Amazon ads change every day. An ad that brought you sales yesterday may be ineffective tomorrow, so you need to keep an eye on your campaigns and be flexible.

There are currently three types of advertising on Amazon:

• Product promotion ads (SP ads)

• Sponsored Brands Ads

• Product Display Ads

Among them, SP is the most common form of advertising and also a type of PPC (pay per click) advertising. So today we will mainly talk about SP advertising. Before placing SP advertising, do you know these contents?

Amazon advertising is much more complicated than you think. If you think you can just leave it alone after setting all the parameters, then you might as well not do SP advertising. If you want to increase your income and build a brand, you should treat it like a product listing, constantly optimizing, testing, and discovering patterns.

1. What is Amazon SP Advertising?

Amazon SP advertising is an advertising service provided by Amazon to sellers, allowing sellers to promote their products or brands through Amazon's official channels, making it easier for consumers to discover and purchase products.

We can understand what Amazon SP advertising is from two aspects.

• In a broad sense, Amazon SP ads are pay-per-click ads and are one of Amazon ads. Among them, SP ads are the most convenient and easy to use, and are used by the most sellers.

• In a narrow sense, products or brands that place Amazon SP ads will occupy the most advantageous position in search results, making them more likely to be clicked and purchased.

Therefore, Amazon SP ads are ads that sellers win premium positions in Amazon search results by bidding on keywords. Every time a consumer clicks on an SP ad, the seller who places the ad will pay for the click, which is called PPC advertising.

Basic indicators:

• Cost per click (CPC) : CPC = expenditure ÷ number of clicks. By calculating CPC, sellers can roughly understand how much it costs to get a click, and your bid is usually higher than the CPC. Calculating CPC helps sellers determine how much it costs to get each click and understand what the return on investment is. A high CPC fee indicates that the keyword bidding is fiercely competitive.

• Click-through rate (CTR) : Click-through rate = (number of clicks your ad received ÷ number of ad impressions) %. For example, if your ad was shown 1,000 times and was clicked 10 times, your CTR is 1%.

  
  

  The CTR depends on the product and its category. Generally speaking, a product CTR of about 0.5% for small and medium-sized sellers is good, and only highly matched brand-specific search terms may have a CTR of about 5%. Most CTRs are below 3%. Extremely precise match keywords usually have a higher CTR of about 5%, and most broad match target keywords have a CTR of less than 1%.

• ACoS: Advertising cost-effectiveness ratio, is a key indicator to help sellers measure the cost of advertising. ACoS = total advertising expenditure ÷ total advertising sales × 100%.

• Conversion rate: When a consumer buys your product after clicking on an SP ad, it is recorded as a conversion. Even if the consumer buys 15 products, it is still recorded only once. This is because the conversion rate is counted by the number of transactions, not by the quantity. Conversion process: Amazon displays your ad -> Consumers see your ad -> Consumers click on the ad -> Consumers buy the product -> The ad has been converted into an order.

• Impressions : On Amazon, impressions are the number of times your product is shown to consumers, regardless of whether it is displayed on the search results page or on the product details page. The ad placement of the product depends on the product relevance and bidding, so you don’t pay for impressions, but for the number of clicks by consumers.

2. What kind of sellers can place SP ads?

According to Amazon's Virtuous Cycle, the more a seller does for Amazon and its customers, the more choices and opportunities they get. Conversely, the more a seller sells, the better it is for both the seller and Amazon. Of course, the more money Amazon makes from a brand or product, the better the product's relevance and ranking performance, perpetuating the cycle.

There are two types of sellers on Amazon:

• 1P vendors Amazon self-operated sellers

• 3P sellers Third-party sellers

In terms of advertising, Amazon provides the most and best to Amazon-operated 1P sellers.

1P sellers can run a range of Amazon ads, including:

• Sponsored Products Ads

• Sponsored Brands Ads

• Product Display Ads

Only 3P sellers who have registered for Amazon brand registration can use SPA and SBA. One of the reasons for sellers to register for Amazon brand registration is to be able to use SBA. Another reason is to protect the brand and prevent copycat sales.

The following figure shows the permissions that sellers can use for Amazon advertising:

3. What benefits can Amazon SP advertising bring to sellers?

1) Introducing new products to the market

That is to say, if you develop a new product, you can gain exposure on Amazon by placing Amazon SP ads and start selling it.

2) Use the halo effect to boost product sales and rankings

Since you have placed SP ads for your products, your sales and rankings will increase. These changes will help you get more natural search traffic.

3) SP advertising: a new customer harvester

Nothing is better than SP advertising to attract new customers, especially in the consumer goods market. And then, new customers are likely to make repeat purchases and become your brand loyalists.

