What is Amazon Advertising? How to Advertise on Amazon: A Complete Guide

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Amazon launched “Amazon Advertising” in 2018. So, it’s still a relatively fresh tool for marketers eager to promote their products online.

However, it does provide a massive level of potential. Amazon claims that 76% of its shoppers always start with the search engine.

So, if you can get your product to the top of the SERPs you could see a big boost in profits as well.

As well as this, according to CNBC 90% of shoppers aren’t using Amazon to buy. Instead, they’re checking prices and searching for new products.

You need to make sure that when they complete these exploratory searches, they discover your products first.


The Big Basics About Amazon Advertising

Amazon Ads is just like Google search. When a user searches for a product on Amazon, they are provided with a list.

At the top of this list, there are marked sponsored results.

These are advertisements that have been made by companies who want to market their products on Amazon.

To gain an ad like this, you can bid on keywords related to your products. Successful bigs will lead to higher visibility in the search engine results pages (SERPs).

Amazon Advertising is PPC or pays per click. You will be charged each time a user clicks on your ad.


As well as appearing in the SERPs ads can appear in other places like:


  • Product pages
  • The home pages
  • The bottom or side of the screen

There are a variety of different ads available on Amazon that could be beneficial to your business.


In this guide, we’ll explore what these are and whether they could benefit you.

Getting Started with Amazon Advertising

Before you even begin your campaign, it’s important to make sure you know your goals.

This is going to help you set up your campaign the right way to achieve what you need. There are a wide variety of goals that could be appropriate or useful.

For instance, you can consider:


  • Generating news sales
  • Gaining more authentic reviews 
  • Gaining more conversions
  • Boosting your brand visibility

Used correctly, Amazon Advertising can help you accomplish these key goals and much more.

When you set a goal, you give your campaign a direction. This is a key way to know whether your campaign is working.


You also need to consider the KPIs that are relevant and we’re going to explore all the best options here.

It’s worth making your goal specific. For instance, rather than deciding that you simply want to boost your conversions, decide on a set amount that you want to reach.

Think about the time frame too. But be realistic. Within 30 days, you will be able to determine whether your campaign is successful or not.


Set A Budget

You do need to make sure that you have a budget set. Remember, Amazon Advertising works on CPC. So, you need to think about the max amount you want to spend.

The good news is that the cost for Amazon is a lot lower than Google’s. One of the reasons for this is that Amazon is purely for e-commerce whereas Google is far more diverse.

A budget does not determine the amount you will spend but the amount you could. An efficient campaign will allow you to stay under budget while ensuring that you reach your goal.


Your first option when user Amazon Advertising is choosing your account. You have three choices here. You can select:


  • Your seller accounts
  • Your vendor accounts
  • Select that you don’t have a seller or vendor account

If you don’t yet have an account, it’s worth exploring the different options. They come with unique price points so it’s important to find one that fits your budget and your requirements.

There are countless benefits and factors for each. For instance, pro merchant sellers can ensure that Amazon manages everything from shipping to customer searches and returns.

Ultimately, it provides a more hands-off approach. As soon as you select the right option for you, you’ll be able to move forward with your ad campaign.


Different Ads Available Through Amazon

Amazon Alexa Advertising

Once you have chosen your account or signed in, it’s time to explore the different ad options.

There are several that could be the right fit for your needs. These are:


  • Amazon Sponsored Product Ads 
  • Amazon Product Display Ads
  • Headline Search Ads 
  • Amazon Native Ads
  • Amazon Video Ads

You need to explore each option separately to determine the right choice for you.


Amazon Sponsored Product Ads

These are for individual products that are advertised on the product detail pages as well as within the search results. The keyword-targeted ads are pay-per-click.

If you have used the Google Shopping network, these ads work in a similar way. When a user clicks on your ad, they will be directed to that product page. With this ad, you can set a daily budget as well as a budget for the full duration of the campaign.

You can pause the campaign at any point you want. However, you need to keep it running for one day in total at a minimum.


Amazon product display ads

Pay per click, these appear on the product pages, customer review pages as well as below and on top of the search results.

These ads can also be placed in follow-up emails, abandoned cart emails and many more. The aim here is to up-sell or cross-sell to customers.


There are two different types of campaigns to consider here:


  • Product targeting – Contextual, you can target related categories as well as specific products.


  • Interest targeting – a behavioral form of targeting you can directly target the interest of shoppers to ensure that you reach a larger audience. So, you can target based on similar products that you’re selling or the interest of the audience. For instance, your audience could be interested in entertainment tech. 

