Amazon Advertising guide: How to reach customers and sell more

Amazon Ads has become a powerful platform for businesses of all sizes, both on and off the Amazon marketplace.

This article explores the various types of Amazon Ads, their features and how they can benefit different businesses.

Whether you’re a small local business or a large brand, understanding Amazon’s advertising options can help you reach new customers and grow your business.

Understanding Amazon advertising today

When most people think of Amazon advertising, they typically envision promoting products sold on Amazon through Seller Central or Vendor Central. 

However, Amazon’s advertising ecosystem has expanded significantly, now offering options for service and local businesses that don’t sell physical products on the Amazon marketplace.

The scope and capabilities of Amazon ads have been growing at an exponential rate. 

Amazon has been actively developing the functionality and products in its advertising suite, enhancing targeting options, expanding eligibility criteria and introducing new features like audience targeting and customer retargeting.

Amazon advertising can be broadly divided into two main categories:

• Sponsored ads
  • This includes:
    • Sponsored Products.
    • Sponsored Brands. 
    • Sponsored Display. 
  • These ad types are specifically designed for products sold through Vendor Central, Seller Central and Kindle Direct Publishing.
• Display ads
  • This category comprises two main products:
    • Amazon DSP (demand-side platform).
    • Sponsored Display for All Business (formerly called Non-Endemic Sponsored Display).
  • Both of these display ad types are available for businesses not selling goods on the marketplace. 
  • These ads appear not only on Amazon-owned sites like Amazon.com, Twitch and IMDb but also on other sites with which Amazon has direct partnerships.

As we delve deeper into each ad type, we’ll explore their unique features, targeting options and best practices to help you navigate the diverse landscape of Amazon advertising.

Sponsored ads

Amazon has been aggressively expanding the targeting options and products available within its Sponsored Ads suite. Advertisers on Amazon’s marketplace have more options than ever.

Let’s walk through the primary ad types used within Amazon’s self-managed ad service for its marketplaces worldwide. 

Sponsored Products

Available platforms:

• Vendor Central. 
• Seller Central. 
• Kindle Direct Publishing.

Eligibility requirements:

• Products must be in one or more eligible categories, have inventory available and be eligible for the Featured Offer to advertise. 

Targeting available:

• Keyword. 
• Category. 
• Product.

Placement locations:

• Amazon Marketplace search results. 
• Product detail pages.

Creative required:

• All creative is derived from the product listing on Amazon’s marketplace. 

Sponsored Products should be the starting point for almost every Amazon ad strategy for products sold through the Amazon marketplace. It is not uncommon for this ad type to make up as much as 80% of an advertiser’s budget.

One of the primary placements for this ad type is the search engine results page, which can provide the most significant lift in sales and organic ranking.

Using keyword targeting for Sponsored Products is generally one of the primary ways advertisers increase conversions for a keyword phrase to improve the organic ranking of their products.

Advertising on Amazon directly impacts organic results, especially for keyword-driven searches.

Sponsored Products have minimal availability for creativity, so it’s essential to optimize your product’s title, structured data and primary image for both organic search and ad conversion.

Sponsored Products campaigns have no monthly or upfront fees and are always on a cost-per-click basis.

Your ads may be displayed at the top of, alongside, or within shopping results and on product pages, on desktop and mobile. Ads are shown to shoppers based on relevant keywords or products.

At this time, adult products, political items, used products, refurbished products and products in closed categories are not eligible for advertising.

Sponsored Brand Ads

Available platforms:

• Vendor Central.
• Seller Central.
• Kindle Direct Publishing (only when you have at least three unique titles under a single pen name).

Eligibility requirements:

• Brand Registry is required to run this ad type. However, you do not need the Buy Box for it to run. 

Targeting available:

• Keyword.
• Category. 
• Product.

Placement locations:

• Amazon Marketplace search results. 
• Product detail pages.

Creative required:

• Creative must consist of:
  • 50-character headline.
  • Brand logo.
  • Custom image.
  • Product detail page components.
• Creative will show custom image on left with products on right that images and titles pull from detail page. 

Sponsored Brands can direct customers to either product detail pages or store pages. 

One advantage of these ads is that you don’t need to be the merchant holding the Buy Box for them to run, making them especially beneficial for brands that lack exclusivity on featured offers.

Typically, Sponsored Brand Ads account for 10-20% of a brand’s marketplace advertising budget and operate on a cost-per-click basis.

Originally, you could only run Sponsored Brand Ads if you had at least three products. Now, this requirement has been removed, allowing brands with just one product to use these ads.

Sponsored Brand videos are an effective way to capture visibility in search results and are among the most popular methods for utilizing Sponsored Brands. These videos yield a high return, particularly for products that fold, transform or are new to the category.

Sponsored Brands are available for vendors, book vendors, Kindle Direct Publishing (KDP) authors, agencies and professional sellers enrolled in Amazon Brand Registry.

