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Alongside Headline Search Ads, Sponsored Product campaigns are one of the performance marketing activities that Amazon makes possible for sellers in the Seller Center. Sponsored Product campaigns can be used by all sellers with the professional tariff and an existing Buy Box. Headline Search Ads have been available to all sellers with a registered brand for several months. In the near future, it can also be assumed that the last performance marketing activity of Amazon Marketing Services (AMS), the Display indication is activated for sellers in Seller Central. In the following article, I describe my approach to activating and optimizing Sponsored Product campaigns.

Different types of sponsored product campaigns

Sponsored product campaigns are paid advertisements for products that can be placed in Seller Central. Sponsored Product campaigns enable sellers to place their products on the first search results pages for specific search queries. In this way, the first sales can be generated without the need for organic placement on the first search results pages. Sponsored Product ads are placed on the basis of the specified keywords and are billed per click (CPC) as with Google AdWords.

How are Sponsored Product ads structured?

The ads of Sponsored Product campaigns cannot be customized. In addition to the title, Amazon also takes over the image, price, brand name, ratings and shipping information (Prime, shipping costs & shipping time).

Where are Sponsored Product campaigns played out?

Sponsored Product campaign ads are displayed either in the search results pages or on the product detail pages. When and where the respective ad is displayed depends on the amount of the bid as well as the click-through and conversion rate.

What requirements must be met for Sponsored Product campaigns to be used?

  1. The seller must have a professional seller account.
  2. Sponsored Product campaigns must be activated for the respective product category.
  3. The product must have the Buy Box. It is not possible to activate the respective product without a Buy Box.
  4. CPC must be high enough for the campaign to be competitive. CPCs that are too low lead to no impressions.

How much do I pay per click on the ad?

With  When placing Sponsored Product campaigns, you tell Amazon the maximum amount you are willing to pay per click. However, this amount is not usually payable. Amazon's auction procedure is based on the Vickrey auction (two-price auction), so that the winner of the advertising auction only ever has to pay €0.01 more than the second highest bidder. For this reason, the maximum CPC should always be stated so that the highest possible number of auctions can be won.

What does the attribution model of Sponsored Product campaigns look like?

Amazon's standard attribution model is 14 days click-through. This means the following: If a user clicks on your ad and orders your product within the next 14 days, this conversion is attributed to the ad. View-through conversions are not counted by Amazon.

What is the difference between keywords and search queries?

The search queries are the exact search queries entered by users before they clicked on the ad. The keyword, on the other hand, is the respective word that was assigned by the advertiser in the campaign.

What does ACoS stand for?

Amazon Sponsored Product Campaigns

ACoS stands for Advertising Cost of Sale and is visible at campaign, ad group and keyword level.

ACoS / cost of sales = advertising costs / advertising sales

In my search query report, numbers & letters are displayed as B00I9T12J2?

Since Sponsored Product ads are also displayed on product detail pages, the search query report may also show the ASIN of the respective product detail page from which visitors reached your product listing.

Sponsored product campaign:

In the next few steps, I will show you how to run your first Sponsored Product campaign. When running the campaign, you can choose between an automatic and a manual campaign.

  • Automatic campaign:

With an automatic campaign, you tell Amazon the daily budget, select the product to be advertised and inform Amazon of your standard bid (standard CPC). This completes the placement of the automatic campaign. Amazon decides which keywords the respective product is displayed for based on the product category and the keywords used in the product listing.

  • Manual campaign:

With manual campaigns, advertisers have significantly more selection functions for the design. At ad group level, you can select not only the product, but also the desired keywords. Amazon is also given a standard bid (CPC) here, which is overwritten by the keyword-specific CPC.

Amazon PPC Guide

After we have named the campaign and defined a daily budget, we now select a campaign type (in this case manual targeting). In the next step, we name the ad group and select the product to be advertised.

Amazon Sponsored Product Campaigns

 

We then set a standard CPC and enter the desired keywords for the ad groups. Here you can find out how to find the perfect Find out keywords for your Amazon product. When entering the keywords, you can either add the search terms suggested by Amazon or define your desired search terms and match types via "Enter your own keywords".

After we have named the keywords for which the respective product should appear, the last step is to name the keyword-specific CPC.

Sponsored Product Campaign Guide

Advantages of an automatic campaign?

  • Very little time required
  • Automatic keyword research

Disadvantages of an automatic campaign?

  • Very inaccurate display of the ads
  • Usually a higher ACoS than with manual campaigns

Advantages of a manual campaign?

  • Very precise display of the ads
  • Keyword-specific CPC bids possible
  • Focus only on top keywords possible

Disadvantages of a manual campaign?

  • High effort in the creation & optimization of campaigns

Which campaign should be placed?

New sellers in particular regularly ask themselves which type of campaign is optimal. My recommendation is that you should start with both an automatic and a manual campaign. The most important keywords should be booked in a manual campaign with the "Exact" match type. At the same time, it is advisable to run an automatic campaign to generate new keyword ideas. Once sufficient information has been generated, the relevant search terms that led to purchases should be transferred to the manual campaign.

What does the optimization of an automatic campaign look like over time?

