What is Amazon Advertising?
Amazon is an important marketing channel for SME retailers in the UK. Since creation 25 years ago, Amazon has become the top eCommerce platform in Europe and the USA. Each month 197 million people shop on Amazon worldwide. And more impressive still, Amazon accounts for 5% of all retail spend in the USA.
Why is Amazon Advertising Important for SME Retailers?
55% of American’s begin their online shopping journey on Amazon, 52% of households have an Amazon Prime account, and 90% of people said they have used Amazon to price check products before purchasing.
It’s pretty clear that Amazon is the place we head when we are purchasing online. It’s easy to compare products, usually we can find what we are looking to buy, and shipping and checkout is hassle free – it’s no wonder Amazon’s growth is showing no signs of slowing.
If you are a small ecommerce business, it’s important to know how and where you can advertise on Amazon.
How Does Amazon Advertising Work?
Similar to Google Ads, advertisers buy sponsored placements across Amazon when a user searches for certain products. Advertisers buy on a Cost-Per-Click (CPC) model, and targeting, performance and budget is managed out of a Campaign Manager – in the same way as on Google Ads.
Cost-per-click is determined by the advertisers bid, but also their relevance to the user’s search term. It’s best practice to ensure that all information on the product detail page is as complete as possible to ensure relevance to search queries.
What Ad Placements are available on Amazon Advertising?
Amazon provides advertisers the opportunity to buy Sponsored Brand, Sponsored Product and display (DSP) ads across their network.
1. Amazon Sponsored Brand Ads
Sponsored Brand ads are becoming a prominent placement, with 47% growth YoY.
Formerly known as Headline Search Ads, Sponsored Brand Ads allow advertisers to serve ads at the top of the search results page when users are searching for products. The ads display 3 products, a brand logo and a short ad text. A user can click from the ad to a brand store page or the product detail page of those advertised.
Sponsored Brand ads work well for advertisers aiming to build awareness of their product and brand. They can also be important for advertisers aiming to protect their branded keyword against competitor conquesting activity – where competitors try to serve ads for your brand term.
Advertisers can see clicks, sales and revenue figures for their ads – and on top of this can see useful metrics such as New-To-Brand.
Amazon’s New-to-brand metrics provide information on the purchase, if it was made by an existing customer or someone buying a brand’s product on Amazon for the first time over the past year. The new-to-brand metrics Amazon provide include:
total new-to-brand purchases and sales
new-to-brand purchase rate
and cost per new-to-brand customer.
In order to serve Amazon Sponsored Brand ads, you need to be Amazon Brand Registry verified. This can be done quite easily, advertisers need to submit their trademark to Amazon Brand Registry, and it takes about 2 weeks to get verified.
2. Amazon Sponsored Product Ads
Sponsored Product ads allow advertisers to serve their products in the search results page when a user is in-market for a specific product. Like Sponsored Brand ads, advertisers can choose when to serve based on keyword targeting. Whilst Sponsored Brand Ads are great for building awareness, Sponsored Product Ads are more ‘bottom of the funnel’
Think of Sponsored Product Ads in a similar way to Google Shopping Ads. The ad placement consists of a product image, price and title – and drive users to the product detail page.
3. Amazon Demand Side Platform
Amazon DSP (Demand Side Platform) allows advertisers to serve image and video ads across the Amazon network - including Amazon owned and operated sites and IMDb. These ads can work well to build brand awareness due to the targeted nature of Amazon's audience data.
Amazon Sellers or Vendors?
There are two types of merchants on Amazon: Sellers and Vendors.
Amazon sellers sell directly to consumers. They market the product themselves, managing their ads in the Amazon Seller Central, and are subject to selling fees. Two shipping options are available to sellers: Merchant Fulfilled, where they ship products themselves or Fulfilled By Amazon, where Amazon ships the product.
Amazon Vendors gain the status by invite only. Vendors sell their products to Amazon, who then resell the products. As a result they avoid selling fees. Vendors manage their Amazon Advertising in the Amazon Vendor Central.
Amazon Advertising Retail Readiness Checklist
Amazon is a popular marketplace with consumers because the quality of products is high. In order to protect this advertiser’s products must meet the retail readiness checklist before they are allowed to advertise:
Clear and accurate imagery
Accurate and descriptive product titles
Over 3.5 rating