Amazon Sponsored Products: How to Place Your Products Before the Organic Search Results

Every refined sales strategy on Amazon includes advertising. Sponsored Products Ads are among the most well-known formats – both among sellers, vendors, and customers. They fall under the PPC category of Amazon Advertising and promote a specific product through an ad in the search results for a particular keyword.

For inexperienced online sellers or newcomers in the Amazon space, the many different advertising formats on the platform can quickly become overwhelming. Therefore, we will clarify the most important questions about Sponsored Products in Amazon advertising: How do Sponsored Products work, how can sellers create them, and how can such campaigns be strategically employed to increase the conversion rate?

What are Amazon Sponsored Products?

On Amazon, Sponsored Ads are well-known among customers and popular with sellers. They represent the third important component within Amazon PPC, alongside Sponsored Brands and Sponsored Display Ads. They are placed on the search results page, for example, between a Brand Ad and the first organic search results. However, placement within the organic results of a search results page or on a product detail page is also possible. Sponsored Products are easily recognizable, primarily due to the fact that they are marked with the label “sponsored” under the product image on the left.

Sponsored Products ads on Amazon are characterized by the fact that they always promote a specific product. Customers who click on such an ad are always directed to the respective detail page. It is not possible to link to a different page. Additionally, these ads are mostly keyword-based (Keyword Targeting). This means that an ad is displayed for a specific keyword. In the example above, four different listings of disposable masks are promoted for the keyword “mouth and nose protection.”

Successfully Advertising on Amazon – Requirements

You benefit the most from your advertisement when it is displayed in the first position, thus having higher visibility than your competitors’ ads. The following requirements must be met for this:

Example Case:

You are selling mouth and nose protection masks and want to advertise these products on Amazon under the keyword “mund nasenschutz.” After researching the topic of PPC ads on Amazon and analyzing your competitors’ strategies, you find that a competitor has bid 30 cents on the same keyword (“mund nasenschutz”). Therefore, you bid 31 cents and are favored by the algorithm. Additionally, you use repricing software that gives you a Buy Box share of up to 95%. After launching the ad, your ad competes with that of your competitor. However, your ad is favored by the algorithm, leading to better sales of your masks compared to the competition.

Why should sellers advertise their products at all?

The often-cited competition on Amazon is not exaggerated, as this is the basis on which the trading platform operates: the excellent user experience has already attracted millions of customers, and more are continually joining, which in turn encourages sellers to sell on Amazon as well. The increased selection enhances the customer experience – and the cycle begins anew.

This also means that Amazon is becoming increasingly important as a product search engine. At the same time, sellers are finding it more challenging to place their listings visibly. High visibility is a prerequisite for sales and thus for success on Amazon. Sponsored Products and other PPC campaigns can effectively increase this visibility. Alongside solid SEO, sponsored products are therefore an important component of the sales strategy to increase market share and revenue.

Additionally, Amazon Sponsored Products Ads are also very effective during the launch of a product. Here, the primary goal is to increase its visibility – after all, new products often have no reviews and no or only a poor ranking. Advertising can help improve both.

However, Amazon sellers should not create Sponsored Products Ads individually for just one or two products. To generate maximum success, a well-developed strategy and the combination with other advertising formats are necessary. In any case, a comprehensive keyword research must be conducted first.

Additionally, there are different match types that determine how closely the match between the keyword and the search term must be for the ad to be displayed. For example, if the advertiser selects the broad match type, many search terms are covered with relatively little effort. However, this comes at the cost of precision, and the conversion rate may decrease. Exact match types are more precise but also require more effort.

For more information on the topic of PPC strategy and building Sponsored Products advertising campaigns, you can find it here: “Structuring Sponsored Products Ads Correctly”.

What do these ads cost on Amazon?

Amazon Sponsored Products are allocated using the PPC method. “Pay per Click” means that the advertiser does not pay for merely displaying the ad (known as impressions), but only when a customer actually clicks on the ad. However, it is impossible to provide a general answer regarding the total cost of Amazon Sponsored Products ads or campaigns and the standard bid per click (Cost per Click / CPC). This is dependent on several variable factors.

First of all, each advertiser places a bid on how much they are willing to pay for a click, for example, €0.45. The highest bidder wins the placement and occupies the first ad position. The final cost per click is therefore largely determined by your own bid and the bids of other sellers. The higher the competition for a specific keyword, the higher the click price usually rises, along with the standard bid.

Amazon Sponsored Products vs. Sponsored Brands on Amazon

The differentiation between Sponsored Products and Sponsored Brands often causes confusion. The differences primarily lie in the structure of the ad, the linking, and the advertising purpose:

Product Targeting with Sponsored Products Campaigns

Since 2020, Amazon Advertising has also offered Product Targeting for Sponsored Products Ads. The difference from keyword-based targeting is that ads can be directed towards products, brands, product categories, and other product features through Product Targeting. However, the billing model and possible placements of the ad on Amazon remain the same. Ads with Product Targeting are more frequently displayed on detail pages than keyword-based campaigns.

The applications of Amazon Sponsored Products with Product Targeting are diverse, especially in cross-selling, protecting one’s own brand, and brand awareness:

Dynamic eCommerce Ads on Amazon

With Amazon Dynamic eCommerce Ads, advertisers have another tool available for increasing sales. Although this ad format belongs to the Demand Side Platform (DSP) and is therefore not directly part of Amazon Sponsored Products, we will briefly cover it here, as the Dynamic Ad promotes a single product and looks very similar to the Sponsored Products Ad. In contrast to this, the Dynamic eCommerce Ad is based on retargeting and can also be displayed in apps or on external third-party websites.

In retargeting, collected data about customer behavior is analyzed and used as the basis for ad placement. For example, if a user has viewed a specific brand or product, they can be reminded a few days later through a Dynamic eCommerce Ad that they are interested in it, increasing the likelihood that the customer will actually make the purchase. This makes retargeting particularly suitable for directing external traffic back to the product detail page.

Conclusion: Diverse Advertising Opportunities with Amazon Sponsored Products

Sponsored Products are rightly the most popular advertising format in Amazon’s advertising ecosystem. They can boost sales of existing products as well as increase the visibility of a newly launched product. When strategically used in advertising campaigns, they significantly contribute to enhancing the visibility and profitability of a product.

The various options for ad placement are particularly interesting: instead of keyword targeting, Sponsored Products can also be displayed using product targeting. With Amazon DSP’s Dynamic eCommerce Ad, retargeting is even possible.

Another advantage is that, through the PPC method, typically only clicks are paid for, not impressions. This allows even PPC beginners to have control over their advertising budget and to carefully consider how much they are willing to pay for a click.

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Image credits in the order of the images: © funstarts33 – stock.adobe.com / © Screenshot @ Amazon / © Gecko Studio – stock.adobe.com / © Screenshot @ Amazon