Pro-level Strategies for Amazon Sponsored Product Ads

By Tina Marie Bueno | May 18th, 2016

In my previous article about expediting new product success, we covered the basics of Amazon’s powerful marketing service tool: Sponsored Product (SP) ads. This strategic, dynamic pay-per-click program is available to both FBA and FBM Sellers winning the Buy Box. Sponsored Product ads is Amazon’s pay-per-click program which sends shoppers to a product detail page. Since SP ads are measurable and elements are controllable, the majority of successful Sellers I know incorporate them into their marketing mix. I reached out to a couple of experts on this subject to learn more about their recommended pro-level strategies. Of course, I found them to be extremely insightful.

What makes SP ads worthy of being incorporated into your marketing budget?

  1. Visibility Boosts. Vying for attention amongst 20+ pages filled with similar products is akin to competing for the finals on America’s Got Talent. Being discovered is priority #1. And just like the show, that doesn’t occur automatically just because of your awesome talents or in this case, products. Displaying on page 1 requires definitive SP ad planning.
  2. Sales Conversion Increases. Ad campaigns will most likely not result in an overnight sales boon. Significant conversion rates can easily take up to a month or so. Do you have the patience? Are you prepared to spend the bucks required?  

Answering those questions before launching SP ad campaigns provides benchmarks which come in handy when calculating ACoS (average cost of sales) and ROI.


A Few Reminders

SP ads lead to your Amazon product page when clicked. Versus Amazon Product ads which drive traffic to an e-commerce website off of Amazon. I know, they sound way to similar. I will stick to SP ads since my objective is aligned with yours:  Uplift visibility and Amazon product sales.

Not every Amazon merchant can use SP ads however. The requirements include:

  • An active Amazon professional seller account. (Ok that makes sense.)

  • Ability to ship to all U.S. addresses. (FBA or FBM.)

  • Products must be new, not used products.

  • Listings are in the Buy Box. (If your product is not in the Buy Box, even though you can set up a campaign, ads will not be displayed and will be flagged in Campaign Manager under the Advertising tab in Seller Central.)

By the way, that last requirement perplexed me. After a conversation or two with Seller Support, I now understand the logic behind why only Buy Box winners can place these ads. Here’s what I learned…the basic assumption is that you sell the exact same product as other merchants. So, let’s say a shopper clicks on your ad (which you are paying for), then lands on the product detail page which lists 5 other sellers as well. The odds greatly favor shoppers will purchase from the Buy Box holder. According to Feedviser, “82% of Amazon website sales today go through the Buy Box, and this number greatly increases with Amazon mobile sales.” If that’s not you; then you’ve just thrown money out the window.

On the other hand, if you happen to be the only merchant selling your product because of private labeling or unique bundling, have managed to win the Buy Box (I’ve already shared how that is not automatic), keep your account health ratings high, but need to drive more traffic to your product detail page; then SP ads are a great way to get more exposure and contribute to all of the factors calculated in the Buy Box algorithm.

These are current categories that allow for SP ads:

SP ads

Ads may be displayed on page one of search results and on product detail pages…

SP ads

And on the product detail page…

SP ads

“May” is an important word as it all depends upon if your keyword bids rank against other merchants’ bids.  


Quickly Covering the Basics

Remember, the goal of these keyword-based ads is to keep people who clicked them onto your product detail page. Give reasons to stay long enough to convince them to buy with:

  • Good content that clearly explains your product’s unique benefits. Look at how the top sellers write their copy. Don’t write it exactly the same way though. Instead, focus on how they explain their products from the title, to the bullet points, and in the full description. Then make sure your words spell out the differences of your product.

  • Great images that help shoppers envision how they could use your product. Again, look at how the top sellers photographed their products. Did they leave out some valuable product-in-use pictures? Maybe you have a whole other way for your product to be used that no one else has demonstrated.

  • Valuable reviews of buyers’ experiences with your product. Think about it. You have just spent money for your SP ad, a shopper has been redirected to your detail page, and there are too few product reviews. Buyers are weary when only a handful of people have shared their viewpoints. Even though Amazon has a no-questions asked return policy, often shoppers forego making online purchases when there isn’t enough feedback to influence them. As Amazon Sellers, we all know that Reviews absolutely matter. On that note, it’s not possible to win the Buy Box with no reviews. The point here is to have enough of them so that prospective buyers get the real scoop, albeit from strangers.

