It’s goodbye product suggestions and hello sponsored ads for Amazon’s new sales strategy. Merchants, take note.
Over the past year, Amazon has been replacing organic recommended products on product pages with sponsored ads from brands. Instead of buyers seeing suggestions based on what other customers have bought or clicked on (i.e. “Customers who bought this item also bought” and “customers who viewed this item also viewed” items) when they visit the site, they’ll begin seeing an increase in paid advertising.
Amazon’s changing advertising landscape
Amazon introduced ASIN and category targeting at the start of 2019, according to Marketplace Pulse, which expanded sponsored product targeting options and extended the space where sponsored products can be found beyond product searches on the site to product pages.
Sponsored product ads appear in contained rows listed as “sponsored products related to this item” or “4 stars and above” beneath the details on individual product pages. They look identical to the organic recommendations customers saw there in the past. They’re also targeted by the category or specific product they’re listed under.
The move to more sponsored posts comes at a time when Amazon is dominating the ad spend space. In 2019, Amazon’s ad spending increased by 33% to hit over $10 billion. They became one of the biggest digital ad spenders in the world, and even more advertisers are extending their ad targeting on the site.
The Amazon we’re seeing in 2020 (particularly when it comes to product recommendations) is a platform out to scoop up as many advertising dollars as possible rather than give customers the best product suggestions on their site.
So what impact will this have on sellers?
Today’s Amazon customers aren’t simply using the site to purchase products. They’re also using it to learn about products, compare prices, and check out the reviews, which is what makes sponsored recommendations an interesting space for sellers to play in.
Sponsored recommendations still have a low click-through rate when compared to Amazon’s other placement types like search recommendations, but because of where they’re located beneath product details and the amount of space they take up, their click-through rate is growing. Sponsored recommendations are becoming an increasingly normal and visible part of the customer experience on Amazon, and they’re particularly effective during busy sales holidays when customers are browsing for ideas and often searching for related products. That makes the sponsored recommendations space one way for brands to increase their discoverability.
How to leverage sponsored ads and recommendations
Sellers will need to focus on creating more sophisticated and optimized paid marketing campaigns in order to leverage the sponsored recommendations space and potentially convert more shoppers.
One way to do that is by increasing the placement modifier to spend more of your budget on detail page placements. Another way will be refining the categories you include in sponsored ad campaigns. Category-specific targeting pairs your products with complimentary products and helps your ads appear in those sponsored recommendations sections. You can narrow your product category targeting down to specific brands, price ranges, star ratings, and similar products to reach a specific audience with interest in the product you’re selling.
The sponsored recommendations space signifies Amazon’s shift to prioritizing brands willing to pay for advertising, and brands using advertising wisely on the site are finding widespread exposure and big returns in sales. In order to compete in 2020 and beyond, you’ll want to focus on making your advertising campaigns sharp or just investing more time into ads altogether.
Want to learn more about running a successful ad campaign on Amazon and how you can use ads to convert more shoppers? Talk to one of our Amazon advertising experts at Pattern today through the form below.