Understanding Amazon PPC Sponsored ads Structure and Benefits

In this post, you will differentiate Amazon PPC Advertising’s sponsored ad types, identify benefits and use cases, examine placements across devices, and select the appropriate ad type for your campaign objectives.

Identify the benefits and use cases for Sponsored Brands and Sponsored Products.

Select the appropriate ad type for campaign objectives

The customer decision journey

We know that the customer decision journey is not linear. It’s interconnected across stages, and each journey can be different. Sponsored ads are generally used to reach customers with high purchase intent: customers who are at the consideration and purchase stage of the shopping journey. 

Understand how Amazon PPC sponsored ads affect customers with high intent to purchase

Sponsored ads focus on the consideration and purchase sections of the customer decision-making journey. Leveraging these ads can increase product discoverability, making your products viewable to these high-intent customers and helping drive sales.

Let’s explore a few scenarios that demonstrate how the right Amazon PPC sponsored ads can make products easier for interested buyers to discover.

1. A customer is interested in buying a multivitamin for the first time, but they are unfamiliar with the different brands and product offerings. By searching on Amazon, they find an advertised product at the top of search results. They decide to purchase the product because of its strong customer reviews and ratings.
2. A customer has been a longtime buyer of a certain brand of tea. They search for that brand on Amazon with the intent to refill their supply and see an ad at the top of search results that is advertising more products from that brand. Clicking the ad allows them to see other flavors offered that they weren’t aware of before.
3. A customer is looking to purchase a new pair of headphones that recently broke. They search for the brand they originally purchased and see an ad for a brand of headphones they are not familiar with. Clicking the ad leads them to the product detail page, which has better reviews than those of the original product they purchased. They decide to try out this new brand by purchasing.

Availability 

The availability of sponsored ads varies for these roles.

Vendors

Vendors, or those who represent vendors, who are active in Vendor Central, Advantage Central, or Kindle Direct Publishing, and who sell products from eligible categories, can use sponsored ads.

Sellers

Sellers, or those who represent a seller, who are active, professional sellers with a professional seller account (instead of an individual seller account) can use sponsored ads.

Agencies

Agencies that represent an eligible seller or vendor can use sponsored ads.

Sponsored Products and Sponsored Brands

Let’s take a look at how to understand the differences between Sponsored Products and Sponsored Brands.

Sponsored Products

Promotes individual products

Appears within product detail pages and shopping results

Clicking on the ad will direct to the product’s detail page

Sponsored Brands

Promotes a collection of products

Appears on product detail pages and at the top, within, and at the bottom of shopping results

Features a custom headline and logo or image

Clicking on a product featured will direct to product detail page

Clicking on headline or logo will direct to the brand’s Store or page featuring a collection of products

Sponsored Products

When customers search for a product on their desktop or mobile device, they may come across Sponsored Products.

The customer sees the Sponsored Products ad at the top of their search page. The ad incorporates native-looking creative elements familiar to Amazon shoppers, such as star ratings, reviews, and product prices. The ad uses content from that product’s detail page and requires no design or copywriting on the part of the advertiser.

When the customer clicks the Sponsored Products ad, they are directed to the product detail page

Now let’s look at the same Sponsored Product on mobile.

The customer sees the Sponsored Products ad at the top of the search page on their mobile device. Similar to the desktop version, the mobile ad also incorporates native-looking creative elements familiar to Amazon shoppers, such as star ratings, reviews, and product prices.

Just like with desktop, when the customer clicks the Sponsored Product, they are directed to the product detail page.

Sponsored Brands:

Let’s explore the components of Sponsored Brands.

When customers search for a product on their desktop or mobile device, they may come across Sponsored Brands ads.

Native-looking elements

The ad incorporates native-looking elements familiar to the Amazon shopping experience, such as product images and titles, and appears prominently in search results while the customer is in the shopping mind-set.

Note for sellers: To use Sponsored Brands, a seller must be a brand owner and can only promote ASINs that are registered to the brand the seller owns.

Headline image

The customer can click on the image or headline of an ad.

Product collection or brand store

When customers click the image or headline of an ad, it takes them to a page featuring a collection of products or the brand’s Store.

Product image

The customer can also click on a specific product image in the Sponsored Brands ad.

Product detail page

When customers click on any of the products within the ad, it takes them to the product detail page for that product.

Seller vs. vendor availability

There are differences as to where sellers and vendors can set up campaigns using Sponsored Products and Sponsored Brands.

Vendors

Vendors can set up Sponsored Brands and Sponsored Products campaigns in the advertising console.

Sellers

Sellers can set up Sponsored Brands and Sponsored Products campaigns in Seller Central.

Note: To use Sponsored Brands, the seller must be enrolled in the Amazon Brand Registry, and can only promote ASINs that are registered to the brand the seller owns.

Sponsored ads and campaign objectives

Selecting the right sponsored ad type for your campaign can help you reach your goals. Here, you’ll learn how to choose the approach sponsored ad type to help you drive sales for the campaign.

When to use sponsored ads

You can use both Sponsored Products and Sponsored Brands together to drive sales, increase discoverability for a new product, and continue to capture engaged customers from display advertising campaigns.

Let’s explore how best to use sponsored ads to get the most from your campaign.