4) Promote sales

If you think the first few are not very useful to you, then you can rely on SP ads to promote sales. Spend $1 and make $2, why not?

What needs to be emphasized here is that SP advertising is a necessity in today’s fiercely competitive environment of Amazon. As a seller, it is not enough for you to just use SP advertising, you also have to do better than your competitors.

Note: SP ads do not display product ads on all pages, but appear at the front of the search results page after consumers search for relevant keywords. The display environment of ads has changed a lot, especially considering the mobile device side.

To achieve sales, your products must be displayed in front of consumers so that they can be clicked and purchased, but they must not be offensive. Therefore, you have to make the product ads appear "low-key" at the top of the search results page, in the sidebar, and on the product details page of your competitors. This is the significance of running SP ads.

4. SP Advertising Series

As shown in the figure, an Amazon SP campaign contains multiple ad groups and their contents.

1. Set up SP campaign

In a SP campaign, you need to set up the following:

(1) Campaign Name

Choose a campaign name that is simple, captures the nature of your ad, and is easy for you to remember.

(2) Target ACoS

ACoS - advertising cost-effectiveness, is a key indicator to help sellers measure advertising costs.

ACoS = total advertising spend ÷ total advertising sales × 100%.

For example, if your advertising costs are $10 and your total product sales are $100, your ACoS is 10%.

If the actual performance of the ad is different from the original strategy, the seller can adjust the ACoS. Based on experience, it is recommended to set the ACoS to 25% at the beginning.

(3) Targeting Type Advertising delivery mode

• Automatic delivery mode: Amazon algorithm selects related keywords based on your listing content and competitor products. It is recommended that sellers run an automatic campaign with a low budget to discover new effective keywords.

• Manual delivery mode: As the name suggests, when setting up a manual campaign, sellers have to choose the keywords to bid on and create targeted ads with broad match, phrase match, or exact match to attract consumers who search with specific terms. Sellers can use optimization tools suitable for Amazon PPC ads to research keywords.

(4) Daily Budget

Set a daily budget to limit your advertising costs for one day.

If you are running an automatic campaign, it is recommended to set the daily budget to $5-10; if it is a manual campaign, it is recommended to set the daily budget to $20.

(5) Ad Groups

Within each campaign, there are also ad groups. Within a single ad group, you’ll need to set up these:

• Keywords

• Keyword Match Type

• Default Bid

• Negative Keywords

The keywords in your ad group tell Amazon what terms your product is associated with. The phrase or words you choose determines which page your ad will appear on. Amazon will match the keywords included in your ad group with the words that customers search for. If your keywords and customer search terms match, then your ad will appear on the search results page.

3. Search terms

Search terms are the words or phrases that consumers enter when searching on Amazon.

Amazon matches user search terms with the keywords in your ads to display the most relevant products. Different keyword matching types will match different search terms.

The following figure is a user search term report found using the PPC advertising optimization tool - Ignite's Advertising Platform.

4. SP advertising keyword matching method

(1) Automatically match keywords

Automatic advertising automatically matches keywords. Amazon's algorithm automatically selects product keywords based on your and your competitors' listings.

advantage:

• Fast and simple

• Big Data

• intelligent

shortcoming

• No control over ads

• Having to pay for invalid clicks

Amazon will not help you solve these problems because SP advertising is the largest source of revenue for Amazon advertising.

Example: Apple Slicer

The following are the automatically matched keywords recommended by Amazon, which look a bit strange:

• b0199sxmte

• Vitamin blade

• potato peeler

• potato cutter

• apple corer

• apple peeler

• fruit peeler

• pampered chef chopper

• Fruit cutter

• peeler with grip

• pie carrier

• potato chopper

• b01mqdal0a

• gourmet chef

• B00ezqqo8m

• get rid of love handles

• mandoline slicer

• pampered chef

But Amazon is customer service-centric after all, so it won't bluff when it comes to collecting customer data.

That is to say, these keywords are indeed related to apple slicers through ASIN/SKU to some extent. It’s just that for sellers who run manual ads, it takes time and money to find out the connection.

(2) Manually match keywords

Sellers who choose manual campaigns have three matching methods when placing keyword ads: broad match, phrase match, and exact match.

• Broad match : If you set a broad match keyword type, your ad will appear when customers search with related keywords, regardless of spelling errors, singular or plural, or order. This method can match customer search terms very well and bring in a lot of traffic. However, customers who use this search term may not be looking for your product, so it may cause invalid clicks and traffic will not be converted.

