Understanding Amazon advertising

Before we begin creating an advertising strategy for Amazon, it’s essential to understand the fundamentals of the Amazon advertising platform.

Amazon isn’t just a marketplace; it’s a search engine. An incredible 50% of product searches are performed on Amazon—that’s almost double that of Google. For many buyers, Amazon is the first—and only—place they’ll go to buy a product.

Amazon ads differ in several ways from other PPC platforms(like Google Ads). We can split Amazon advertising into three types:

1. Sponsored Products – are the most common ads, accounting for around 80% of ad spend. These adverts promote specific products and are keyword-targeted, meaning they must be optimized for search queries. Sponsored products appear alongside organic results and are clearly marked as ‘Sponsored’.
2. Sponsored Brands – As the name suggests, this is exclusively for brand owners who want to promote a brand or a product range. You get greater control, including the ability to create custom headlines, logos, and products.
3. Sponsored Display – Sponsored Display ads feature on Amazon and across the internet (through retargeting) to reach customers based on their interests and browsing behaviors.

Amazon Ads is constantly iterating and improving. Recent updates have included integrating AI to promote sponsored brands and incorporating ads within Amazon Prime. Like other online advertisers, Amazon is increasing its usage of video ads and has created templates to make ad generation easier.

The Amazon advertising platform provides detailed campaign metrics in real-time that enable markets to monitor, review, and refresh campaigns. Inside the Amazon dashboard, you’ll find essential data points, including ACoS (Advertising Cost of Sale), CPC (Cost Per Click), and impressions—as well as details on total spend and customer orders.

How to build a basic Amazon marketing strategy

Here we’re going to walk you through the fundamentals of creating an Amazon marketing strategy. The basic building blocks of your Amazon ad strategy should include:

• Identifying keywords
• Selecting the right channels and setting your budget
• Targeting options
• Crafting compelling ad content

Identify keywords

Like other search engines, Amazon uses keywords to identify the most relevant products. Before creating your Amazon ads strategy, you’ll need to identify relevant keywords that your customers are using.

While Google makes this process simple (through its Keyword Planner tool), you’ll need to use a third-party tool to help your targeting.

Channable offers advertisers a simple solution. Our Amazon Ads connection enables you to quickly identify and incorporate keywords (including negative keywords) into your campaigns. Alongside brand keywords (like Apple, for example), you can include phrases (best water bottle for camping), exact matches, and broad keywords (terms that Amazon considers close to the keyword or keyphrase).

Like SEO, you should aim to identify keywords, including long-tail search terms – that will drive customers to your products.

Select channels and budget

Most sellers focus on Sponsored Products, targeting customers with individual products relevant to search queries and Sponsored Brands that promote a range of products. In each case, you’ll need to bid for a position, competing with a potentially global range of advertisers.

Amazon ad budgets can range from hundreds of dollars to hundreds of thousands – and will depend on your market, size, and goals.

When you begin Amazon advertising, you may want to experiment with a handful of products until you learn the system. This will help you to learn about what works and what doesn’t without wasting your precious advertising budget.

Targeting options

Once you’ve identified your keywords, channels, and budget you’ll need to decide how you want to connect with customers.

Amazon offers advertisers the choice between manual and automatic targeting options for product ads.

• Manual targeting: Here, you’re going to need to do the work! You can target specific products, categories, brands or other relevant product features and keywords. You can dig into the details (price, Prime delivery, etc.) to engage your audience.
• Automatic targeting: Amazon will use its algorithm to display your ads to potential customers using four criteria (Close match, Loose match, Substitutes, Complements). For example, your advert for a sleeping bag could appear to someone interested in purchasing a tent.

Each option has positives and negatives. Manual targeting gives you ultimate control but demands significant knowledge and insights into your customers and their behavior. Automatic targeting is a simpler solution, but Amazon isn’t infallible, and it may make mistakes in where and when it displays your products, which could inhibit sales and exhaust budgets.

Crafting compelling ad content

Advertising can increase engagement, but high-quality content drives conversions. Amazon’s product description editor enables (almost) anyone to create compelling ads that ensure your products and brand stand out.

In September 2023, Amazon announced it would introduce artificial intelligence to help sellers create product descriptions, following the lead of eBay and Shopify. This could take much of the hard work of creating descriptions but could result in generic content that includes errors.

The best Amazon product listings are clear and simple. They include keywords in the title and throughout the content, which improves conversion and organic ranking position. In addition to detailed product descriptions, customers value the validation that comes through genuine customer reviews, videos, and original imagery.

Advanced Amazon advertising techniques

If you’ve followed the guide this far you have the fundamentals of an Amazon advertising and marketing strategy. However, several advanced advertising techniques, including dynamic bidding, DSP, and A/B testing, can increase your likelihood of making a sale.

Dynamic Bidding Strategies (DBS)

Amazon’s DBS gives the company control of your budget and bids to increase the likelihood of a sale. Instead of setting a fixed budget per click (and running the risk of losing out on a sale to a higher-paying competitor), DBS enables them to be flexible. This strategy uses Amazon’s power and insights but doesn’t guarantee a sale, so advertisers should exercise caution.

Amazon DSP

The Amazon Demand Side Platform (DSP) allows advertisers to reach customers outside the Amazon platform. You can use static ads displayed across third-party platforms or through streaming TV and video platforms provided by Amazon. These tools are primarily useful for companies who are seeking to brand building.

Amazon A/B testing

As the name suggests, Amazon’s A/B test function enables advertisers to explore which page is better at generating conversions. Using the platform, marketers can test two iterations of a product description or page to learn which works best. This

Measuring and analyzing Amazon ad performance

Amazon provides advertisers with massive amounts of detailed data on campaign cost, performance, and conversion rates. You can gain critical insights from Amazon advertising Reports that can be configured to provide the data you need and filter out information you don’t.

Some of the key Amazon advertising campaign metrics to monitor are:

• Click-Through Rate (CTR)
• Conversion Rate
• Cost-per-click
• Return on ad spend
• ACoS

Advertisers should ensure they set aside time for regular reviews where you’ll assess performance, audit ads, and identify areas for improvement and optimization. Amazon's reporting tools should provide you with insights that can inform strategy adjustments.

Optimizing campaign elements

Amazon listings—like websites and webpages—should be optimized to deliver the best user experience. The data and insights you receive should be used to continually improve product titles, descriptions, and advertising copy.

Alongside performance data, you should update content to reflect changes in the market and the priorities of your buyer personas. Tools like Amazon’s A/B testing solution enable you to iterate and improve campaign elements.

Managing Amazon advertising changes

In addition to regularly adjusting campaigns to improve performance, you’ll want to ensure that your advertising strategy reflects industry best practices and uses all the features of the Amazon platform.

You can find the latest updates to Amazon Ads on its news feed. One of the most exciting trends for advertisers is the increasing use of video. Customers are 64% more likely to buy a product after seeing a video, studies have found – with Millenials and Gen Z preferring video to written content – something Amazon is taking advantage of by introducing more videos to its platform.

To use video as part of their ad campaigns, advertisers must be part of Amazon’s brand registry, where you can access its video maker tool. As mentioned, Amazon is experimenting with AI to enable faster generation and iteration of product ads.

Staying current with the latest improvements is critical to improving ad performance.