Why implement Amazon Sponsored Products?

In an increasingly competitive Amazon environment, sellers need to be using every single possible tool available to get their products in front of their target audience. Amazon Sponsored Products strategy has always been and will continue to be one of the most powerful tools for boosting discoverability and incremental sales for Amazon sellers.

For the ones who are not familiar with the platform, Sponsored Products are in the Amazon Marketplace and drive traffic to an Amazon detail page. These ads are placed on the right rail of Amazon’s Search Engine Paid Results, Amazon SERP, at the top and bottom of the SERP, and on the carousel on product detail pages.

As more and more Sellers join Amazon to also try to get their slice of the pie, the price to play within Amazon’s platform will increase. As demand in bidding auctions keeps rising, Amazon sellers will need to implement new advanced paid marketing campaigns and strategies to win over new customers and improve customer loyalty.

We gathered three Amazon Sponsored Product optimizations that every seller should be implementing in 2020 to outsmart their competitors and increase conversions.

Basics of the Amazon Sponsored Products Auction

Before we get into how to optimize your Sponsored Products strategy, it’s important to grasp the fundamentals of how the SP auction actually works.

When a customer browses Amazon for products, Amazon finds all Sponsored Products ads that contain keywords that match the customer’s search or browse page. In the case of Automatic Campaigns, where there are no keywords, product content is used to determine relevancy.

Amazon’s first step is to eliminate any ads that are not currently winning the Buy Box.

The ads are then analyzed for relevance. Ads that are seen as irrelevant are removed from the auction.

Let’s see an example of this process.

If a customer is browsing  “concealer”, Amazon finds all Sponsored Products ads that contain the keywords that match the customer’s search or browse page.

If a seller has bid on the keyword “concealer” in an ad group that contains makeup brush ads, Amazon determines the makeup brush ads are not relevant and removes them from the auction. The remaining ads are then ranked and displayed to Amazon customers in the ad rank order. The ad rank order is based on the seller’s bid and the likelihood the ad will get clicked.

Epinium Tip: Remember that campaigns that have been running for longer have a higher chance of displaying ads so click history is really important in Amazon’s bidding algorithm.


How to differ from your competitors to make sure that your ads show up in the search results?

1. Campaign structure

The first step to finding out and gathering the best Amazon keywords for your products is to set up an initial catalog campaign in Sponsored Products. This should include all your products.

Also, it’s important to make sure that your entire catalog is displayed when it comes to advertising – then you can begin to figure out which terms customers and potential customers are using in their search to find their products. The goal of Amazon’s keyword gathering is to find out and bid on keywords or search terms used by your potential customer with the aim of finding your products.

In the past, the Amazon Search Terms Report provided sellers with a report that indicated the exact product SKU associated with each search term, which was extremely valuable data. Unfortunately, Amazon updated the report, so it no longer identifies which product is associated with the search term.

This change, inevitably made it more difficult for sellers to identify the relationship between keywords and products. For example, we know “makeup” is having a great performance, but we can’t match that keyword with the appropriate SKU.

One proposed solution is to build your campaign structure with only one SKU per ad group. That way you can attribute the success of the term directly to the SKU purchased or clicked on. By segmenting the campaign, this solution directly impacts the bidding strategy and the overall success of the campaign.

Hence, the more detailed you get with your campaigns, the more control you will have over your products, and the more informed you will be regarding which keywords or products to invest your budget in.

2. Keyword gathering

The next step is gathering keywords. Since Amazon customers tend to have a higher intent to purchase, selecting the best keywords for your products is a vital component of your marketing strategy. Bidding on the right keywords for your products can improve your page sales rank and organic listings, and will ultimately influence your product sales.

The tricky part is figuring out what the best tools are for keyword gathering. Sellers should utilize the Search Terms Report for Sponsored Products located in Seller Central as their main source of keyword gathering as well as other great tools.

3. Optimized product targeting

Negative keywords are just as important to identify as popular keywords. If these keywords keep being unnoticed, you would be risking your ad spend on under-performing terms or with a low CTR or low conversions.

The goal for Negative Keywords is to ensure that sellers are getting their products in front of search terms that are actually relevant to the products they are advertising while avoiding allocated spend to keywords that are generating clicks without conversions.

Identifying negative keywords gives sellers the ability to target a specific audience and ultimately improve the performance of Sponsored Products Campaigns. If you begin to use negative keywords you will begin to see a higher ROI.

 If you want to see more tips on how to improve your conversion rate with Amazon Sponsored Products, check out our other post on Amazon Advertising.

As usual, if you liked this post, make sure to stay tuned for more posts like this and leave a comment in the comments section below!

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