Whether you’re a customer or a seller on Amazon, you may have noticed that some products are displayed with a “Sponsored” tag while searching for a product. Have you wondered what does sponsored mean on Amazon and why do those products have this tag?
There are 1.9 million active sellers currently available in Amazon. That’s why the competition between sellers is pretty challenging and stiff, and that’s where Amazon Sponsored Products ads come in handy.
These ads promote listings and target customers through keywords. It allows the sellers to increase click rates, conversion rates, and eventually selling rates. Sponsored Products are trustworthy and more reliable than regular products.
Read along to learn more information about Amazon’s Sponsored Products Ads and why customers trust these products.
What Does Sponsored Mean On Amazon?
Amazon ads are generally Amazon Sponsored Products. It promotes click rates, conversion rates, sales rates, and visibility of your product listing in Amazon search results.
Technically sellers who have a good reputation for product quality and competitive price get the chance to promote their products through Amazon ads.
If you see any sponsored ads on Amazon, it means they have bought the ad space to present their products on the top of similar product pages.
Are Amazon Sponsored Products Good?
Amazon Sponsored Products are generally the best products on Amazon. That’s because sponsored ads aren’t offered to those sellers who have poor ratings, bad reviews, fulfillment problems, or who don’t deliver on time.
In addition, sellers must meet strict criteria for products to be eligible to sponsor ads. This way, Amazon ensures that customers get the best quality items that they’re looking for.
Usually, a customer chooses to buy Sponsored Products since Amazon recommends these due to the seller’s reliable delivery, good reputation, and product quality.
Plus, customers who have bought that product already left good reviews and ratings, which makes them more reliable to other customers. Amazon examines the overall performance of the seller’s business while choosing them for sponsored ads.
So that’s why as a customer, you can trust and rely on sponsored products by Amazon.
Types Of Amazon Sponsored Products
Amazon offers 3 types of Amazon Sponsored options to sellers. The types of Amazon Sponsored Products include:
- Sponsored Product Ads
- Sponsored Brand Ads
- Sponsored Display Ads
This Sponsored feature on Amazon lets the sellers create multi-page and on-brand storefronts in Amazon, which is definitely worth spending your valuable time on.
Here are the details of each type of Amazon Sponsored Products for precise knowledge:
1. Sponsored Product Ads
Generally, Sponsored Product Ads appear on the sides, at the top, or somewhere in the search results of Amazon. These types of ads enhance the visibility of sellers’ products and draw customers to sellers’ product pages.
However, if your products are qualified to win the Amazon Buy Box, you can take more advantage of the Sponsored Product Ads. To win the Buy Box, you must price your products fairly and should have an outstanding track record.
2. Sponsored Brand Ads
Sponsored Brand Ads help the brand reach out to more customers and introduce your business to them.
These ads feature your brand logo that directly connects with your Amazon storefront. Sometimes, Amazon even selects some products from your product listing to display as brand ads.
Branded sellers widely use sponsored Brand Ads to boost their brand awareness and establish long-term loyalty instead of one-time conversions.
3. Sponsored Display Ads
This category of Amazon Sponsored Ads is different from the above types. Sponsored Display Ads aren’t only limited to Amazon. It allows the seller to enhance their reach to customers through third-party websites and apps.
Unlike the Sponsored Product Ads and Sponsored Brand Ads, it doesn’t draw the customers through keywords; instead, these ads reach people through their behavior.
Through Amazon’s Sponsored Display Ads, you can target the following customers:
- Customers who have interests in the niche of your products.
- Customers who have purchased something from your business. For example, someone has purchased a pencil from you; now they may see your ads of erasers from your brand on some websites or apps.
- People who have visited your product listing or similar product pages.
NOTE: Sponsored Display Ads are only accessible to certain sellers since this feature is still on testing in Beta.
How Do Amazon Sponsored Products Work?
Till now, you have to know what sponsored means on Amazon and the types of Sponsored Ads. Now, let’s learn how Amazon Sponsored products work to reach more people.
Just like Google Adwords, Amazon’s Sponsored Products also work through keyword-based targeting. Amazon uses a different Amazon Sponsored Products strategy and requirements than Adwords to run Sponsored Ads.
