Guide to Amazon Ad Types: Amazon Advertising for Beginners in 2024
In the dynamic world of e-commerce, Amazon stands as a vast, bustling bazaar where the competition never sleeps. For sellers, whether they’re launching a product for the first time or steering an established brand, the key to success lies in crafting a comprehensive advertising strategy. As the stakes rise, so does the need for a deep understanding of Amazon’s marketing arsenal.
Amazon’s advertising platform has transformed over the years, evolving into a versatile arsenal known simply as Amazon advertising. With specialized tools for sellers of all sizes, it offers a variety of Amazon advertising formats to cater to different business needs. Among these are Amazon PPC ads (Pay-Per-Click) and Demand-Side Platform (DSP) ads, each offering unique ways to amplify product visibility.
Despite the challenge of rising PPC costs, these ads remain a vital component of a seller’s toolkit, as the right ad strategy can capture consumer interest and propel your products to the top of search results, transforming the Amazon marketplace into a gold mine. With a wide choice of Amazon ad formats we have available these days, sellers now have the flexibility to customize their campaigns however they see fit.
This post will focus on breaking down Amazon Ad formats and showing how each of them works to elevate your visibility and performance on the platform.
What is Amazon PPC?
As the name suggests, Amazon PPC, or Pay-Per-Click advertising, is quite straightforward: you pay Amazon each time someone clicks on your product ad, regardless of whether they make a purchase. The cost you incur depends on the type of ad, the keywords you select, and the competitiveness of your market niche.
It can be further subdivided into 3 categories:
Amazon Sponsored Products ads, being the oldest and most widely used format, remains the most popular among both first-party (1P) and third-party (3P) sellers. However, there’s been a noticeable shift in ad spend towards Sponsored Brands and Sponsored Display ads as sellers explore more diverse advertising strategies.
One of the significant advantages of Amazon PPC is the access to key performance metrics that can help you evaluate the success of your campaigns:
1. Clicks: Shows how many times users have clicked on your ads. Amazon typically adjusts for any invalid clicks, such as accidental ones, within a few days.
2. Impressions: Tracks the number of times your ad is displayed to customers browsing Amazon.
3. Spend: Represents the total amount spent on each campaign, reflecting the collective cost of all clicks on your product ads.
4. Sales: Indicates the total sales volume generated from your ads, usually calculated within a week after users have clicked on them.
5. Advertising Cost of Sales (ACoS): Measures how efficiently your advertising translates into sales. It’s calculated by dividing your total ad spend by the revenue generated from those ads.
6. Return On Ad Spend (ROAS): As the opposite of ACoS, ROAS is calculated by dividing the revenue generated by your ads by the amount you spent on them. A higher ROAS indicates better returns on your investment.
Why Should You Use Amazon PPC Ads?
Using Amazon Ads can be a game-changer for sellers, particularly when launching new products. While some might hesitate due to the additional costs, overlooking this tool could be a missed opportunity.
When executed correctly, campaigns can deliver a substantial return on investment (ROI) and greatly increase sales. Here’s why you should consider incorporating Amazon Ads into your strategy:
🟩 Enhance Product Visibility: New products can take a while to appear in organic search results. By using Amazon Ads, you can instantly boost visibility, making it easier for potential customers to find your products right from the start.
🟩 Boost Sales: More visibility leads to more sales. Although ads may slightly reduce your profit margins, they open up new revenue streams by capturing sales that might not have occurred otherwise, ultimately increasing your overall income.
🟩 Improve Organic Search Rankings: On Amazon, sales volume plays a critical role in determining search rankings. By driving sales through ads, you’ll help elevate your product’s position in organic search results, leading to even more visibility over time.
Amazon Sponsored Products
What are Sponsored Products Ads?
What Makes Sponsored Products the Best Choice?
Sponsored Products ads blend seamlessly with organic listings, appearing at the top of search results, alongside other organic listings, or even on competitors’ product detail pages. This integration often means consumers view these ads just like they would organic listings, making them one of the most favored ad types on Amazon.
How Do Sponsored Products Work?
- Automatic Targeting
Automatic Targeting relies on Amazon’s algorithms to determine which search terms are most relevant for your products. By using the information from your product listings, Amazon automatically matches your ads with potential customers’ search queries.
This option is great for those who are new to advertising or looking to broaden their reach without spending too much time on keyword research. But little effort comes at a cost of limited control over which keywords are targeted.
