Amazon Advertising 101: A Guide to Sponsored Ads, DSP & Maximising Sales
Amazon advertising campaigns are a powerful way for brands to gain a competitive advantage, increase market share, and boost sales. In this article, we will provide an overview of two key Amazon advertising options: Sponsored Ads and the Demand Side Platform (DSP). Discover how these approaches can help brands reach new customers and captivate shoppers precisely when they are ready to make a purchase.
An Overview Sponsored Ads
Simply put, Sponsored Ads is Amazon’s solution that allows registered Amazon sellers using seller central and vendor central accounts to bid for and buy ad placements across Amazon's shopping results pages (SERPs), product detail pages, and even outside of Amazon's website. Sponsored Ads offers three different campaign options, each with unique creative formats, placement locations, and targeting options.
1. Sponsored Product
Arguably the most commonly appearing ad placement seen across Amazon with 77% of sellers using this campaign type, Sponsored Products ads appear in search results and product listing pages. These advertisements closely resemble organic listings and are a powerful way for brands to reach the top of Amazon's shopping result pages and drive sales.
Sponsored Products used keywords that you want your brand to bid on and appear against. There are two core keyword strategies brands can use, manual targeting and automatic targeting. We will cover these differences and best practices in a later post. But for now, brands bid against other brands to appear against specific keywords using the Cost Per Click (CPC) bidding model.
2. Sponsored Brand
Sponsored Products ads are the most commonly seen ad placements on Amazon, with 77% of sellers utilising this campaign type. These ads appear in search results and product listing pages, closely resembling organic listings.
With Sponsored Brands ads, you can select to serve your advertisement at the top of Amazon’s shopping results page choosing the product collection ad format. This gives shoppers the chance to see up to three promoted products, giving shoppers the chance to more easily explore a brands broader product offering. The product collection ad format can also include your brand logo and a custom tagline enable for more ‘on brand’ look and feel to the ad compared to Sponsored Product ads.
Sponsored Brands also offer Video placements, served further down the shopping results page with either a 15-30 second long video showcasing a single product and offering brands the chance to show the product in more detail and in action. This is a great way for brands to ‘up-cycle’ any existing video assets used across other advertising channels such as YouTube, Instagram and even TikTok. It’s worth checking Amazon’s video specification guidelines in advance of launching Sponsored Brand Video to ensure any videos used meet the necessary requirements to run.
As with Sponsored Products, brands control which keywords to bid on and appear against using a CPC bidding model.
3. Sponsored Display
Sponsored Display ads, a newer arrival to Amazon’s Sponsored Ads offering, offers brands the chance to engage with customers in a number of ways that are different to both Sponsored Products and Sponsored Brands ads.
Placement Variety
Sponsored Display ads have access to additional placements that aren’t available to Sponsored Products or Sponsored Brands and enables brands to reach audiences in areas such as:
Amazon’s homepage
Product detail pages
Twitch
Off Amazon 3rd party websites and apps
Sponsored Display example on product detail page placements
Bidding Model
Sponsored Display ads can be purchased using the traditional CPC bidding model (as with Sponsored Products and Sponsored Brand ads) or using a cost per thousand viewable ad impressions (vCPM). vCPM and more general CPM bidding is a mainstay of display and video advertising used across DSPs and puts greater emphasis on brands controlling the bidding and optimisation ad campaigns towards reaching higher volume of high value customers (unique ad impressions).
Targeting
Unlike Sponsored Products or Sponsored Brand ads keyword targeting approach, Sponsored Display instead offers the use of audience targeting and contextual shopping signals to engage and deliver relevant products and advertising messaging to shoppers. This gives the control to specify bids based on a perceived value a selected audience is worth to your brand. Again, this is another similarity that Sponsored Ads has with DSP advertising that we will cover shortly.
Measurement
Another key differentiator is in how Sponsored Display ads considers and tracks when a sale is attributed to an ad impressions being served. Sponsored Display ads count conversions and revenue that is attributed to both viewable impressions and clicks because of the vCPM bidding model being based on viewable impressions. What does this mean? Essentially, when reporting on Sponsored Display ads, you will see what Amazon considers to be conversions and revenue based on an individual user having viewed your Sponsored Display ad - even if they don’t ever end of clicking on it. As such, this approach to measuring conversion volume and attributed revenue that counts both clicks and views can often over-inflate results when compared to Sponsored Product and Sponsored Brands click based attribution model.
Given the complexities, nuances and the ever changing industry landscape revolving around measurement, we will dedicate a specific article related to Amazon ads + Retail Media measurement and attribution.
An Overview on Amazon's Demand Side Platform (DSP)
In addition to the Sponsored Ads type of advertising covered above, there is also Amazon's Demand Side Platform (DSP) which is a programmatic buying platform that automates the buying of digital ad to target and reach shoppers across 1000’s of websites, apps and across multiple devices. One key importance here is that Amazon's DSP can also be used for brands that do not sell products or services on Amazon, expanding Amazon's advertising capabilities to an even wider category of brands and businesses.
With Amazon's DSP, brands have greater control over a number of key areas when it comes to their advertising campaigns when compared to Sponsored Ads; such as having access to a wider variety of off Amazon publishers and websites, specifying whether traffic is sent to an Amazon product detail page or to an external website, greater flexibility in combining multiple shopper segments to build custom audience lists and access a larger variety of advertising formats.
A well placed DSP bought ad within highly relevant contextual content
Given these more advanced features and control over targeting, DSP is a powerful tool that can supercharge the efficiency and impact of a brands invested marketing budgets in achieving bottomline business results and is used to drive a variety of different marketing objectives, from building brand visibility amongst new to brand shoppers at the beginning of their user journey right through to remarketing known recent transacting customers to build brand loyalty and repeat purchases.
Amazon's DSP is particularly effective in reaching and discovering new customers to brands, given the access to Amazon’s bespoke shopper and transactional data and ability to engage customers on specific websites outside Amazon and can be the deciding factor in a brands advertising investment being able to achieve incremental sales and revenue to the business.
We recommend that for Brands to maximise advertising impact on generating new sales and long lasting awareness, it is important to invest in multiple ad types to better influence shoppers throughout multiple stages of their purchase journey. Stay tuned for our upcoming blog post, where we will delve deeper into this topic.
