AMAZON SPONSORED ADS:
ARE THEY REALLY NECESSARY?


As the first destination for product searches, Amazon is simply too big to be ignored by small and large retailers alike. Savvy marketers will need to learn how to use its advertising features to stand out amidst a crowd of almost 6 million sellers.

According to data, more than half of Amazon consumers stick to the first result page, with just 30% of the remaining users proceeding to explore other pages. Therefore, promoting products through Amazon Sponsored Ads (i.e. ASA) is a key skill for retailers to be able to gain visibility over competition (Bizon).

How do Amazon Sponsored Ads work?

Amazon Sponsored Ads work in a similar way as Google Ads, and employ a pay per click model (PPC). Sellers can set up a budget for the campaign and decide a specified time frame for it to run. What makes the difference between Amazon and Google is the retail dimension that revolves around these marketing activities. This means that, while the promotion is running, sellers must  manage the retail flow that it produces, with buy box, inventories and returns generated in real time by the campaign, thus adding more complexity to the mix.

How much should retailers spend for an effective ASA Campaign?

This completely depends on the products and the market in which a retailer is operating, as well as the objectives of the campaign. Therefore, keeping constant track of the results of each campaign is key to invest more effective in these activities. To this respect, one of the best tools in the hands of an Amazon seller is the Advertising Cost of Sales (i.e. ACOS). This index may help marketers by measuring the percentage of sales spent in advertising within the duration of a specified campaign and it can be calculated by multiplying the ratio of total costs of the adv campaign and the total sales generated by it by 100.

Amazon Sponsored Ads in Europe comprise 3 main formats:

Amazon Sponsored Products:

By far one of the most used and easier to spot, sponsored products ads appear both on page results and product sheets. These campaigns sponsor one product at a time and are based on keywords, that each seller may select during campaign set up, but it’s not the only criteria used by the platform: category and products are also used together keywords to determine who will see the advertised products.

The best approach to this ads format is to start with an automated targeting. This function can be set before the campaign is launched and allows Amazon to select the keyword that the platform finds more useful to sponsor a product. Once the campaign has been running for one or two weeks, sellers should change to a manual targeting campaign, selecting keywords manually based on the sales performance of the previous campaign.

Amazon Sponsored Brands:

Amazon Sponsored Brands appear at the top of the search result page, always before sponsored products and their main advantage compared to the first format is the possibility to sponsor more than one product and your brand at the same time. In this case, sellers will be able to create customized ads by choosing logo, products and a punch line for the campaign. Sellers may also choose the destination linked to the activity, such as a landing page, a store or a personalized link, but won’t be able to add a “buy now” call to action (CTA) to this format.

Due to the nature of Sponsored Brands, only sellers that have registered their brand within Amazon brand register will be able to use this format. Moreover, the platform will take up to 78 hours to review these marketing activities before promotions start to ensure compliance.

Amazon Sponsored Display:

Amazon Sponsored Display are online ads combining text, picture and a CTA to a landing page, and are usually displayed at the top of a page. Through this format, sellers may also activate retargeting campaigns both within and outside Amazon. If a consumer sees a product on Amazon, retailers can keep showing that product to the same consumer on other platforms, such as Facebook, Twitch or Google.

What’s next?

Amazon is constantly adding new ads format, like video ads on streaming TV and audio ads. Many of these formats are restricted to specific countries, as well as being much more expensive than the above.

As a rule of thumb, each seller should keep in mind that there is no “one-suits-all” format. Retailers have to experiment with different type of campaigns and always keep track of data collected and performance indicators to keep optimizing the next campaign.

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