How to Optimize Your Amazon Sponsored Product Ads

Amazon is constantly evolving its marketplace by adding new ways to interact with customers to drive traffic to its listings. Amazon Sponsored Product Ads (SPAs) have become one of the best ways to do just that. Sponsored Product Ads are great for driving discoverability and achieving incremental sales. More and more merchants are adopting this form of advertising. Given the quick rise of SPAs, it is important for you as a merchant to have a Sponsored Product strategy. Standing still is not an option. The Amazon marketplace is continuously getting more competitive. In this post we will discuss ways to optimize Manually targeted SPA campaigns by utilizing data you uncover from existing Automatic targeted campaigns.

Introduction to Sponsored Products

Sponsored Products is a pay-per-click advertising solution to promote your products with targeted ads. Sponsored Products is a pay-per-click program, meaning you will be charged when a customer clicks on your ad and is taken directly to the item’s detail page. It is up to you to select which products you want to advertise and control how much you spend. Resellers, brand owners, manufacturers, drop-shippers and all professional sellers can use Amazon Sponsored Products to create ads for their buy-box eligible listings. SPAs appear in highly visible placements on Amazon or on the Amazon app. Ads may appear in relevant customer search results and on product detail pages on PCs, tablets and smart phones.

SPAs can have the following benefits:

• Boost listing visibility.
• Help shoppers discover your products.
• Increase your sales by delivering highly relevant ads to targeted customer searches.

Sponsored Products help customers discover your products by giving you the opportunity to display your listings on page 1 of search results. With SPAs, your ads may appear on product detail pages and also within Amazon’s search results.

Sponsored Products are best suited for the following types of marketing:

• To promote a new brand or product line that you just launched.
• To promote new product variations (such as additional models, colors, or sizes) or seasonal items.
• To promote excess or stale Fulfillment by Amazon (FBA) inventory or clearance items.

With Sponsored Products you’ll be able to easily measure your return on advertising investment and optimize your ad spend. You only pay when your ad is clicked, and a customer is taken directly
to your product detail page. You can monitor impressions (the number
of times your ad was displayed), track your click- through rate, review your advertising spend, and analyze your average cost of sales (ACoS) by downloading your sales reports and conversion data.

What’s more, with SPA, your ads only show when you are in the Buy Box. In other words, your ad will only show if Amazon knows that you will have the buy box when the traffic arrives on the listing page. Otherwise, you’ll pay for the advertising and your competitors will get the sale. That’s not fair.

Automatic Targeting Campaigns vs. Manual Targeting Campaigns

Amazon offers the option to run two types of SPA ads: Automatic targeting and Manual targeting. Here is a brief description of each type of campaign type.

Automatic Targeting

Automatic targeting campaigns offer you a chance to find keywords that are diamonds in the rough. With Automatic targeting, you can take advantage of Amazon’s shopping intelligence by allowing them to choose the keywords that are relevant to your ad. Automatic targeting provides highly relevant search terms for the products you choose to advertise, specific to the way customers shop on Amazon. This campaign type leverages the experience Amazon has in finding the right keywords and eliminates the work of selecting keywords manually. You simply choose your products and set a single bid for the campaign. As your campaigns run, Amazon starts to fine tune the performance of your ads to continually find new keywords to use. Therefore, automatic campaigns are a great way to do data harvesting. You can take the best keywords from your automatic campaign and use them in a manual campaign.

Manual Targeting

Manual targeting offers you more control over the campaigns you’re creating. While with automatic campaigns you rely on Amazon to generate the keywords that drive your ads, with manual campaigns you select the keywords that you want to use to drive your ads. One of the best tactics to use to create Manual targeted ads is to take the keywords generated from your automatic campaigns and use them in your Manual campaigns. Manual campaigns allow you to apply high-performing search terms from your Automatic campaigns, and then customize your bid and match type for each keyword – thus allowing you to greatly optimize your ads.

Creating optimized Manual targeting SPA campaigns by using insights from your Automatic targeting campaigns can help you reach interested shoppers and increase sales.

