The Fundamentals of Amazon Advertising
There are three primary types of Amazon advertising: Sponsored Products, Sponsored Brands, and Sponsored Display Ads. Your Amazon advertising strategy will determine how much Amazon advertising budget you should allocate to each type of ad in order to get the most out of your eCommerce marketing budget. This article describes the fundamentals of each of the different approaches and shares the pros and cons for each.
March 17, 2022 - By HINGE COMMERCE
Amazon advertising (also known as Amazon sponsored ads) can help your customers discover and engage with your brand. Amazon advertising used to be known as Amazon Marketing Services (or AMS). There are 3 primary types of Amazon ads: Sponsored Products, Sponsored Brands, and Sponsored Display Ads. In this article, we will share the advertising strategy for eCommerce as well as the metrics you should consider in order to maximize your marketing campaigns.
DEFINE YOUR AMAZON ADVERTISING STRATEGY
When considering advertising on Amazon, that will meet your brand objectives, it’s helpful to visualize a purchase funnel or the customer journey. Generating awareness is at the top of the funnel. To drive awareness, you need to target a wider customer base, and your goal is to cast as wide of a net as is practical. Sponsored Brands and Sponsored Display Ads are the Amazon ad types that are designed to help drive customer awareness. On the other hand, to drive product purchase or conversion, the customer target is narrower and specifically defined. Here, Sponsored Product campaigns are best suited for targeting customers who are already aware of your brand and close to making a purchase.
HOW TO DEFEND YOUR BRAND AND GROW SALES
If your Amazon advertising strategy is to drive market share or awareness, then your Amazon ads may skew higher in the sales funnel. This means that your target audience will be broader. As a result, your AMS costs may be higher, and your click-through rates may be lower. On the other hand, if the goal of your eCommerce advertising is to maximize Return on Investment (ROI), then your Amazon ads may skew towards the bottom of the funnel. In this instance, click-through rates may be higher and your Advertising Cost of Sales (ACoS) may be lower. Although your AMS will be lower, you may also not reach as many people.
Because of these pros and cons, the best practice is to have advertising executions on all of the different types of Amazon advertising formats – spanning Sponsored Product ads, Sponsored Brand ads, and Sponsored Display ads. However, the amount of AMS budget that is allocated across these different types will change depending on your business lifecycle and the degree of competition in your category. Having each type of advertising campaign gives you the ability to defend your brand and grow your market share at the same time.
Before you dive into advertising on Amazon, be sure that you have optimized your organic search performance on Amazon first. This means making sure that your listings have best-in-class copywriting and great digital content.
HINGE COMMERCE is a certified Amazon Advertising Agency. As an official Amazon Advertising Agency, we can also help you with Amazon DSP. HINGE COMMERCE as the eCommerce expertise, specialized tools, and technology to help get the most out of your advertising budget. Please contact us if we can help you grow your brand and optimize your advertising performance.
Watch this video featuring our Senior Advertising Manager to learn more.