you’ll get an influx of new buyers from around the world, all relying on the platform to search and discover the items they need.

Drawbacks of Amazon Advertising

1. You still need reviews

If your product has zero reviews, Amazon’s algorithms won’t favour you over another competitor who has multiple positive reviews — unless you’re willing to spend more per click.

But, even if shoppers see your ads, they won’t want to buy from you if you don’t have reviews.

You’ll need to put in effort to ensure your Amazon listing has reviews and social proof to have a chance of success. But, once you have reviews your product conversion rates will increase, and you won’t need to spend more than your competitors to compete for the same ad placements.

2. Geographic limitations

Depending on where you’re based, or your audience is located, you may not be able to use Amazon Ads. Even if you’re headquartered in a country where the ad format you want is available, it may lead to problems as you expand into new markets that aren't supported.

While it’s unlikely to be a significant limitation for most, you’ll need to plan ahead and be ready to find alternative ad platforms in your new markets if you have rapid expansion plans. 

How Much Can You Expect to Spend?

Most advertising formats on Amazon work on a Cost-Per-Click (CPC) basis.

The benefits of this are:

  • You can set your maximum CPC
  • You have control over total campaign budgets

The downside is that:

  • There’s no guarantee you’ll make any sales even if someone clicks
  • Some industries will have high CPCs 

You’ll be able to use Amazon’s keyword targeting to narrow down the terms your ads show up for, relying on either Automatic or Manual Targeting.

Automatic Targeting enables Amazon to show your ads when they believe is best. 

If you use Automatic Targeting, Amazon will determine what search terms to display your ads on, based on their past purchase data. The benefit of this is that Amazon’s colossal dataset may identify keywords and phrases you would never usually bid for, but that still have high purchase intent behind them. You can narrow down your automatic targeting by: close match, loose match, substitute, and compliment keywords.

On the other hand, you can use Manual Targeting. With Manual Targeting, you can define the exact phrases someone needs to type into Amazon’s search bar for your ad to be displayed. You can also choose to have your ads displayed based on the category someone is searching in. 

If you’re familiar with Google Ads, it won’t take long before you’ve got the hang of Amazon Advertising’s keyword targeting options.

The total amount you need to spend will depend on your campaign goals, but, you’ll always have control over your total spend.

Other Ways to Boost Your Exposure on Amazon

Despite Amazon Advertising being a solid way to increase sales you’re generating through Amazon, your ads should still be part of a broader Amazon strategy.

Here are three ways to improve your ROI from Amazon:

1. Increase CTR by Optimizing Your Product Title

You have 250 characters available to write your product title. Rather than simply include your specific product name, you can use this to add more detail. 

For example, rather than “Noise Cancelling Headphones”, your title can incorporate other relevant value propositions to increase your CTR. 

For example: “Noise Cancelling Headphones with Bluetooth 4.1 and 3.5mm headphone jack. Compatible with iPhones, Mac, Android, and PC”. 

The extra detail will attract buyers who see your product fits all of their desired specs.

2. Improve Conversion with High-Quality Product Images

Your product images should be clear, high-quality, and attractive to your potential buyer. You can incorporate multiple images into your listing, so make the most of it.

Include standard product photos, as well as lifestyle shots showing people using your product in real situations. Including high-quality images is a simple and effective way to increase your conversion rates. There’s no excuses not to have great photos on your listing today — all you need is a smartphone.

3. Follow-Up Post Purchase Asking for Reviews

Follow-up every purchase with an email asking for a review. Amazon has an automatic notification that goes out to anyone who buys your product. But, you can still trigger a “Request a Review” notification in the 4-30 day period after someone buys your product.

We’d recommend leaving this until the 14-day mark. By that time, anyone who was planning to return your product likely will have, so you’ll mainly get positive feedback.

Reviews will help your product listings get more clicks, more conversions, and increase the overall ROI you see from your Amazon strategy, both paid and organic. You don’t need many to start noticing the effects, either — having just 5 reviews increases the chance of a purchase by 270% compared to if you had none.

Wrapping Up Your Guide to Amazon Advertising

Amazon Advertising can be a powerful and effective channel to help you scale your eCommerce business. There are various advertising options on the platform, and as online shopping continues to gain prominence, this a smart time to start exploring new ways to boost growth.

If you need help with your Amazon Advertising strategy or execution, or with your broader eCommerce growth strategy, connect with pre-vetted marketers using Traktion’s on-demand talent network. It’s totally free for users, giving you a new way to find the best marketers.

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