  • Start with Automatic Targeting.  Run the first campaign with Automatic Targeting as preliminary keywords research. It’s a great way to see what words Amazon generated, then determine which ones were stars versus budget sapping duds.


Leveling Up Like an Expert

Perhaps your initial test-the-waters SP campaign was to see which keywords were a hit or major flops relative to sales and ACoS. Now that you probably have a PPC campaign or two under your belt, it’s time to optimize for greater payoffs. I have included pro-level recommendations by the experts.

  1. Switch to the Manual Targeting when setting up the rest of your campaigns. Be sure to transfer the stellar performers from your Automatic Targeting campaign(s) to your Manual Targeting list. Essentially all SP ads is an evolving keyword screening process.  

    SP ads

  2. Source More Keywords on Amazon. There are a variety of resources to check, starting with the list that shows up with Amazon searches. For example, typing in “blankets”, the following list drops down:

SP ads

Are there multiple words that you hadn’t thought of which are also excellent for your product? Use valid words both in your product keyword search terms and your SP ads.

Next, select the most suitable option on that dropdown menu and scan all page 1 listings. Scout for relevant words not already on your list.

Lastly, go to the product detail pages of the top listings and glean more keywords.

  1. Search Like Online Shoppers. While the majority of buyers use Amazon for product searches, some also use Google searches.

    SP ads
    Looking at the first page of a “blankets” search, there are tons of descriptive words that could be added to your list.

  2. Bid More. As you already know, Amazon’s SP ads operate as an auction for ad space. Bid winners’ ads are shown more frequently; increasing your probability of discovery. The default bid (Keyword bid) is the maximum you are willing to pay every time your ad is clicked.

    SP ads
    The arrow in the above screenshot is Amazon’s minimum estimated Keyword bid recommended for an ad to appear on page 1. Amazon also states that “this bid is provided as guidance and doesn’t guarantee an impression on page 1.” Looking at this Seller’s example, it is nearly half the minimum bid amount Amazon suggests guaranteeing the ad won’t be seen based on that particular keyword.

    Instead, boldly raise your default to outbid the competition. Increasing your bid to over the suggested amount by .10 to .20 cents, will most likely provide you with more “air time” so to speak. This means being able to collect more keywords with big payoffs. You don’t have to keep this bid rate once it has proven itself to be valuable. Although keep it slightly above with Amazon is suggesting.

  3. Use Negative Keywords. This list actually prevents your ads from displaying when a shopper’s search terms matching your negative keywords. Negative keywords can be used with phrases and exact match types. This is ideal for words that were a bust in any previous campaigns but ended up costing you precious funds. 

    The experts at CPC Strategies,
    a PPC management and Amazon Sales Acceleration program company, explains that “Negative keywords allow sellers to refine and sculpt their target audience to improve the performance of their Sponsored Products campaigns.

    The goal for Negative Keywords is to make sure sellers are getting their products in front of search terms that are actually relevant to the products they are advertising, while at the same time avoiding allocated spend to keywords which are generating clicks without conversions.”


Finally, h
ow do the experts answer what a ACoS rate should be? According to Mike Indigaro, Ecommerce Consultant at Teikametrics, an all-in-one software platform that helps retailers win on Amazon,  “ACoS is a tricky discussion. Not every seller should necessarily strive for the same ACoS, since some sellers use Sponsored Products as a customer acquisition vehicle. In that case, we would not worry so much about a low ACoS, but optimize instead for driving as much traffic to their listings as possible. On the flip side, for those that have a business that’s been up and running for a few months to a few years, we would strive for a low ACoS that’s below the adjusted gross margins of their products after FBA fees. That way, we can make sure that they’re not negatively affecting their bottom line with additional marketing spend for these campaigns.”

Indubitable, the more shoppers discover your products begets more sales begets higher, organic rankings –all leading to a better Amazon SERP (search engine results page). Everyone wins.

 

Tina Marie Bueno
Tina Marie Bueno is a global citizen with an MBA in Int’l Business plus over 20 years of content marketing experience both in the U.S. and overseas.  As iLoveToReview’s Marketing Director, she strives to deliver relevant content to serve Amazon businesses of all sizes.