What are Sponsored Products on Amazon?
Sponsored Products on Amazon are ads targeted at keywords and ASINs similar to Google Adwords. They allow us to promote individual products within Amazon search results and on product detail pages. Sponsored Products are the most popular ads on Amazon.
Getting started with Sponsored Products on Amazon
1. Structuring the Sponsored Products campaign on Amazon
To start, we need to have a plan and structure for each product or set of products. If we are using a set of products, we make sure that the selected products have similar keywords and profit margins.
The plan consists of two campaigns:
- 1 automatic campaign (with 1 automatic ad group)
- 1 manual campaign (with 1 ad group for broad match keywords and 1 ad group for ASIN targets)
The idea behind this is to use the automatic campaign for ongoing research on targets with minimal effort and regularly transfer high-performing keywords. The ASINs can be precisely optimized for maximum performance.
This approach combines the advantages of automatic campaigns (low effort) and manual campaigns (high precision).
2. Setting up the Sponsored Products campaign
Creating an automatic campaign is easy. All we need to do is name the campaign and define a budget and CPC bid. As soon as we start the campaign, Amazon examines the Sponsored Products and automatically starts displaying our ads for the search terms selected by Amazon.
We create a manual campaign to add our own choice of keywords. It is recommended to research around 20 keywords and add them to the “Broad” ad group.
We use negative targets to make sure impressions are generated only in the ad groups where we want them. Because certain keywords and ASINs could be the target of both the automatic and manual campaigns.
However, as soon as we add a target to a manual campaign, impressions in the automatic campaign should stop, because this target will now be optimized and adjusted in the manual campaign.
To stop impressions in the automatic campaign, we must add a negative phrase keyword or ASIN each time a target is added to the manual campaign. This should happen when campaigns are created or when a target is harvested and transferred from automatic to manual.
3. Optimizing the Sponsored Products campaign on Amazon
Regular optimization of the campaign is key to success with Amazon ads. However, we will only make adjustments to our PPC campaigns once we have collected enough data (impressions, clicks, conversions, etc.) to evaluate the current performance of the campaign.
Once we have collected enough data, we should regularly perform the three recommended optimization measures that we have named below:
Transferring keywords and ASINs from automatic to manual campaign
We should regularly transfer high-performing search terms (keywords and ASINs) from the automatic campaign to the broad match and ASIN ad groups in our manual campaign to be able to optimize them with precision.
We will need to periodically track the search terms (keywords and ASINs) running in the automatic and manual campaigns.
By filtering out unprofitable search terms from our Amazon ad campaigns and ad groups, our goal is to eliminate them.
- Irrelevant search terms that clearly do not apply to the product.
Unprofitable search terms that may be relevant to our product, but only generate clicks without conversions.
- Optimizing Amazon CPC ad bids
We will need to define the campaign’s objective and target ACoS values.
- The objective is to maximize sales or impressions: target ACoS value = break-even ACoS = profit margin before advertising investment
- The objective is to achieve the target profit margin after advertising investment: target ACoS value = target ACoS = profit margin before advertising investment – profit margin after advertising investment.
Once we have defined our objective, we can test different CPCs to see which one gets us closer to the objective.
Keep in mind that it is essential to allow enough waiting time between keyword and ASIN bid changes. We must ensure that we have collected enough data (impressions, clicks, conversions, etc.) to help us evaluate if further adjustments in the offer are necessary.
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