  1. Generation of new keyword ideas.
  2. Irrelevant and not  post working keywords as negative keywords.
  3. Relevant and well-performing keywords should be transferred to the manual campaign.
  4. Keywords from the manual campaign should be entered as negative keywords with the match type "Exact Match" in the automatic campaign.

What keyword match types are there?

As with Google AdWords, keywords can be transferred in different match types for Sponsored Product campaigns. The following match types are available:

  • Exact match keywords: When using exact match keywords, the ad is only displayed if the search query is identical or very similar to the keyword (e.g. plural).
  • Phrase match keywords: When using phrase match keywords, the ads are only displayed if the search query contains the exact sequence of keywords.
  • Broad-Match-Keywords: When using broad match keywords, the ads are displayed when the search query contains the keywords. This applies regardless of the order of the search queries used.

The following illustration shows the differences between the respective match types once again: 

Keyword Match Types Amazon

Which type of match should be selected?

When placing manual campaigns, I use both the "Broad" and "Exact" match types. Each ad group of a campaign exists twice. The first ad group contains only "exact match keywords" and the second "broad match keywords". Both ad groups contain the same keywords and differ only in the match type. In the broad match ad group, the keywords entered are also entered as negative exact match keywords so that there is no overlap of search terms between the exact and broad match ad groups. The broad match ad group is ultimately used to generate further keyword ideas, which are more precise than the search queries of the automatic campaign due to the keywords transferred from the exact match ad group.

Amazon also allows the use of negative keywords in order to better control the targeting of automatic campaigns and manual campaigns with broad & phase match keywords. When using negative keywords, however, there are only two match types (exact match and phrase match). Negative keywords can be created both at campaign level and at ad group level.

Once you have selected the desired campaign in the ad manager, you can now add negative keywords for all ad groups. Of course, this is only advisable if the negative keywords are irrelevant for all products in the campaign. Otherwise, negative keywords should be placed at ad group level. 

Negative keywords Amazon

The best tips for optimizing sponsored product campaigns

1. combine similar products in an ad group

A specific set of products and keywords is created for each ad group, whereby you should ensure that all products that match the respective keywords are inserted into a common group. After all, this is how the products should be found using the search. With this method, however, you must be careful when analyzing the profitability of your Amazon Ads, as the products in a common advertising group can still differ in terms of their profit margin, which can have an impact on your profitability. Accordingly, before you start Amazon PPC optimization, you should understand what would be a suitable ACoS for your Amazon Ads.

2. consistent campaign structuring

As a rule, you can roughly structure your advertising activities through your Sponsored Product campaigns, which can be both an advantage and a disadvantage. In most cases, the campaign structure is based on certain characteristics. You can structure them accordingly:

  • by product category
  • by brand
  • according to search terms

However, it is important to follow your structuring consistently so that there are no so-called repeat ads, which would be the case, for example, if you were to create one campaign based on the search terms and the other campaign based on the product category.

3. optimize your PPC spend based on sales

In most cases, there are many different products in an ad group that share the same keyword; and after some time, you will know which products sell best within an ad group. In order to achieve the maximum number of sales within a group, you have the option of removing those products from the respective group that are performing poorly. This allows you to direct attention and clicks to the products that are more likely to convert clicks into purchases. Furthermore, by adjusting the CPC bid price, you can determine where (on which page) your ad will appear in the search results and how many clicks it will receive. The goal of CPC optimization is to reach the sweet spot, a kind of effective zone where ad spend and revenue (spend / revenue = cost of sales) reach a desirable level.

4. assign a higher CPC bid to new keywords

If you add a new keyword, you should first set a higher CPC bid price in order to generate clicks and impressions with this new keyword, as it does not yet have a click history at the beginning. As soon as a click history has been built up, you can lower the bid price again in order to be able to offer an optimal price.

5. optimization of CPC bids

The optimal CPC bid differs slightly from keyword to keyword, which is why each bid can be controlled separately for each keyword in the manual campaigns. Note, however, that you need a fixed amount of data as a basis for evaluating bids, which is why you should allow at least one week for bid prices to adjust. The general rules of thumb for CPC bid optimization are:

  • If the sales costs for a keyword are above the target value, you should lower the bid to test whether advertising expenditure and sales can be brought into a desirable relationship.
  • If the sales costs are below the target value, you should test whether the ad reach and sales can be increased by raising the offer price.
  • If the keywords do not generate any sales or receive too few impressions, you should check whether they can be activated if the bid is increased.
  • Keywords that only cause costs and do not generate conversions over a longer period of time should be eliminated.
  • In general, you should regularly update your campaigns in this way in order to reach the so-called "sweet spot".

6. determination of the target ACoS

You should define your target ACoS depending on the purpose of each campaign. If you are primarily looking to make a profit, then your target figure should be based on your profit margin, with target cost of sales figures typically ranging from 5 % to 30 %. However, if you are promoting a new product and want to improve your organic visibility, then you may need to budget more for your sales or perhaps even take a short-term loss in order to secure long-term profit. In this case, your target cost of sales would increase to 100 %.

Would you like to learn more about the various success criteria for selling on Amazon? Then visit one of my Amazon seminars.

Tobias Dziuba

My name is Tobias and I am the founder and managing director of the Amazon agency Adsmasters GmbH based in Düsseldorf.

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