Considering that Amazon has 310 million active customers and sells more than 353 million products, it’s safe to say it’s one of the most powerful, cost-effective ways to deliver product suggestions to your target market. While Amazon ads don’t get as much buzz as Google or Facebook advertising options, the platform is just as important (or even more so) for ecommerce sellers.
Whether you just want to learn more about Amazon’s advertising features or you’re ready to launch your first campaign, here’s everything you need to know about Amazon ads.
What Are Amazon Ads?
Just like with Google PPC, Amazon ads are a way to get your products at the top of search results when people shop on Amazon. Usually when you search for a product, you’ll see a sponsored product at the top of results. That’s an Amazon Ad.
Amazon ads don’t just show up when you search, but also while browsing categories and products. They can show up on individual product pages as well.
Compared to search PPC, where ads appear at the top of search results, there’s a lot of flexibility on where Amazon ads can appear. Like search PPC, advertisers can bid on specific keywords to get higher visibility for their products. Then they’re charged when someone clicks on the ad.
But you also have more options for creating different kinds of ads with Amazon. Here’s an explanation of the various types:
Types of Amazon ads
Like with AdWords, Amazon has several different ad types that are suitable for certain marketing goals. These include Amazon Sponsored Product Ads, Headline Search Ads, and Amazon Product Display Ads.
Amazon Sponsored Product Ads
You can compare Amazon sponsored product ads to Google’s product listing ads. They’re designed to get your products in front of people who are actively searching for related keywords. Depending on keyword relevance and bid, these ads appear above search results, at the bottom of search results pages, or sometimes on other product pages.
The links in these ads direct back to your product page in Amazon. Since these ads are keyword-based, you get some targeting features that are also available with AdWords PPC, such as using broad, phrase, or exact match keywords. You have complete control over your daily budget and campaign duration, although it must run for a minimum of 1 day.
Headline Search Ads
Headline search ads are essentially banner ads that appear in the header above search results on Amazon.
This ad type can lead back to any page you specify on Amazon, not just an individual product page. You can use them to promote several products at once or attract visitors back to a brand page. Headline search ads are cost-per-click and also keyword targeted.
Here are a few important points about headline search ads you should know about:
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The minimum bid per keyword is $0.10
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The minimum campaign budget is $1 per day and $100 overall
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You may only target exact and phrase match keywords (no broad match)
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It’s also possible to schedule campaigns to run up to 4 months in advance
Amazon Product Display Ads
Amazon Product Display Ads are a little different than the search ads mentioned above. While they do consist of product suggestions, they appear in different places, such as:
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Customer reviews pages
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Offer listings pages
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Amazon marketing emails
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To the right or bottom of search results
These ads are not keyword-targeted, instead you target specific products or interests. For example, you can target your ad towards other products that are similar to yours, or specific interest categories. They’re cost-per-click, and direct people back to a products detail page of your choice.
Targeting Amazon Product Display Ads is a fairly simple process, since you’re only allowed to target one thing.
How to Set Up and Optimize an Amazon Ads Campaign
Amazon ads are a great option to get more visibility for your products, especially when promoting new products and low exposure ASINs. But bare in mind that advertising options aren’t available to all Amazon sellers.
If you’re a vendor, in order to qualify you must be active in Vendor Central, Vendor Express, Advantage Central, or KDP. If you’re a seller, you need to have a seller account and be able to ship to all addresses in the country you’re advertising for (e.g. all UK addresses when advertising on Amazon.co.uk). You can sign up and get started through Amazon Marketing Services (AMS).
Set up your campaigns the right way, and Amazon ads should help you drive revenue that far outweighs your financial investment in advertising. Here are the key steps you should take to ensure your Amazon ads pay off:
Step 1: Choose Your Targeting Methods
Once you have an AMS account, you can choose what kind of ads you want to run from the ad type menu. Next you’ll be prompted to select a targeting type: automatic targeting or manual targeting.
With automatic targeting, Amazon analyzes your product information for you and targets your ads to relevant search queries. With manual targeting, you manually select keyword targeting for each of your sponsored products.
If you have a lot of products you want to promote like most ecommerce sellers, automatic targeting is an obvious option to save time and get started quickly. Amazon might also help identify keyword targeting opportunities that you didn’t think of. The only downside is that you don’t completely control which keywords your ads get associated with, or your match types.
That said, automatic targeting is still a great place to start so you can get an idea of which of your ASINs qualify for Sponsored ads. It will also provide helpful data reports you can use to inform your manual targeting campaigns in the future.