It’s worth noting that a campaign is limited to a target type.

With product display ads, you can choose which in-category detail pages are right for your advertising campaign. You will also be able to access the advertising cost of sales as well as a range of other metrics and KPIs.

We’ll discuss this a little further down.


Headline Search Ads

These display as headline banner ads. As such, they are always above the results. Cost per click will lead buyers to a page on Amazon.

You can promote 3 or more products at the same time. The minimum bid for this CPC option is $0.10. The minimum campaign budget is $100. You can schedule the campaign as much as four months in advance.

Also known as sponsored brand campaign ads, you can customize the ad image, landing page, and headlines. Amazon also allows you to test the performance of different combinations and choices. So, this is another great way to manage and check the success of your campaign.


With this option, you want to make sure that you are selecting three top-performing products for the ad. This is going to help you increase the sales and clicks that you generate.

Make sure that you also include the top benefit for the product in the headline. Remember, mobile shoppers – which make up a massive section of your audience – only see the main headline and image.

It’s also important to ensure that you don’t market the product as “number one” or a “bestselling item.” Do this and your ad will be rejected.

For testing, explore one variable at a time. You should carefully alter the landing page to get the best results.


Amazon Native Ads

Here, you can place ads on your own website. You can choose from:


  • Custom ads
  • Search ads
  • Recommendation ads 

Search ads will populate your site based on keywords that customers search for.

Custom ads allow you to choose exactly which ads you want to display.

Recommendation ads are placed within article pages on your website. Dynamic ads, Amazon populates them with the product information that is relevant based on the content of the site as well as the views.

The most important fact about native ads is to make sure that they are highly relevant.

Do this and you can make sure that clicking the ad is going to be the obvious next step for the reader.


Video Ads

A winning approach to video advertising.

Video ads can be useful because you can create an emotional connection. This can help push customers to decide and buy a product.

As well as appearing on Amazon, they can be featured on the echo as well as a variety of other platforms.

Video ads will allow you to build awareness and improve your reach at the same time. This is far more powerful than the typical tv ad campaign. Video ads can also be connected to display ads. This will help ensure that you can showcase your brand message and demo any services or products.


Selecting the keywords 

One of the first steps when setting up an Amazon advertising campaign is choosing your keywords.

There’s something important to note here. Amazon keeps its search volume numbers under lock and key.

You can opt to invest in premium search term reports. These are available through Amazon Retail Analytics (ARA) and will provide you access to the indexed list of searches, not the volume.

As such, selecting your keywords is going to be a hands-on task. You can explore the Amazon or Google suggested searches as well as related searches.

There are also a variety of third-party tools. Some are free and the others provide premium solutions.


There are three main different types of keywords that you can bid on through Amazon advertising. Your options are:


  • Broad Keywords – The most flexible option – your ad will show up for target keywords even when words are added before and after the phrase targeted. 


  • Phrase Keywords – These are based on how the sequence of words alters the context for a query. The words are chosen, and their layout can indicate what type of products you sell. 


  • Exact keywords – The least flexible option – your ad will only show up if the user searches with the exact keyword. As such you could target “Nike trainers” and your ad wouldn’t show up for a search like “air Nike trainers.”

The keywords choices provide both advantages and disadvantages for your campaign.

For instance, broad keywords will ensure your ad shows a great number of times to a wider audience. However, there is more chance that the ad will not be relevant to the user. As such, it could be an inefficient campaign.


Exact keywords are a highly efficient option. Although, you could miss out on potential sales from users searching for exact products that you could be selling.

Certain ad types provide other keyword options too. For instance, you could be using headline search ads which are also known as sponsored brand campaigns. Here you can choose:


  • Brands product keywords – This is a combination of a product you sell and a brand. 


  • Complimentary product keywords – These are two individual products that may be sold together. For instance, an example of this would be mustard and ketchup.

Out-of-category keywords can also be used. As you might have guessed, these won’t match your chosen category. However, they will indirectly lead users to a product that you are selling.

There is another option worth considering. Automatic keyword targeting will target the most relevant keywords based on your product ad. This works based on an algorithm.

You should think about long-tail keywords too. Long-tail keywords are less competitive and therefore you can ensure that the ad is showing up for searches that are relevant.




When you have selected your ad campaign and considered keywords, it’s time to bid.

You need to start by looking at how much to bid. There are a few different factors here including:


  • Target advertising cost of sale
  • Conversion rates
  • Product value

Amazon provides all this information in their reports. The e-commerce giant also provides recommendations on how much they think you should bid.