However, Amazon itself finds the keywords automatically, or you can also provide your suitable keywords if you want.
You need to pay Amazon a per-click fee whenever a customer clicks on your product ad, but Amazon allows you to decide how much you would like to spend per click. That means you have control over the 10.9 billion dollars advertising budget.
However, it doesn’t mean that you can get the best outcome from the ads even if you bid low. The higher you bid, the higher place you get on the search result. Just like that, the lower you bid, your Sponsored Advertisement may not appear anywhere in the search result.
When customers click on your ads, Amazon directs them to your product listing where they can buy your products. But unlike the Display Ads, you can’t drive the traffic from Amazon to other websites.
However, Amazon will cut the amount once someone clicks on the ad, whether they buy any item from you or not.
What Products Can Be Sponsored On Amazon?
Any product you see on Amazon– starting from small tools to large tools, makeup, clothes, and even food– can be sponsored, but the seller has to be qualified to use this advertising feature.
If you purchase any product from Amazon or click on a product, you may see sponsored ads with similar products on Amazon. In case you want more product suggestions from sponsors, you can search for items on standalone gray boxes using ‘sponsored’.
What Are The Criteria For Amazon Sponsored Ads?
These ads are similar to the search result and appear on the search results page with the ‘Sponsored’ tag. There are some criteria that Amazon follows during choosing the products for sponsored ads to ensure the product is eligible for this option.
- Ensure a valid method for payment.
- Your Account has to be active and in excellent standing with Amazon.
- The seller type needs to be a professional, direct publishing author, and vendor.
- You should be available to ship to countries where you’re advertising.
- Whatever product you’re advertising should be in your stock and buy box.
- Your products shouldn’t be used or refurbished.
Which Sellers Can Use Sponsored Ads On Amazon?
You can’t use restricted products for Amazon Sponsored Ads; the product must be eligible to sponsor. In the same manner, sellers have to be eligible to use this advertising feature to promote their products.
More than 55% of retailers own small to medium-sized businesses on Amazon. That’s why Amazon offers a variety of sponsored advertising options so that all eligible sellers, regardless of their business size, can take advantage of this feature.
Retailers must meet the seller criteria to be eligible for using Sponsored ads to ensure that customers get the best service from Amazon through sellers.
If you’re a consumer and see the Sponsored Ads, you should know that the seller has met the following criteria, and you can trust the vendor.
- Fair pricing
- Maintains a good record of delivering products on time
- Has good reviews on product qualities and shipping from customers
- Sellers who have an outstanding selling track history with a high sales fulfilling volume and satisfied customers
- Retailers have an adequate level of advertised products available in stock
What Are The Types of Amazon Sponsored Products Ads Targeting Campaign?
You have two options for choosing a sponsored product targeting campaign: Automatic Campaign and Manual Campaign. Here are the details of these two ad campaign options:
1. Automatic Campaign
After giving your listing information, Amazon takes control over which product or keyword will be used for your campaign in the automatic campaign. Your campaign budget will be in your control.
Amazon knows what keyword will be relevant for your products but to stay safe; you should double-check whether amazon is selecting relevant keywords through keyword research.
Setting up the automatic campaign doesn’t take much time and effort. That’s why this feature is ideal for those sellers who are new to Sponsored Ads campaign. Take time and learn from this campaign, then move to the manual campaign.
As a seller, you can use three keyword matches in the automatic ad campaign option:
- Close Match: If any customer is looking for a product that’s nearly related to your advertised product, ads with a close match target will appear in front of them.
- Loose Match: When customers search for products that aren’t closely related to the keywords, these ads will appear to them.
- Substitutes: This keyword match is used for targeting customers who are looking for the same product from different brands.
2. Manual Campaign
With the manual ad campaign, you control what keyword and product you want to be used for Amazon Sponsored Ads. Amazon also gives a list of keyword suggestions in this campaign option.
So if you don’t have any keyword choices of your own, you can pick your targeted keywords from the suggested list of Amazon.
