Amazon PPC 101: Understanding Sponsored Products, Brands, and Display Campaigns

Advertising your product on Amazon isn’t just a smart move – it’s a powerful long-term strategy to boost sales and increase visibility.

While it’s not mandatory to use Amazon Ads, incorporating it into your overall marketing efforts can really set you apart, especially in competitive spaces like electronics, home goods, food, and furniture. Drawing from our own experience, we’re breaking down the three main campaign types – Sponsored Products, Sponsored Brands, and Sponsored Display – and a few Amazon Ads basics to help you decide when and how to use them for the best results.

How Amazon Ads Work

Amazon Ads run on a pay-per-click (PPC) model, using targeted keywords or Amazon Standard Identification Numbers (ASINs) to display relevant ads to consumers. You’ll set a max bid for targeted keywords or ASINs. When shoppers search, Amazon’s auction system kicks in, determining which ads appear and in what order. Factors like your bid amount and the relevance of your ad all play a role in this process.

Benefits of Amazon Ads

52% of consumers start their product search on Amazon. Compare that to the 43% that use a search engine, and something is very clear: whether you’re looking to get more eyes on your products, drive sales, or fine-tune your competitive targeting, Amazon ads are an essential part of a comprehensive marketing strategy.

The real beauty of Amazon Ads, though, is their precision. With Amazon Ads, you can tap into detailed targeting and sales attribution to reach shoppers who are ready to click "Buy Now." Amazon’s data also lets you build custom audiences, helping you reach people based on behaviors like product page visits or past purchases.

This approach makes it no surprise that Amazon boasts a higher conversion rate (CVR) than platforms like Google. Amazon averages a 9.44% CVR, while Google Shopping comes in at 1.91%, and Google Search at 3.75%.

Plus, Amazon Ads are cost-effective. With an average CPC of $0.95 in 2024, compared to Google’s $2–$4 CPC range, Amazon is a budget-friendly option for newer sellers. It also works well in tandem with other paid strategies, like Google Ads or social media, allowing you to reach a broader audience while keeping costs in check.

Keyword Targeting: Auto vs Manual Targeting

When running Amazon Ads, you can target keywords automatically or manually, depending on your goals and comfort level.

Auto Targeting

Auto targeting uses Amazon's data on shopper clicks and purchases to select relevant keywords and optimize your ads automatically. This is a great feature for beginners, as it helps you gather insights into how shoppers interact with your products, allowing you to refine your strategy over time.

There are four different types of keyword match types when using autotargeting.

• Close Match: Ads appear when shoppers use search terms closely related to your product.
• Loose Match: Ads appear when shoppers search for keywords loosely related to your product.
• Substitutes: Target shoppers considering similar products from different brands.
• Complements: Target shoppers viewing detail pages of products that complement yours.

Manual Targeting

For a more hands-on approach, manual targeting lets you select specific keywords and fine-tune your campaign based on performance. This approach often leads to more effective ads and lower costs since you’re making data-driven adjustments. There are three keyword match types with manual targeting.

• Broad Match: Your ad appears for searches that could be related to your keyword but aren’t an exact match (e.g., bidding on "macarons" may result in your ad appearing in a search for "French baked goods").
• Phrase Match: Your ad appears for searches that contain the exact phrase or a similar variation (e.g., bidding on "French pastries for parties" may show your ad when someone searches for "wholesale French pastries").
• Exact Match: Your ad appears only if the exact keyword is used in the search (e.g., bidding on "macarons" will show your ad only when someone types in "macarons").

You can also target specific products by ASIN, making this option highly focused. We recommend starting with at least 20 relevant ASINs for the best results.

Amazon Ads Campaign Types

Amazon Ads offers three primary campaign types: Sponsored Products, Sponsored Brands, and Sponsored Display. Each campaign type serves a different purpose and helps you reach your audience in unique ways.

Sponsored Products

Sponsored Products are the bread and butter of Amazon Ads. They show up in search results and on product pages, looking similar to organic listings. This ad type is perfect for promoting individual products and increasing visibility.

Key Features:

• Ads appear in search results and product detail pages, similar to organic listings.
• No need for brand registration to use Sponsored Products ads.