• Phrase match: Sellers narrow down the target search terms to specific phrases, and customer search terms must contain specific search terms (allowing singular and plural, a small number of spelling errors or reversed word order). Compared with broad match, phrase match is more accurate. In the case of phrase match, your product is more likely to be what consumers want, and the conversion rate is higher.

• Exact match: Customer search terms must completely match the keywords in order (singular and plural, very minor spelling errors are allowed). Exact match is the most effective match type, and the keywords you set are exactly the product keywords that customers want.

Negative keywords: Negative keywords are like a blacklist. If you don't want a certain word to be associated with your product or brand, resulting in invalid clicks and wasted ad spend, you can add that word as a negative keyword. When a customer enters that specific search term, it will prevent your ad from showing in the search results. You can manage negative keywords in your ad group.

5. Best Practice: Run Automatic and Manually Targeted Campaigns Simultaneously

If you really want to maximize the value of SP advertising, then running both automatic and manual advertising at the same time is your best option.

Running low-budget auto-targeting campaigns is a great way to collect valid data without much effort or money.

You can use automatic campaigns to find effective keywords and customer search terms that you wouldn’t find on your own, and then use this data to adjust your manual campaigns to optimize conversion rates and ACoS.

6. Ad bidding

Bids may seem like a simple number, but they can have a big impact. Amazon will recommend a bid based on the number of competitors and their bids for your keywords. You can find this at the ad group level.

Example: You set "Apple Slicer with Safety Shield" as an exact match keyword and bid $1.00. In the category you sell, your competitors also bid on the same keyword, but the highest among them is $0.75. In this case, all other conditions being equal, you will win the auction. You only need to pay $0.01 more than the second place, that is, $0.76, to win the TOP ad position.

That is, all other things being equal, your bid only needs to be higher than your competitors to have a chance.

But in SP advertising, having the highest bid does not necessarily mean you will win.

Amazon also wants to sell products as quickly as possible, so under the same bidding conditions, Amazon is more inclined to give the top advertising position to sellers with the highest customer satisfaction and the lowest product return rate. Amazon matches the advertising copy with keywords in order to display the most suitable products to the consumers who need them most.

Amazon determines the quality and relevance of your ads. So there are a few things you need to know:

• Amazon will remove ads that are not eligible for the Buy Box;

• The remaining ads will be analyzed for relevance, so the product category is crucial, if the product is not listed in the right category, the ad and the product will not be relevant. Then the bid and possible click-through rate are considered for ranking. Ad ranking = bid x click-through rate.

When you enable Bid+ in a manual goal campaign, the system automatically increases your ad group or keyword bids by 50%.

Since sellers using Bid+ bid higher, Amazon will display their ads on the search results page.

Note that your CPC will increase with Bid+, but your daily budget will not increase unless you change it manually.

Finally, remember that Amazon is customer-centric, so product prices and reviews are also important in ad placements.

Low-priced products with more five-star ratings can get higher-ranking ad positions with lower bids.

In other words, the one who bids the highest amount for an ad may not necessarily get a higher ad position.

5. How can sellers stand out in Amazon advertising?

The answer is to pay close attention to your ads.

Here’s how to do it:

• Find other potential keywords. If all sellers bid on the same keyword, the bid will be driven higher and higher, and only Amazon will make a profit in the end, which is very disadvantageous for sellers. Therefore, it is recommended that you look for keywords that may not be in the top 10, but have sufficient exposure and good conversion rates. You can find related keywords and their rankings by reverse ASIN search in the user search term report;

• Don't be stingy if you want to make money . If a keyword is really profitable, it's worth paying a few cents more for it. Don't miss out on opportunities because of a penny. If you really want to win in a fierce bidding war, use bid+. Also remember that while the ACoS metric should be kept as low as possible, the lowest ACoS is not always the best.

• Don’t rely solely on SP ads. If you are a 3P registered brand seller or VC seller, you can use title search ads, which have less competition than SP ads. SBA is great for both sales and branding because it can lead consumers directly to your Amazon store or product page.

• Use a mix of automatic and manual campaigns to see what works. Just like with inventory, diversification may pay off. Then test to find which campaigns work best for you.

• Try Amazon off-site advertising. Although Amazon-supported on-site advertising is necessary, there are too many competitors, and if you want to stand out and do better than others, relying solely on on-site advertising may not be enough.

Finally, it is also important to stay curious and "hungry" . Keep looking for and discovering opportunities, even if they are slim. This will help you stand out from your competitors, and then the gap between you and your competitors will soon be widened, and you will eventually get a higher ranking and more sales.

When it comes to Amazon advertising, you need to keep testing and optimizing. I believe that you will find your own rules in the end.

Text ✎ Isla/