Pros:
- ✅ Easier to set up
- ✅ Useful for discovering new keywords
- ✅ Broader exposure
Cons:
- ⛔ Less control over target keywords
- ⛔ Less relevant traffic
- ⛔ May not align with your specific product goals
- Manual Targeting
Manual Targeting allows you to take full control by choosing specific keywords you want your ads to appear for. This option is ideal for sellers who have a clear understanding of which keywords drive the best results for their products.
While this method often comes with a higher cost per click (CPC), it typically leads to more precise targeting, which can translate into higher conversion rates and more sales.
With Sponsored Product Ads, you can manually target keywords using three methods: broad, phrase, and exact. Broad keywords deliver maximum visibility by including variations around your main keyword, Phrase keywords rely on word order, and Exact keywords are the strictest, requiring an exact match with no other words.
When setting up manual targeting campaigns in Amazon PPC ads, you have the option to choose between two subtypes:
Keyword Targeting involves selecting specific keywords you want your ads to appear for. This approach allows you to directly target search queries that potential customers might use.
Product Targeting enables you to target specific competitor listings instead of keywords. By targeting your competitor’s ASINs, you make your ad appear on their listings under the “Products related to this item” section.
Pros:
- ✅ Greater control over keyword selection
- ✅ Better targeting accuracy
- ✅ Higher conversion rates
Cons:
- ⛔ Requires more time for keyword research
- ⛔ Higher initial costs
- ⛔ Requires constant monitoring
Sponsored Products Eligibility Criteria
1. While being brand-registered isn’t necessary, having a professional Amazon seller account or being a Vendor is essential. Individual seller accounts do not qualify for advertising.
2. Your product must be Buy Box eligible.
How much does Amazon Sponsored Product Ad cost?
The cost primarily depends on your daily budget and the bids you place on specific keywords. Each time a customer clicks on your ad, you incur a charge, known as cost-per-click (CPC): this cost can range from $0.05 to $10 per click, influenced by how competitive your niche is.
To optimize your ad spend, it’s crucial to experiment with different budgets and bids. Starting with a modest budget of $5 to $10 per day can be a good approach. However, for more noticeable results, many successful campaigns require a daily budget of $50 to $100.
*** IMPORTANT NOTE
When you target specific keywords in your Amazon ad campaign, the cost per click can vary. If you set your bid at $2.00, it doesn’t necessarily mean each click will consume this amount. In Amazon PPC, a second-price auction rule applies: the highest bidder pays just $0.01 more than the second-highest bidder. So, if the second highest bid was $1.50 while yours was $2.00, you will only pay $1.51.
Remember, your ad will pause when your daily budget is reached, and it won’t run again until the next day.
Amazon Sponsored Brands
What are Sponsored Brands Ads?
Types of Amazon Sponsored Brands
Amazon Sponsored Brands ads are available in three different formats: Single Product, Multiple Products, and Storefronts. Choosing the right format depends on what you want to achieve with your campaign and the products or services you are promoting.
✔ Product Collection
The Product Collection ad format lets you focus on up to three items from your brand, directing potential buyers to a landing page of your choosing. This means you can guide traffic straight to your personalized Amazon storefront or to a dedicated page that highlights only the items in your advertisement.
This option is ideal for increasing visibility for brand products that may not perform strongly in organic or sponsored searches. A good tactic here would be to include a top-performing product in your selection to increase the likelihood of viewers engaging with the less popular ones.
✔ Store Spotlight
For sellers who have registered their brand and set up an Amazon storefront, the Store Spotlight ad type offers a unique opportunity. It allows you to drive traffic to your brand’s custom-made website on Amazon, free from any advertisements of your competitors.
This format is particularly beneficial for brands offering a wide range of products across various categories or subcategories, as it allows you to promote three product categories and their store pages in a single ad, instead of focusing on separate items.
✔ Video
Video ads are one of the most, if not the most popular formats of Sponsored Brands. These ads typically appear somewhere on the search page between the other products. They can also be found on the product listing itself right above the customer reviews section, featuring several video ads from different brands that promote similar products.
Amazon suggests keeping your video ads between 15 and 30 seconds long, ensuring that every second counts. It’s crucial to pack in essential product information right from the start, making sure potential customers get all the details they need quickly.
If you want to make a video ad, make sure to review Amazon’s guidelines concerning the creation of videos.