This is based on the typical average winning bid for a product. However, with the metrics above, you should be able to calculate your ideal bid.

The formula for this is conversion rate x target ACOS x product value.

There are also bidding strategies. You can explore fixed and dynamic bidding options.

If you select fixed bids, you need to manually set the bid price for an advert. Do this and Amazon will only use that CPC when bidding for a keyword.


Dynamic bidding is based on machine learning. You can use this to optimize your bid technique.

You can either bid down or bid up as well as down. With a down only campaign, Amazon lowers the bid in real-time during the point when it is less likely for an ad to convert.

With a bid up to and down campaign, the bids increase when a conversion is more likely to occur.


How to Measure Performance

The best way to measure and improve your performance is with the Amazon Ad Attribution tool. Introduced in 2018, this tool provides you with more power over your marketing campaign.

With the tool, you can set your Amazon key performance indicators and then determine whether you are reaching your goal.

This could lead to a boost in both ROI and engagement.


How does it work?

It’s a lot like Facebook Pixel. With this tool, you can track the traffic to your Amazon ad, regardless of whether it’s from Amazon or not.

Of course, to gain the full potential of this tool, you need to understand your KPIs in Amazon marketing.

There are a few metrics that are relevant regardless of what type of campaign you are running:


  • Spend: The total amount that you have spent on your advertising


  • Clicks: Number of times people have clicked on your ad


  • Impressions: How many times the ad has been shown to customers


  • CPC: This is the average cost per click. It’s the average that a click costs which is calculated by dividing the total spend by the total clicks.


  • ROAS: This is the total sales revenue divided by the total ad spend. The higher your ROAS is, the more efficient your campaign.


  • Click through rate: This is the ratio for how often your ad is clicked compared to the number of impressions.


Here are some of the other KPIs that could improve your sales.

Advertising Cost of Sales – This is your ad spend divided by sales. There’s no set rule on what you Arcos should be.

This will be dependent on your product, category and the ad budget of the seller.

If the product is in a competitive category and its high margin, a 50% Arcos or even higher could be acceptable.

Alternatively, low competition and low product marking could mean that an Arcos of 15% is necessary.


You need to consider keywords too. High conversion keywords that are high value cost more and lead to a high Arcos.

It’s worth noting that several ad clicks will not cause sales. Since the ad spends is only based on sales generated the Arcos is not completely accurate.

You also need to bear in mind the issue of repeat page views.

You need to explore your total advertising against total sales because Arcos will not provide the full picture.

Your Amazon ad can also become more efficient. As your products climb in rank, you will need to spend less to gain the same results.

So, for a seasoned ad account, sales drive ads could be only 20% of the total. You should make sure you are optimizing your pages too as this will help your organic ranking.


Conversion Rate 

We stay on top of your conversion rate

You need to track two different conversion rates. There are:


  • Search term conversions
  • Product page conversions 

Make sure that you are constantly refining keywords and search terms. For instance, you should consider changing search terms that have no conversions after approximately 30 days and 20 clicks to negative keywords.

If you have less than 20 clicks in 30 days, you can also consider increasing the bid for search terms. This will give you more clicks.

To gain success with Amazon advertising, you must have a clear understanding of the driving keywords for clicks and conversions. As well as helping you to create successful ads, you can implement these into your product pages.

On Amazon, the product page conversion rate is referred to as the “Unit Session Percentage.”


Gaining Access to Your KPIs 

Amazon ads provide a variety of different reports which will allow you to access KPs. Using these reports, you can learn key information including which keyword and ad product mix work best as well as how customers are searching for your products.


Targeting Report 

This provides sales and performance metrics for ASINs, categories, and keywords.

You can use this to see how your targets are performing in the long term. Use the report to know when to adjust the bid and expand the keyword list. You can also identify low and high performing targets.

You can use this for both sponsored brands and sponsored products.


Placements Report

The report provides information on campaign placement performance.

Find out the placements that are going to help users find your products. You can then decide which campaigns you need to make bid adjustments on.

Again, the report is available for both sponsored brands and sponsored products.


Search Terms Report 

As the name suggests, this report provides the search terms customers are using before they click on your ad.

You can access data for brand promoted and brand halo ASINs that are connected to the sponsored ad term.

It’s a great way to find keywords that lead to conversions and to identify negative keywords.

The report is only available for sponsored product ad types.