Dig deeper: Amazon Ads: Maximizing Sponsored Brands campaigns

Sponsored Display (Marketplace)

Available platforms:

• Vendor Central. 
• Seller Central.

Eligibility requirements:

• Brand Registry is required to run this ad type. However, you do not need the Buy Box for it to run. 

Targeting available:

• Category. 
• Product. 
• Audiences.

Placement locations:

• Detail page. 
• Non-native placement in search results.

Creative required:

• Creative must consist of:
  • 50-character headline.
  • Brand logo. 
  • Lifestyle image.
  • Product detail page components.

Sponsored Display is the newest type of sponsored product ad. 

Over the last two years, the ability to target and retarget with sponsored display has drastically increased. This makes it a powerful tool to use Amazon audiences and retarget views and purchases of specific ASINs for your products and competitors.

This ad type usually accounts for 5-15% of the overall ad budget. However, there can be a greater variance for this ad type, with some brands using it heavily and others not. 

Sponsored Display supports cost-per-click (CPC) and cost-per-thousand viewable impression (vCPM) pricing options without minimum campaign spend requirements. 

Ad placement can be found across the Amazon store and thousands of apps and websites.

Sponsored Display allows you to target Amazon’s first-party audiences and customers who have viewed or purchased specific products or product categories. This capability makes it particularly effective for retargeting customers.

Keep an eye on ‘Rufus’

Amazon has also rolled out an AI shopping assistant called Rufus, but there is much debate on its usefulness and customer adoption. 

At the time of this writing, Amazon specifically states that there is no reporting to show Rufus’s efficacy or even control placement.

Sponsored product ads: Best practices

• Maximize performance and budget: Maximize performance and budget with Sponsored Ad products before moving to the display and programmatic ads below.
• ROI and performance: Sponsored Ads tend to be much better for ROI and performance-based campaigns. An exception would be if you’re looking to create demand for new-to-category products.
• Funnel positioning: Sponsored Ads are generally at the bottom of the funnel and are designed to capture existing demand rather than create it. However, there are use cases for Sponsored Brands and Sponsored Display to help drive new customer awareness and acquisition.
• Full funnel approach: Amazon has increased its focus on pushing advertisers to a fuller-funnel approach. They are also working to expand Amazon Marketing Cloud (AMC) to include Sponsored Ads, giving advertisers more insight into the overall customer journey.

Dig deeper: Amazon Ads: How to boost efficiency and reduce wasted spend

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Display and programmatic advertising

Until recently, the only option for display ads on Amazon was Amazon DSP. 

While this has been a widely used tool for both companies with and without physical products, the high minimum spend was a deterrent for most small brands. 

Amazon recently brought Sponsored Display for All Businesses (formerly called Non-Endemic Sponsored Display) out of beta as an option for brands with smaller budgets. 

Amazon DSP

Amazon DSP has been a key player in programmatic advertising for many years. It offers an extensive suite of tools for analyzing customer conversion and targeting first-party audiences.

While it can effectively grow brand awareness, it tends to be less ROI-focused than Sponsored Ads.

One major drawback is the minimum ad spend requirement, which ranges from $10,000 to $35,000 per month, making it prohibitive for many small businesses.

Additionally, managed DSP services with Amazon require a minimum spend of $50,000 per month. 

To assist advertisers in navigating customer journeys, Amazon provides tools like Amazon Marketing Cloud to enhance understanding and optimize strategies.

Sponsored Display for all businesses (SDFAB)

Sponsored Display for all businesses is a new product designed for small and local service-based businesses.

It allows them to leverage Amazon’s audience targeting capabilities and the views and purchases of specific products for their display ads.

Advertisers can target Amazon’s first-party audiences or focus on customers based on product views and purchases.

SDFAB does not allow targeting at the ASIN or product level; instead, targeting is available at the sub-category level.

In some sub-categories, you can further refine your targeting by factors such as age ranges, brand, reviews or pricing.

Additionally, you can target by location and optimize for specific goals, including page views, page visits or the newly launched lead form.

This service does not require a minimum spend, allowing businesses of all sizes to use the power of Amazon’s customer data to reach highly targeted potential audiences.

It is important to note that as this is Amazon’s newest ad product, it still has some growing pains. This is something to watch as the abilities and features of this ad product continues to grow.

Dig deeper: Amazon Ads for lead generation: What advertisers need to know

Mastering Amazon Ads: Strategies for sellers and non-sellers

Amazon advertising is continually evolving, enhancing its capacity to convert and expanding the channels through which businesses can reach customers.

With its in-depth understanding of customer behavior, Amazon provides advertisers with valuable data insights that facilitate a comprehensive approach to their advertising strategies.

This evolution allows businesses to effectively engage with their target audience and optimize their marketing efforts for greater success.

Dig deeper: 5 reasons Amazon Ads is better than Google Ads for ecommerce