Key Performance Metrics:

• Click-Through Rate (CTR): Measures how often your ad gets clicked after being seen.
• Advertising Cost of Sales (ACoS): Calculates the percentage of ad spend to sales revenue (lower ACoS means better efficiency).
• Return on Ad Spend (RoAS): Measures the revenue earned for every dollar spent on ads.

Assets Needed:

• Product listing with clear images and descriptions.
• Relevant keywords for targeting.

Budget Considerations:

• Ideal Budget: Start with $10-$50 per day, depending on product price point and competition.
• Budget Strategy: Begin with a moderate daily budget to gather data. Use dynamic bidding to maximize returns while controlling costs. As you optimize, consider incremental increases for top-performing keywords.

Sponsored Brands

Sponsored Brands ads help build awareness for more than one product using visual elements that Sponsored Products do not use. For example, if you sell floor mats, Sponsored Brands can showcase up to three related products in a single ad.

Key Features:

• Ads appear at the top of Amazon search results as a headline banner or further down the page as a video.
• Multiple formats available: Product Collection, Store Spotlight, and Video.
• Requires brand registration.

Key Performance Metrics:

• CTR: Measures how often your ad gets clicked after being seen.
• ACoS: Monitors ad spend relative to sales. Sponsored Brands often focus on brand visibility, so a higher ACoS may be acceptable.
• RoAS: Measures return on ad spend, important for assessing long-term customer acquisition and retention.
• Brand Metrics: Track new-to-brand customers, reflecting how many first-time customers were acquired.

Assets Needed:

• Brand logo, custom tagline, product images, and video (if applicable).
• Amazon Storefront or custom landing page for click-through.

Budget Considerations:

• Ideal Budget: Start with $50-$100 per day depending on your brand's prominence and target market.
• Budget Strategy: Allocate a larger daily budget since Sponsored Brands ads are more visually prominent. Adjust bids to achieve premium placements, particularly for high-traffic areas like top-of-search results.

Sponsored Display

Sponsored Display ads are used for reaching shoppers both on and off Amazon. They help introduce products to new audiences or retarget customers who previously engaged with your product detail pages. Sponsored Display ads appear on Amazon as well as across affiliate sites like Google, Facebook, Netflix, Twitch, and mobile apps.

Key Features:

• Automatically selects placements based on your targeting tactic.
• Two targeting tactics: Product Targeting and Audience Targeting.
  
  • Product targeting allows sellers to reach shoppers actively considering similar or complementary products and categories on Amazon.
  • Audience targeting allows sellers to reach shoppers who have visited the product detail page, similar products, or any relevant category on Amazon.
• Can use static images or video for creative assets.

Key Performance Metrics:

• Impressions and Reach: Measures how often your ad is seen by potential customers.
• CTR: Gauges how well your ad attracts clicks.
• ACoS: Reflects ad efficiency in converting views to sales, particularly for retargeting.
• RoAS: Evaluates the profitability and return on your advertising spend.

Budget Considerations:

• Ideal Budget: Start with $50-$150 per day, depending on the scale of your retargeting efforts and campaign goals.
• Budget Strategy: Sponsored Display supports both PPC and CPM (Cost Per Thousand Impressions). Start with at least $50 per day to ensure adequate reach, adjusting bids based on audience segments to balance targeting and remarketing efforts.

Choosing the Right Amazon Ads Campaign Type for Your Goals

Now that you’ve got a handle on Amazon’s ad options, it’s time to pick the right campaign for your objectives:

• Sponsored Products: Great for driving direct sales and increasing product visibility.
• Sponsored Brands: Perfect for building brand awareness and showcasing multiple products.
• Sponsored Display: Ideal for retargeting shoppers who have shown interest in your product or for expanding your reach beyond Amazon.

For maximum impact, try integrating all three campaign types into your strategy. Sponsored Products can drive sales, Sponsored Brands can build brand recognition, and Sponsored Display can re-engage and expand your audience.

Whether you’re new to Amazon Ads or optimizing your current strategy, setting clear goals and regularly refining your campaigns based on key metrics like CTR, ACoS, and RoAS will help you achieve the best possible return on your investment.

Need help using Amazon Ads to support your marketing efforts? Contact Aztek today to speak with one of our expert about your digital advertising goals.