You can always switch over to manual targeting once you’re comfortable with the Amazon advertising system and have confidence to target campaigns on your own. Once you start your manual campaign, simply reduce the budget for your automatic campaign, or add negative keywords and keep it running separately.
If you’re interested in using Product Display Ads, you’ll click “Product Display Ads” from the ad type menu, and see two different targeting methods, product or interest. Interest targeting helps you target ads based on users shopping behavior. You can select specific product ASINs, UPCs, or keywords that illustrate the kind of products you want your ads to appear with. Product targeting allows you to select detail pages to display your ads on. You can choose specific interest categories relevant to your product.
Note: If you’re using Product Display Ads, there’s no need to worry about keyword research and targeting — you can move right on to optimizing your ads (Step 4 below).
Step 2: Keyword Research
If you’re running a manual targeted campaign for search or banner ads, you’ll need to build a list of your own keywords that you manually upload. So the next step before launching your campaign is keyword research.
Here are a few important tools/resources you can use to build your list:
Amazon Search Terms Report
If you already decided to start with an automatic targeting campaign, you’ve built up some valuable data insights you can use to inform your manual targeting efforts. The search terms report reveals important information like which search terms people are using to find your ads.
Take a look at search queries that bring up your ad and receive a lot of clicks. These will be important to target in your manual campaign. Next take a look at search terms that bring up your ad but don’t get any clicks (or very few). This should inspire some negative keywords to enter into your next campaign as well.
Long tail keyword research tools
Most people who search Amazon are a ready to make a purchase. The majority of searches that go through Amazon every month are specific, long-tail queries. So you should focus on identifying these relevant terms using long tail keyword research tools, such as Ahrefs or Ubersuggest.
Competitor keywords
Many Amazon advertisers overlook targeting their competitors’ brand keywords with their advertising strategy. Just because someone’s searching for “Keen hiking shoes” doesn’t mean they aren’t interested in purchasing a similar product from you instead.
Targeting your competitor keywords can help get more visibility for your products by associating them with popular brands. You can start getting ideas of which competitor brands to target by typing in a product keyword (e.g. “hiking shoes”) and taking note of the top brand products that come up.
Google Keyword Planner
Google Keyword Planner is designed to help AdWords advertisers brainstorm keywords for their PPC campaigns. But the results are just as relevant for Amazon ads. People often use similar search phrases when searching for products on Google or Amazon. Keyword Planner’s insights about search volume and competition will also reflect a keyword’s value on Amazon.
Once you have a full list of keywords you want to target, you’re ready to upload them to Amazon and launch your campaign.
Step 3: Choose Keyword Match Types and Ad Groups
Choosing what kinds of keywords your ads target gives you more control over what queries your ads are eligible for. There are three main match types (broad, phrase, and exact match), and which ones you choose will help you gain more general traffic exposure or target a small, precise audience.
Exact match targeting means a user’s search query must be identical to your target keyword in order for your ad to show. For example, if you’re targeting “collapsible tent for backpackers” and someone searches for “collapsible tent” your ad can’t show for their query. Exact match targeting is the most restrictive match type, but a valuable option if you want to target a small group of people who are looking for a very specific product.
Phrase match keyword targeting means the user’s search term must contain a specific phrase or sequence of words for your ad to appear. For example, if you target “coloring books for adults and kids” and someone searches for “adult coloring books,” your ad won’t appear for their query. Phrase match keywords are valuable when there’s some ambiguity about your product and different products that are relevant to similar words as yours.
Broad match is the widest match type you can use, and is sure to give you the most traffic exposure. With broad match, your ads qualify to appear for search queries that contain all of your specified keywords or their synonyms. For example, if you target “collapsible hiking tent,” your ad can qualify to appear for search queries like “collapsible tent for backpacking.”
You’ll be prompted to set a match type when you create a new keyword in Campaign Manager or use bulk uploads. You can also select match types for negative keywords. You can add more than one match type for an individual keyword, but it’s not possible to make changes to the match types of existing keywords.
The other thing you’ll need to create with manual targeting is your own ad groups. How you group your products really depends on what performance factors you want to focus on for analysis later on. For example, you could set up ad groups for each match type for a certain set of keywords. That would help you determine which match types perform best in the long run.
The standard campaign structure most marketers start with is grouping by product category. So you create a campaign for a certain category of products you offer (e.g. “men’s outdoor clothing”) then create ad groups for different product types (e.g. shoes, pants, jackets, etc.). If you’re new to PPC advertising and creating ad groups, it’s best to start with an intuitive structure like that, then move on to more complex ad grouping down the road.