Sponsored Brands Eligibility Criteria
1. You must be a registered brand owner through Amazon’s Brand Registry.
2. Professional Seller or Vendor.
3. Active account in good standing with Amazon.
4. Have the ability to ship products to the country where you are advertising.
5. Valid payment method.
6. Your product listings must fall within one or more of the eligible categories listed in Amazon’s Product Requirements table.
Amazon Sponsored Display
What are Sponsored Display Ads?
The key distinction between Sponsored Display ads and the other Amazon ad types, such as Sponsored Products and Sponsored Brands, is their unique targeting approach. Instead of focusing on keywords, Sponsored Display ads reach customers based on their interests, shopping habits, and interactions with your product’s detail page.
Sponsored Display ads on Amazon help your products get noticed by showing your ads in different places on the website. They can appear in shopping search results, on product pages of similar items, or can also pop up on other websites and apps outside of Amazon (in the U.S. only), like Twitch.
Essentially, Amazon tracks the items that a potential customer has viewed and then strategically showcases those products across various platforms — including Amazon pages, competitor listings, and even third-party websites and apps.
Sponsored Display Targeting Options
Sponsored Display offers four distinct types of targeting:
1. Product Targeting
This option allows you to reach customers who are browsing your product or similar products in your niche. It allows you to place your ads directly on your competitors’ listings, capturing the attention of shoppers who might be considering similar options.
Additionally, you can target visitors who are looking at complementary products. For example, if you sell phone cases, you could target customers viewing listings for smartphones. This places your product in front of buyers who might consider purchasing additional accessories to protect the phone after they’ve purchased it.
Overall, the two strategies for Sponsored Display product targeting include:
✔ Product
Allows to promote your product to customers currently exploring similar ones on Amazon. This method is best when it comes to boosting visibility and encouraging cross-selling.
✔ Category
Showcase your product to shoppers browsing categories that align with your advertised product. This approach can attract a broader audience, including those viewing products in your own or similar categories.
⋙ ELIGIBILITY
Product Targeting ads are available to Vendors and third-party sellers who are part of the Amazon Brand Registry.
2. Audiences
With audience targeting, you can connect with shoppers who have checked out your product detail pages, explored pages of similar items, or browsed related categories on Amazon.
This strategy focuses on customers who are familiar with your products or have browsed similar items in your category, making them more likely to make a purchase than reaching out to completely new audiences through Sponsored Products.
This type of targeting can be further subdivided into 3 main categories:
✔ Amazon Audiences
Amazon Audiences offers segments based on customer purchasing habits or their content consumption patterns. These segments include:
• In-Market: These are shoppers whose previous buying habits suggest they are likely to purchase items within certain product categories.
• Lifestyle: Includes customers who display specific behavior patterns or content preferences, such as frequently shopping for home products.
• Interests: Targets groups of shoppers who share common interests, as identified by Amazon through their browsing and purchasing activity.
• Life Events: This segment consists of individuals who have made purchases related to significant life changes, such as moving to a new house.
✔ Views Remarketing
Views Remarketing targets those customers who have visited specific product detail pages within a chosen time frame. This strategy not only reinforces brand presence but also encourages potential buyers, including those who left items in their cart, to complete their purchases.
You can focus on shoppers who viewed your product pages over the past 7, 14, 30, 60, or 90 days, as well as those exploring similar items.
✔ Purchase Remarketing
Purchases Remarketing, on the other hand, focuses on customers’ previous buying behaviors to inspire repeat purchases and attract new buyers.
You can select a lookback period ranging from 7 to 365 days, targeting customers who have purchased your products or similar ones within that time frame.
⋙ ELIGIBILITY
Audience Targeting ads are available to Vendors and third-party sellers who are part of the Amazon Brand Registry.
Sponsored Display Eligibility Criteria
To begin using Sponsored Display Ads on Amazon, you need to be a professional seller enrolled in the Amazon Brand Registry, and your products must belong to categories that are eligible for advertising. These ads are accessible in multiple marketplaces, offering a wide reach across various regions:
America | United States, Canada, Mexico, Brazil |
Europe | United Kingdom, Germany, Spain, France, Netherlands, Italy, Sweden, Poland, Turkey |
Asia Pacific | Australia, Japan, India, and Singapore |
Middle East | Saudi Arabia and the United Arab Emirates |
Amazon DSP Program
What is Amazon DSP?
Amazon uses the abbreviation “DSP” for two services — Demand Side Platform and Delivery Service Partner Program. This post focuses on the Demand Side Platform (DSP).
