Amazon recently released its Q4 performance to Search Engine Journal and it turns out they smashed it. Ad revenue from Q4 was up 41% YoY & the quarterly revenue went above $4 billion for the first time in the 4th quarter ever!

This makes Amazon's ad revenue from 2019 approximately $14.1 billion, which is a 39% increase from the $10.1 billion they saw in 2018. With this Amazon takes the title of the 3rd biggest ad platform of 2019 behind Google & Facebook.

More people are now focusing on Amazon ads as the penny drops that it's a really good platform to advertise on if you're an e-commerce business.

I am here to introduce you to the world of advertising on Amazon, let's go.

Amazon advertising revenue growth year on year
how advertisers are spending on amazon

What are Amazon ads?

Let's start right at the beginning. There are 3 types of ads on Amazon, Sponsored Product Ads, Sponsored Brand Ads & Sponsored Display Ads & amongst the 3 of them, they achieve 3 particular things really well.

  1. Drive Sales. Promote your best selling products & direct traffic to your entire product suite. Amazon users have a much higher purchase intent than users of other advertising platforms.
  2. Reach Engaged Customers. Reach the customers that are familiar with your brand & logo, capture your audience, engage new customers.
  3. Launch New Products. Feature your product with a custom headline. Send traffic to your store, to a product or increase brand awareness. Appear in the search results & push discoverability.

Type 1: Sponsored product ads

  • Promote 1 product across search results & product detail pages.
  • Consumer attraction - showing to customers looking for products like yours. Drive visibility & sales.
  • Conversion abilities - grab the customers with high purchase intent.
  • Easy setup, live within an hour.
  • Target manually or automatically.

Best practice: make good use of negative keywords. Start with automatic targeting.

sponsored product ads in the amazon results.

Type 2: Sponsored brand ads

  • Highlight your brand & up to 3 products.
  • Increase impressions to your whole catalogue.
  • Increase brand engagement.
  • Create custom landing pages on your store to send ads to.
  • Build a creative & branded experience.

Best practice: Make use of 30-40 keywords, A/B test ads. Use actionable headlines with a good CTA.

Sponsored brand ads within the amazon results.

Type 3: Sponsored display ads

  • Reach a wider audience.
  • Build your brand.
  • Positive impacts on your bottom line.
  • Less competitive, therefore slightly cheaper. (but often shows a weaker conv. rate)
  • Undercut your opponents. Place underneath competitor listings.

Best practice: run continuously.

Sponsored display ads show on competitor product listings.

Ads are no good without targeting options though!

So with targeting you can go one of two routes, you can make use of manual targeting, choose your keywords, products or categories to target, or you can use automatic targeting, typically lower bidding, good for keyword research and as a starting point. With automatic targeting, Amazon decides what products are relevant to each other and shows your ads where it’s algorithm deems relevant.

What products can be advertised?

Any product that is retail ready can be advertised. Retail ready is essentially a scale you should measure your product against to predict if your product will perform well being advertised.

  • At least 3 clear images, videos are a bonus & dimensions on images help.
  • Star rating of at least 3.5.
  • At least 15 reviews.
  • Good description.
  • Good & relevant title.
  • The product must be new & in stock.

Aside from that, to advertise your products, that specific product needs to be winning the buy box.

The buy box is the actual part of the Amazon product detail page where it says ‘Add to Basket’ or ‘Buy Now’. When multiple sellers are selling the same product they are all listed on the product detail page. The person winning the buy box at the time of purchase wins the sale, therefore all sellers compete for the buy box.

If you aren’t winning the buy box, sponsored product ads on the products not winning the buy box will get paused automatically. Individual sellers aren’t eligible for buy box & on top of that, you can’t win buy box if your product isn’t new & in stock.

How do you win the buy box?

You need a good reputation, customer reviews. It helps to have your orders fulfilled by Amazon, be price competitive, be retail ready, minimise shipping time and give good customer experience.

That's all folks!

So this is the basics of Amazon ads, naturally, there’s more to it than making the ad, targeting the ad & making the ad win. If you want some deeper insight into the world of Amazon Ads & how it can help your e-commerce business get in touch with us.

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Meet the author ...

Maddie Crawford

PPC Manager

Maddie has worked in digital marketing since her apprenticeship in 2017 but quickly realised her true passion was in the PPC side of things! Since then she has worked across ...