Step 4: Optimize Your Ad Copy
When you make your ads, you’ll want to create compelling copy that helps your product stand out from the other listings. What kind of ad copy you create will depend on the type of ads you’re showing. Sponsored Product Ads will simply mirror what your product listing already looks like in organic results. Product Display Ads offer you more creative control.
Regardless, important elements include the product photo, product name, and call-to-action. Choose the most attractive photo that helps illustrates your product’s unique selling proposition. For example, if you’re promoting a multi-color 3-pack of leggings, you’ll want to use a photo that shows all 3 colors, not just an example of one pair.
Follow all the other PPC best practices you know about, like creating a sense of urgency. Use action words when promoting a product on sale (e.g. Save now). Lastly, you should ensure your ad is as relevant as possible to the keywords you’re targeting. For example, if you’re targeting “iphone 6 case card holder,” your ad should also mention the fact that the product has a card holder: 
Step 5: Optimize Your Product Listing
A common mistake Amazon advertisers make is focusing solely on getting traffic to their product listing. They don’t consider what happens once people actually click through.
If you’re like most ecommerce sellers, you probably have a lot of products to manage, making it difficult to keep on top of optimizing each and every listing. But if you’re going to invest in sponsoring a product, it’s best to take the time to optimize your listing as well. This help ensures visitors actually covert and purchase your product after clicking on the ad.
Here are some of the main elements you should focus on:
Product title
Amazon gives you a lot of real estate with your product title (500 characters). It’s totally acceptable and even advisable to have a lengthy, descriptive product title filled with keywords.
As mentioned above, including descriptive elements that are reflective of the search queries people use to find your products can improve ad clicks and conversions.
Product description
Your product description appears prominently on the page right below your product photos. You should use this space to include any other important keywords or information that couldn’t be a part of your product title. Instead of addressing buyer pain points and telling a story, make this section easy to scan for busy shoppers. Use bullet points to list the key product features/benefits.
Product images
You’ll want to choose the best featured image for your product, as that’s what will appear with your ad. But you should also provide plenty of helpful supporting images on your product listing page. Use images that show the product from multiple angles, in different colors, etc. If relevant, include photos that illustrate the size of the product and show it being used.
Product reviews
Reviews are probably the most important element of optimizing your product listing and associated ads because they appear in both places. So you should encourage happy customers to review your products, and make efforts to mitigate issues that caused someone to write a negative review. Addressing their complaints might prompt them to remove the negative review once they’re satisfied.
Step 6: Start Optimizing Your Bidding Strategy
Once you’ve created your ads, they’re live and driving conversions, you’re ready to start optimizing your bidding strategy. Here are the main metrics you can analyze with Amazon ads:
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Advertising Cost of Sales (ACoS) — The percent of attributed sales spent on advertising.
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Attributed Sales — The total product sales generated within one week of clicks on your ads.
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Impressions — The number of times your ads were displayed.
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Clicks — The number of times your ads were clicked.
The most important metric you’ll want to focus on is ACoS. Here’s an example of how it’s calculated: if the value of your product is $50, and you spent $15 on advertising, you can calculate your ACoS as $15/$50=.30, or 30%.
Luckily, Amazon calculates ACoS for you. You can find it associated with individual keywords in the Advertising tab.
Looking at your ACoS will help you paint a clear picture of what ads are getting you a lot of expensive clicks that don’t result in sales.
Say, for example, you have a product with an ACoS of 50%. That’s too high for comfort. Next you’ll want to diagnose why it’s so high. If you look at your cost-per-click (CPC) and find that to be quite high, that’s probably the culprit. You can compensate by lowering your bid. Or you can look at your product listing itself to see if there’s something about it that’s turning people away. If neither of those reasons are the culprit, you might just have keyword that performs poorly for promoting your products, and remove it from your campaign entirely.
You should also keep an eye out for well performing ads with a relatively low ACoS. Increasing your bid might help you drive even greater return on ad spend (ROAS).
Wrapping Up
If you’ve made it through this whole guide, you now know more that most about what advertising options Amazon provides, and how to launch and optimize your campaigns.
Amazon has been an ecommerce powerhouse for a long time now. Businesses and brands are crowding in to become vendors and sellers. Using Amazon ads to get more visibility for your key products is an important strategy to help stand out from the crowd. The more campaigns you run, the more insights you’ll gather about what products people want and the queries they use to find them. The only thing left to do is optimize your bids and profit.