Amazon DSP is a programmatic ad-buying platform that lets advertisers purchase video, audio, and display ads at scale. These ads can appear on Amazon’s sites, apps, and even third-party platforms. Advertisers can upload creative assets, define targeting criteria to reach specific audience segments, and set a budget for their campaigns to maximize reach and efficiency.
By looking at user signals like interests, behaviors, demographics, etc., it makes sure your ads reach the right people at the perfect time and place. Amazon DSP also takes care of ad placement automatically, so you don’t have to worry about negotiating prices or locations. This way, your ads are placed strategically to create a bigger impact, instead of being randomly shown across the internet.
What are Amazon DSP Ad Types?
Amazon DSP currently provides four key ad formats: audio, display, video, and Streaming TV (STV) ads.
✔ Audio Ads
Amazon Audio Ads offer an innovative way for brands to connect with audiences through compelling sound experiences. These ads are part of Amazon’s advertising suite and reach users via platforms like Amazon Music, Alexa-enabled devices, and Audible, delivering engaging audio content.
A standout feature of Amazon Audio Ads is their ability to be interactive. Unlike traditional audio ads that passively deliver messages, these ads allow listeners to actively respond in real-time using voice commands. This interaction is powered by Amazon’s smart technology integrated with Alexa and other devices, making it easier for users to act instantly on the ad content.
For example, after listening to an ad about a bestseller on Amazon, a user could simply say, “Alexa, add this book to my cart,” or “Alexa, tell me more about this product”.
✔ Display Ads
➀ Responsive eCommerce Creative (REC)
Responsive eCommerce creatives showcase specific products available on Amazon, directing users straight to their product detail pages. Each REC can showcase ads for up to 20 ASINs and appear across all five Amazon DSP inventory sources. Advertisers can also set optimization goals for individual creatives, helping the platform prioritize high-performing ASINs for better outcomes.
➁ Custom Image Creative
Custom image ads are built with unique branding in mind. These ads use specific layouts, text, and visuals tailored to a brand’s unique identity. Users can click on these ads to visit product detail pages, brand stores, or customized landing pages. This format is ideal for advertisers wanting to highlight brand storytelling through personalized visuals and messaging.
✔ Online Video (OLV) Ads
Online Video (OLV) ads are flexible and can appear both in-stream — before, during, or after video content — and in non-video contexts, such as between text and images on a webpage. These ads are featured on Amazon properties like IMDb and Twitch, as well as on prominent third-party publisher platforms.
✔ Streaming TV (STV) Ads
Streaming TV ads are full-screen, non-skippable videos that play before, during, or after video programs like shows, movies, or live events. These ads are featured on platforms including Prime Video, Amazon Freevee, Twitch, live sports channels, Fire TV Channels, and top-tier third-party broadcasters.
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Amazon DSP Program
Learn More about the different types of Amazon DSP ads with examples
Amazon Storefront
Amazon stores can also be called a form of advertising, not to mention that their presence is sometimes imperative for running certain types of PPC ads.
In a way, having a branded store on Amazon has become more of a necessity rather than a possibility for every seller looking to succeed on the platform.
An Amazon Store is like having your own personal ecommerce website right on Amazon. You can design multiple pages, add subcategories, and include videos and other interactive elements to showcase your products far better than a typical search result page. Plus, you can direct customers straight to your Storefront (via Sponsored Brands and Sponsored Display Ads), ensuring they aren’t distracted by competitor ads.
Previously exclusive to Vendors, Amazon Stores are now free to set up, making it easier than ever to create a customized shopping experience for your customers.
Criteria for Creating an Amazon Storefront
Not every seller can immediately set up an Amazon Storefront, as there are specific criteria to meet:
1. A professional seller account is required. This account type opens up access to advanced selling tools, which are must-have for sellers who want to run a business seriously.
2. You must be a part of Amazon’s Brand Registry. This registry ensures that your brand identity is protected and that you are recognized as a verified seller on the platform.
Key Benefits of an Amazon Storefront
- Centralized Brand Hub
Your Storefront serves as a centralized hub for customers to explore your brand and its offerings. Instead of searching for individual products, shoppers can view your complete product line in one place.
- Competitor-Free Environment
One major advantage is the absence of competitor advertisements. Unlike other Amazon pages where competitor ads may appear, your Storefront focuses solely on your brand.
- Innovative Branding
Amazon Stores offer creative freedom, allowing you to design and add images, infographics, and videos as you see fit.