Performance Over Time Report 

A full collection of your KPI metrics including clicks, average CPC and spend will be accessible. Use this report to keep track of the status of different campaigns. Determine whether it is running, terminated or ended.

You can only use this with sponsored products.

Advertised Product Report and Purchased Product Report

This provides performance and sales metrics for the advertised ASIN. You can find out how your ads are performing over time and determine whether you need to improve your advertising strategy.

For instance, you might have low performing products. If that’s the case, it’s possible that you don’t have enough keywords.


You might also not be bidding enough for popular keywords in a category.

The purchase product report gives you metrics on products that have been purchased from the seller after the ad was clicked on.

As well as being able to access metrics through the reports, you can also use the API or the advertising console.

As you can see, Amazon ads provide you with a wealth of data. It’s difficult to know which options are going to be useful and relevant to you.

Ideally, you should keep a check on all these options when planning your future strategy or making optimizations.

You will be able to identify issues as quickly as possible and make the right changes for your campaign. This can help ensure that you avoid losing vast potential profits.


Awesome Tips for Optimizing Your Ad Campaigns

There is a range of different options to consider that will ensure that you are getting the most out of your ad campaign.

You should make sure that you are running a campaign that is well structured. It’s important to ensure that your campaign and ad groups are laid out correctly.

Ideally, you need a separate campaign for every main product category.

As well as this, you should have campaign ad groups that are going to be more specific.

You need to make relevant ads for different keyword groups too. This will ensure that the ads run is relevant. You’ll save money and increase the ROI at the same time.


When exploring bids, you should make sure that you bid on brands that are selling similar products to yours.

So, you should bid on key competitors. For instance, you could be selling water bottles. If that’s the case, make sure that you explore the water bottles that are popular and then run bids for these brands.

You’ll gain exposure which is great if your brand isn’t well known. It’s easy to find your competitors. You just need to make sure that you explore which brands come up with generic search terms.

As we mentioned, there are a variety of different ad formats. You need to make sure that you are exploring all the options. By doing this, you can discover which provides the greatest benefits for your campaign.

Look at which are providing the greatest returns. You can do this by exploring the reports we have discussed that Amazon provides.

You will then be able to determine how to allocate your budget based on the results that you have gained.

Don’t forget about promotions. Promotions are an awesome option for gaining more attention. With Amazon, you are provided ways to use promotions to boost your campaign. People love deals and are more inclined to buy if you advertise deals with your products.

You also need to make sure that you are exploring search terms that are not relevant to your product. You can do this with the Amazon reports that you will gain through the ad platform.

Reports are located at Seller Central. Choose Advertising Reports and you’ll find all the options including “Search Term Report.”


What About Your Ad Copy?


Amazon allows you to completely customize your ad. It’s important to make sure that you are taking the right steps here to get the greatest benefits.

The ad text must match the product being sold. However, there is room to be creative. You can inject urgency or humor and try to play on FOMO. It’s important to ensure that your ad stands out because there’s a lot of competition.

Playing on deals and savings is one of the best ways to do this.

Your ad copy should also be highly specific. If you are selling a product, make sure that it includes key info. For instance, TV ads should have the size in inches and whether it’s 3D, 4K or OLED. The relevant info will differ depending on the product sold.

A good way to approach this is to think about the key questions a typical buyer would have before they commit to a purchase. This can also help your conversions instead of simply improving clicks.


Photography Is Crucial

Seeing is believing.

Remember the key aim is to make sure that users click. You need to do whatever you can to make this happen.

This means visuals matter more than most sellers realize. The way your product looks will often be enough to make a user think twice.

So, it’s worth investing in the best images that you can get and that match your marketing budget.

Don’t forget, the average attention span of a customer viewing an ad is estimated at between 6 and 8 seconds. You don’t have much time to impress them with the products that you are offering.

It’s possible they’ll only view the image before deciding whether they’re going to click or move on.


Should You Use Amazon Ads?

Are you selling products on Amazon or just selling online in general? If so, then the answer is an emphatic yes.

Amazon ads will provide a way to further your reach and perhaps beat some difficult or well-funded competitors.

Amazon advertising also provides a range of options that other platforms like Google don’t provide.

While you won’t be able to access all the metrics you want, Amazon does provide a wealth of reports and KPIs to consider when optimizing your campaign. As such, it’s easy to make the right changes and improve your results.

Getting started is easy too. You just need to choose from the list of different options. Our recommendation? Experiment with all the ads before settling on the right choice for your campaign.

In doing so you can give yourself the best chance for high clicks, high conversions and high profits with this marketing option.



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