-Drive Sales

A company wants to focus on driving sales. They use:

Sponsored Products for their best-selling products

Sponsored Brands to drive traffic to show their entire product suite

-Launch New Products:

A company launches a new line of products. They use:

Sponsored Brands to feature the products together with a custom headline to drive traffic to a Store, or a product listing page to drive brand awareness across the range of new products

Sponsored Products to help ensure they are appearing in search results and related product detail pages to drive discoverability

-Reach engaged customers

A company wants to make sure they are maximizing their reach with a display campaign and use Amazon’s full suite of products. They use:

Sponsored Brands to place their logo and message with the same products they are advertising in display campaigns to help drive sales

Sponsored Products to help ensure they capture the audience they are focusing on with their display campaigns

How to meet campaign objectives

Let’s explore how to use Sponsored Products and Sponsored Brands to drive sales.

Drive sales

A company wants to focus on driving sales of their tennis shoes. They use Sponsored Products for their best-selling products and Sponsored Brands to drive traffic to show their entire product suite of shoes.

Increase discoverability of a new product

A company launches a new line of toothbrushes. They use Sponsored Brands to feature the products together with a custom headline to drive traffic to a Store, or product listing page to drive brand awareness across the range of new toothbrushes. They also use Sponsored Products to help ensure their ads are appearing within search results and related product detail pages to drive discoverability.

Capture engaged customers

An athletic clothing company wants to make sure they are maximizing their reach with a display campaign and use Amazon’s full suite of products. They use Sponsored Brands to place their logo and message with the same products they are advertising with display campaigns to help drive sales. They also use Sponsored Products to help ensure their ads are appearing within search results.

Pulse check

Ely has been selling their line of health and sports drinks on Amazon for a couple of years now. They are about to launch a new product, and want to use sponsored ads to help increase discoverability for their new product.

Which ad product(s) should they consider using?

1. Sponsored brand ads
2. Sponsored product
3. Both

Sponsored Products will help ensure their new product will appear within product detail pages and search results.

They can also use Sponsored Brands to feature the products together with their logo and a custom headline to help drive brand awareness.

Buying sponsored ads

Sponsored Products and Sponsored Brands come from an unguaranteed, auction-based CPC inventory-buying model. Let’s take a look at how this works.

The auction process

When a customer looks for items on Amazon using the discovery bar, Amazon runs an auction to determine which sponsored ad will display. In this example, a customer looks for “bluetooth headphones.”

Amazon determines all of the ads with the highest relevancy. When it comes to relevancy, Amazon uses an algorithm that takes multiple factors into account to decide which ads to display. The relevancy algorithm is in place to ensure the best shopping experience for the customer.

The auction also decides which of the most relevant ads has the highest cost-per-click (CPC) bid. A CPC bid is the maximum amount that an advertiser is willing to pay if their ad is clicked. The winner of the auction will pay an amount slightly higher than the second highest CPC bid if their ad is clicked.

Relevancy and the auction process

Let’s explore how relevancy affects the auction process.

Weak relevancy

If you selected the keyword “lipstick” for your Bluetooth speaker ad, your ad will likely not display, regardless of your cost-per-click (CPC) bid. This is because there is little or no relevancy between the keyword and the historical search data.

Strong Relevancy

However, if you selected the keyword “audio” with your Bluetooth speaker ad, your ad will have a chance to display because there is a greater degree of relevancy. The greater the degree of ad relevancy, the higher the chances are that your ad will appear.

CPC bid

Let’s explore how your CPC bid affects the auction process.

Payment process

The winner of the auction will pay an amount slightly higher than the second highest CPC bid if their ad is clicked. This is referred to as a second-price auction.

For example, if your bid is the highest at $0.85, and the second highest bid is $0.73, you’ll pay an amount slightly higher than $0.73.

With your bid of $0.85, you have agreed to pay Amazon up to $0.85 if the ad is clicked. If it is not clicked, you will not pay for the impression.

Bid price

The higher the bid, the greater the chances are that your ad will appear.

Pulse check

You’re an organic seed seller who sells on Amazon. You want to increase the likelihood of your sponsored ads appearing in front of potential customers. Which of the following keywords is the best?

1. Energy Drink
2. Speakers
3. Sneakers
4. Gardening

“Gardening” would be the most relevant keyword out of these choices to organic seeds.  Keywords like “sneakers,” “energy drink,” and “speakers” would probably have little to do with organic seeds.

Pulse check

The organic seed seller wants to bid on the keyword they chose in the previous pulse check. Which of the following CPC bids gives them the greatest chance of winning the auction?

$0.72

$0.55

$1.05

$0.50

Pulse Check

The organic seed seller won the bid on their keyword with a CPC bid of $1.05. The second highest bid was $0.72. Which amount is the seller likely to pay for the click?

$0.73

$0.55

$1.05

$1.06

The winner of the auction will pay an amount slightly higher than the second highest CPC bid if their ad is clicked. The second highest CPC bid is $0.72, so the organic seed seller will pay slightly more than that bid.

Solidify your knowledge by reviewing the following points.

1. Sponsored ads are generally used to reach customers with high purchase intent: customers who are at the consideration and purchase stage of the shopping journey.
2. Sponsored ads are available to vendors, brand-registered sellers, and agencies that represent them.
3. You can use sponsored ads to drive sales, increase discoverability for a new product, and continue to capture engaged customers from display advertising campaigns.
4. Sponsored ads are a cost-per-click ad solution. An auction determines which sponsored ad with the highest bid is most relevant.