- Traffic Directing Capabilities
Using Sponsored Brands or Sponsored Display Ads can drive traffic directly to your Storefront, or you can opt for other forms of showcasing your store, like featuring it on social media and other platforms.
- Insightful Analytics
The Storefront’s insights dashboard offers valuable data on traffic sources, sales, and page views, enabling you to make informed decisions to optimize your marketing strategies.
- Enhanced Conversion Rates
By offering a unique and focused brand experience, you increase the likelihood of purchases as customers engage exclusively with your content.
Final Thoughts
We hope you found this summary of advertising tools and strategies helpful.
With more than half of shoppers choosing Amazon as their preferred platform to look for products, it’s no wonder that the cost of advertising is increasing every year. If you don’t know which ad type is best suited for your product and how to bid properly, it’s easy to overspend and see minimal returns.
If you need personalized recommendations or don’t feel ready to launch a campaign on your own, Contact us. Having successfully launched dozens of campaigns, we understand what it takes to drive results and will make sure every dollar spent on ads works in your favor!
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Frequently asked questions
How Much Do Amazon Ads Cost?
Sponsored Products, Sponsored Brands, and Sponsored Display ads operate on a cost-per-click basis, so you only pay when customers click on your ad, allowing you to manage your campaign budget effectively. What concerns Amazon Store, you can create one for free.
How Much do Sponsored Product Ads cost?
Amazon sets a minimum daily budget of $1 for Sponsored Product Ads. This amount represents the average daily spend your business can allocate to your ad campaign. However, in most cases, companies tend to invest more than $1 per day to promote their products effectively.
Which PPC Ad is the Most Effective?
Sponsored Products are generally considered the top choice for PPC advertising because they typically offer the greatest advantages for a brand. However, this also makes it the most competitive one in terms of bid costs, so a well-thought-out budget strategy is required.
Which Keywords Should I Target When Running a PPC Campaign?
You won’t know immediately which keywords to use as it’s usually a continuos process where experimenting is the key, though here’s what we can recommend to simplify the task:
1. Use Amazon Keyword Tools;
2. Analyze competitor’s product listings, pay attention to their bullet points and titles;
3. Use Amazon’s Automatic Targeting to identify high-performing keywords;
Who can use Sponsored Product Ads?
Sponsored Product Ads are exclusively available to:
1. Professional Sellers
2. Retail Vendors
3. Kindle Direct Publishing (KDP) Authors
To access Sponsored Product Ads, you must have an active Amazon account and ensure your products can be shipped to all U.S. addresses, whether you’re a seller, author, or vendor.
How to Create a Sponsored Product Ads Campaign?
Sign in to your Amazon Advertising account.
1. Select “Choose a Campaign Type” and pick “Sponsored Products.”
2. Choose the products you want to promote, either by searching or selecting from a list.
3. Enter your campaign name, set your daily budget, and define the campaign duration.
4. Set your bids using Amazon’s suggested keywords or your own list of keywords.
5. Click “Launch Campaign.”
Once your campaign is live, it typically appears on the platform within an hour.
How to Create a Sponsored Brands Ads Campaign?
Sign in to your Amazon Advertising account.
1. Select “Choose a Campaign Type” and then click on “Sponsored Brands.”
2. Decide on your Sponsored Brands landing page — either your Amazon Store or eligible products.
3. Enter your campaign name, set you preferred bid and budget.
4. Choose the campaign duration and pacing settings.
5. Add your keywords along with their respective bids.
6. Decide on the headline for your Sponsored Brands ad.
7. Upload an ad image, ensuring it’s at least 100 x 100 pixels in size.
8. Submit your Sponsored Brands campaign for review.
Amazon typically approves Sponsored Brands ads within 24 hours, although the process can sometimes take up to 72 hours.
How to Create a Product Display Ads campaign?
Sign in to your Amazon Advertising account.
1. Go to “Choose a Campaign Type” and select “Product Display.”
2. Pick between “Product targeting” or “Interest-based targeting.”
3. Choose the product you want to promote.
4. Select the products or interests you wish to target.
5. Enter your campaign name, set your budget, and define your bid amount.
6. Schedule your campaign by setting a start date and pacing.
7. Create an engaging ad headline.
8. Upload your brand logo.
9. Submit your campaign for review.
Product Display Ads are usually approved by Amazon within 24 to 72 hours, similar to Sponsored Brands.