You may not find enough keywords from the given list by Amazon, so you will have to choose a few keywords on your own. If you approach this step like a customer, then it would be easier for you to select manual targets.
- Put yourself in the customer’s shoe and think about what words a customer may use when they look for a specific product that you’re interested in promoting through Sponsored ads.
In this way, you can create a list of keywords using this intuition. Now you need to research the keywords you have jotted down to get more ideas from them.
- Next, you should think about the price. Put yourself in the customer’s shoes again and think about what would be the competitive price for your product; take help from the search bar suggestion if needed.
- In order to stand out among the thousands of sponsored sellers, you also need to analyze the products sponsored by your competitors.
The best will be if you select more than 20 keywords at the initial stage. Sellers can use three types of keyword matches for the manual ad campaign: Broad match, Phrase match, and Exact match.
· Broad Match
Broad match keywords usually don’t match with the exact keyword your targeted customers search for.
For example, you set up an ad campaign for a full cricket set. Now your sponsored ad will appear to customers if they look for a cricket set with words that your broad keyword has in it.
Suppose your broad keyword is “A whole cricket set including bat, ball, stump, and more.” Now, if anyone searches for “whole cricket set” in the search bar, it’ll trigger your ad to appear.
However, using broad match keywords for ad campaigns is expensive since it targets a large range of keywords and reaches more customers.
· Phrase Match
The customer needs to search with the exact keyword you have inserted for your product in phrase match keywords. So in our “cricket set” example, if someone searches for a cricket set without any word in between, your sponsored ad may appear to them.
Even if they search for “cricket set for men” or “men’s cricket set,” your ad will appear since it’ll be considered as a phrase match search.
· Exact Match
In this keyword match, your Sponsored Ads will only appear when someone looks for the product that you’ve sponsored with the exact keyword; with no word in between similar to yours, your ads will appear to them.
For example, you have set your campaign keyword as “whole cricket set,” then customers need to search the exact word as “whole cricket set” to make your ad triggered to appear.
How To Set Up Amazon Sponsored Product Ads Campaign?
Here’s the step-by-step guide to set up Amazon Sponsored Product ads campaign:
● Step 1: Go To The Campaign Manager
First, go to the campaign manager from Amazon Seller Central Ensure that you’re not on the Headline Search Ads page but the Amazon Sponsored Product page.
● Step 2: Tap On The Create Campaign Button
After hitting the create campaign option, you must add an effective description and relevant image to make your product more enticing to the customer.
● Step 3: Set Name, Duration, And Budget Of Your Campaign
While setting the campaign name, you should include the product name that you want to sponsor with the Target ACoS. Then fill in the rest of the necessary options to create the campaign.
● Step 4: Choose Your Targeting Campaign
The last step of successfully completing the process of setting up the campaign is to select whether you want to run a manual or automatic targeting campaign. We have already discussed above how these two targeting campaigns work. And you’re done!
Tools To Manage Amazon Sponsored Products
With the Amazon Interface, you can indeed manage most of the options of the campaign. But there are more advanced tools that can make the task of managing a campaign more manageable and optimizable.
Here are some tools for managing Amazon campaign efficiently:
It’s a tool for bid automation to optimize Sponsored ads quickly. Prestozon offers you bid suggestions and automation that help you to invest in profitable keywords.
In this way, you can save money by reducing the possibility of non-profitable bids. With this tool, you can achieve the best ACoS for every keyword in less time.
Prestozon’s proprietary algorithm makes bid suggestions for you when you insert information related to your target ACoS for all campaigns. Besides, it also saves your campaign bid history so that you can learn from your previous and make more profitable bids in the future.
The Bid Wizard and Analytics of Prestozon will cost you around $30 to $95 per month. It also cuts 1% of your ad sales for automation services.
This tool ensures that optimizing your Amazon’s Sponsored Products Ads is easier and less monotonous. PPC Entourage allows you to discover new profit-making keywords depending on the existing keywords existing campaigns and removes poor keyword choices.
You can also hire professionals through this tool to completely manage your sponsored products. On top of that, you get recommendations for useful courses, coaching, and consulting.