Steps to Convert your Sponsored Products campaigns from Automatic to Manual Targeting

Creating optimized Manual targeting Sponsored Products campaigns by using insights from your Automatic targeting campaigns can help you reach interested shoppers and increase sales.

Consider the following steps to apply learnings from Automatic to Manual targeting:

Step 1: Download Your Automatic Targeting Search Term Report
Let your Automatic campaigns run for about two weeks before you start harvesting data. After that point, download your Automatic Targeting Search Term Report from the Campaign Manager in Seller Central.

Step 2: Identify Top-Performing Customer Search Terms Using Key Metrics
Depending on which key performance indicators you use to evaluate your campaign goals, sort the performance data to identify the top-performing customer search terms. These metrics may include impressions, clicks, click- through-rate (CTR), total spend, average cost per click (CPC), and advertising cost of sales (ACoS). For example, search terms with high impressions and high conversions that meet your ACoS goals may be good keywords to use in your manual campaign. ACoS stands for Advertising Cost of Sales, which is the percent of sales spent on advertising. This is calculated by dividing total ad spend by attributed sales. For example, if you spent $16 on advertising resulting in attributed sales of $80, your ACoS would be 20%.

Step 3: Create A New Manual Targeting Campaign Using High-Performing Search Terms
Use the search terms you identified from the Automatic targeting campaign to create a new Manual targeting campaign. Since you know these search terms drove clicks and sales in your automatic campaign, set a higher keyword bid than the average CPC identified in your search term report to help serve more impressions in your manual campaign. You also have the flexibility to set your keywords with broad, phrase, and exact match.

Step 4: Monitor Keyword Performance and Fine-Tune Bids and Budget
Once your manual campaign is live, go to your Campaign Performance Report and review the same metrics that you did with the automatic targeting campaign. Continue to optimize your manual campaigns by logging into Campaign Manager at least 2 times per week to monitor keyword performance and fine-tune your bids and budget. To help choose your keyword bid, you have the option to use the suggested bid feature, which calculates recommendations based on recent winning bids for ads similar to yours.

Step 5: Continue to Run Automatic Targeting Campaigns for New Search Data and Keywords
Because Automatic targeting uses one campaign-level bid rather than custom keyword-level bids, these campaigns may have lower returns. Think of these campaigns as research tools you invest in for the short term to gain insights that help you extend your reach and sales in the long term. Once you’ve gathered initial insights, lower bids across Automatic targeting campaigns to improve your ACoS while still allowing the campaigns to capture new keywords as shopper demand and trends change seasonally throughout the year. Running both campaigns is a great way to continue collecting search data and to help you find new keywords that can improve your advertising results.

Tips to Consider When Creating Sponsored Product Ads

• Create ad groups by product type so your keywords are relevant to that ad group.
• Start with at least 25 – 40 keywords in an ad group.
• It’s ok to put one key product in its own ad group to differentiate a star product.
• Remember that optimization and refinement is an ongoing process, so you have to keep maintaining your campaigns to continue to get a good return on your investment.
• Products can live in multiple campaigns so it’s ok to have them in multiple places.
• Keywords can live in multiple manual campaigns. However, relevancy matters a lot so make sure that the keyword is a good fit for the Manual targeting campaign in which it is being used.
• Use your ACoS metric as a guidepost so you can down bid or pause keywords that aren’t working.

Conclusion

Amazon Sponsored Product Ads (SPAs) offer a good way to drive traffic to your Amazon listings. Given that many Amazon merchants are using SPAs to drive traffic, it is important for you as a merchant to develop an SPA strategy of your own. In this post we discussed how to create and optimize your Manual SPA campaigns by using data uncovered from your Automatic targeted ads. If done correctly, this strategy can go a long way to increase your products’ discoverability and to increase sales. The key is to use the data that you harvest in a smart way to continually optimize your new Manual targeted campaigns.

Business Consulting Services: If you’re a small business owner looking to start or improve an online business then let me show you how to benefit from my experience. I have helped several online resellers grow their businesses by developing an online strategy to sell on Amazon, eBay or any other marketplace. Call me at 310-574-2541 or email me at Pez@Pezlogic.com for a complimentary business review.