October 2, 2020

5 Things You Should Know About Sponsored Products on Amazon

By Katie Rex / Advertising, Amazon

Amazon makes up about 45% of the US ecommerce space. With over 12 million items, brands are more passionate than ever to get a piece of all the Amazon action.

Leveraging Amazon Advertising is almost as important as Amazon itself. Advertising increases organic rank, pulls potential customers into your lieu of influence, and ultimately provides vital data on your customer base, who your competitors are, and more. Download our Amazon Ads eBook to learn some of our best practices.

The best way to start advertising is simple: Sponsored Products. Sponsored Products are advertisements that promote your product against others via search pages on Amazon. They can show up scattered in normal search results, but the best ones are found in spots 1-4.

Here are 5 things you need to know about advertising with Sponsored Products.

1. Win more with keywords that convert

It’s important that every product you advertise has selected keywords. These keywords can be determined by you or Amazon. With manual campaigns, you are able to choose which keywords you’d like to focus on. You can use a variety of tools to do this including Google, Amazon search results, detail pages, and even customer reviews.

Another option is to use automatic campaigns—these are campaigns that Amazon runs for you. They generate keyword lists and give you a better understanding of what people are searching for—make sure to negative your own branded keywords so you are getting awareness keywords in the reports.

2. Be in the right aisle

When advertising on Amazon, it’s important to see where you are in comparison to the other competitors you have on Amazon. If your product has less than a hundred reviews it most likely won’t do as well as a similar product that has 14,000 reviews.

This can be important when determining who to conquest. Another factor to consider is price point. Is your product significantly higher than others? Is it lower? All these questions can help you craft a better advertising strategy for your products.

3. There’s more to ads than ACoS

KPI’s should change and evolve in a full funnel strategy. Remember to look at the whole picture when doing so. Growth is usually everyone’s top priority when it comes to Amazon and the best way to do that is to use more brand awareness strategies.

Awareness strategies often cost more, and they see a lower sales return. This is not all bad. Looking from the 5,000-foot view this might be hard to understand, but if we look from a 30,000-foot view, we can look at impressions, detail page views, clicks and conversion rate. All these data points tell a story—and the story should be growth.

Advertising also helps with organic page rank. Check on organic listings every once in a while and track that growth. Pull a placement report on occasion to see how often you are winning top slots. These are things that help toss ACoS out the window but reaffirm long term growth.

4. Keep track of branded/non-branded spend

Use branded and non-branded keywords to help you understand who is searching for products like yours and who is searching for products branded by you. In any campaign, it’s crucial for each campaign to have a goal for ad spend.

These can easily be determined and best organized by brand defense or brand awareness—also known as branded and non-branded. Both of these types of campaigns should be treated differently. Most times, branded costs less to convert, and has a higher RoAS than awareness.

Awareness spends more, has a lower return, but generally grows your brand through new to brand sales and organic placement. Keeping these two separate is vitally important to understanding the data you can pull from Amazon and in crafting strategy for this quarter and the next.

5. Utilize the reports Amazon supplies

There are many reports in Amazon that you can pull to understand how your advertising is doing. You can select the ad type. For example, a report being pulled for sponsored products, sponsored brands, and sponsored brands video. You can select the time periods, but if you go too far back, Amazon can’t pull it. So make sure you pull these reports regularly so there isn’t a gap in the data.

You can also pull search term, targeting, advertised product, campaign, placement, purchased product, and performance over time reports. Make sure to keep tabs on all the different tests and campaigns you have implemented by using the data found here.

Overall, Amazon Advertising is a great way to grow a brand on Amazon. Using keywords that fit your products is crucial to the success of campaigns. Understanding your products and where they fit in the scheme of things is a challenge, but is a great growth lever in the long run.

Remembering that ACoS is not the end-all, be-all metric is freeing and allows for creativity in growing a brand on Amazon. Keeping track of campaign types through brand defense and brand awareness is pivotal in success. Lastly, utilizing Amazon reports can make or break successful growth on Amazon through sponsored products. Using these tips and tricks can help you plan and grasp true growth.

Interested in wielding Pattern’s expert advertising team to accelerate your brand growth on Amazon and other marketplaces? Schedule a demo with a Pattern representative today.

More Resources
The Experts' Guide to Amazon Advertising Strategy
The Great Debate: Is Revenue More Important Than Profit?