Based on the number of SKUs, PPC Entourage costs you between $45 to $250 per month.
It’s an all-in-one tool for sellers. Sellics includes a PPC manager, product research, competitor monitoring, profit dashboard, ranking optimization, and so on.
This tool helps you to continue ranking on top of the PPC campaigns. It also tracks your ads performance through the performance metrics of revenue, CPC, cost, orders, ACoS, and more.
If you choose this tool, it may cost you between $77 to $500 per month.
This tool is another excellent creation of the leading Amazon seller tool company, Seller Labs. Ignite is a robust and powerful tool for optimizing and managing Amazon’s Sponsored Products ads.
It adds more innovative features that can help you choose more effective keywords, optimize ad cost, and analyze ads performance.
However, how much Ignite tool will cost per month depends on the number of managed campaigns. You may need to pay between $47 to $499 per month to use their services.
How Much Do Amazon Sponsored Products Cost?
Keywords for different ad groups come with a maximum bid amount. You can set a maximum bid for each keyword if you use a manual campaign. Otherwise, your bidding will automatically use the standard bid for the campaign.
The general bidding spend for non-competitive keywords starts from $0.20; medium competitive keywords start from $2, and high competitive keywords start from $6.
You can also determine the cost of Amazon’s Sponsored Ads through Average Cost of Sale (ACoS). It’ll be better if you calculate the ideal ACoS before creating your campaigns.
To calculate your Average Cost of Sale, subtract FBA and sellings fees, cost of goods, and any other costs from the product’s selling price.
Are Amazon Sponsored Ads Really Worth It?
In a word, yes! Amazon Sponsored Ads are really worth the money you spend on it, but you have to remember that Amazon Sponsored Ads aren’t about setting it and forgetting it.
You need to stay active and work on your campaign to make sure Ads are performing well and profitably. If you forget about your product’s advertisement after creating it, then you will likely end up getting more clicks without making any sales and spending more money.
That’s why it’s necessary to check your campaign frequently to ensure it’s going well, keywords are working well, and most importantly, that you’re making sales through ads.
Sellers who aren’t brand registered are ideal for using this feature of Amazon to promote the visibility of their products, build popularity among customers, and increase the selling rate.
- Where will my Amazon’s Sponsored Ads appear?
Exactly where your Ads will appear is hard to tell. Your Sponsored Ads may appear at the top of search results or alongside or in the middle of the search result based on how much you spend on campaigns. And how your targeted audience will see the ads depends on the keyword you use.
- What’s a good CPC rate for Amazon Sponsored Products?
When a customer or client clicks on your ads, you need to pay some amount to Amazon, which is known as CPC. A good CPC rate is between $0.30 to $6, but the best way to know the good CPC is to bid equal to your competitors.
However, if you bid too low, your Ads may not appear anywhere before customers.
- How to set goals for Amazon Sponsored Campaigns?
When a seller decides to run ads on Amazon, they know they may face loss because of product performance. Therefore it’s essential to set goals and track your product performance. That’s why you need to choose carefully what ads you should go for and what your goals are before creating an ad campaign.
- What should I expect from Sponsored Products?
If you want your Ad’s outcome to be good, you should know that you have to work hard and be patient. Your maximum bid, the previous record of selling and client satisfaction, and keyword choice play a vital role in what’ll be the result of your Sponsored Products. So make sure to maintain these factors for better results.
- How to automate the ASIN research?
Before running ads on Amazon, you should first ensure that keywords and ASIN will optimize your target continuously. You can use the Sellics tool that we mentioned above to make it easier for you to automate research.
From the above discussion, you got to know what does sponsored mean on Amazon, how these Sponsored Ads work, how to use these ads, and we went over tools that you can use to help with your ads.
Amazon Sponsored Ads are only offered to trustworthy sellers, and they appear mostly before the customers’ sight. This way, you can make more sales by paying Amazon a little for promoting your ads.
Remember, consistency is the key to becoming a successful and popular seller on Amazon. If you have any product quality or shipping-related issues, you can’t take advantage of Ads. So you need to build yourself up first to be acceptable for using Amazon’s Sponsored Products ads.