Amazon Advertising 101

Their logo may be an approachable smile, but getting a foothold on Amazon’s platform as a seller isn’t easy. Businesses who want greater visibility in the Marketplace quickly discover that there are a number of approaches to advertising on Amazon, each with plenty of caveats and nuances.

If you’re wondering how to get started, here are the basics of Amazon Advertising so you can choose the path that’s best for your business.

Why advertise on Amazon?

You may offer a quality product at a competitive price, but your success always comes down to being discovered by consumers - meaning, if you’re out of sight, you’re definitely out of mind.

Amazon arranges search results according to their algorithm, so in order to be visible, your products need to be indexed and ranked for the terms that shoppers type into the search bar. Fail to accomplish this, and even products that are a perfect match for that potential buyer’s search terms will end up buried on page 20 of the search results. Considering that 71% of Amazon customers never look beyond page 3, a high search ranking is a must for success.

As more and more consumers view, purchase and rate your product, your search ranking will improve organically. When you’re brand new to the Marketplace, however, it’s unlikely that you’ll be able to gather the momentum you need to gain significant rank on your own.

Amazon Advertising allows sellers to pay for more visibility on the platform, greatly improving the likelihood that shoppers will engage with those products. With time and patience, these engagements translate to sales and positive feedback, which in turn improve search rankings. This positive feedback loop is the path to obtaining “the flywheel effect”– a term that describes having enough momentum behind your sales velocity to sustain consistent sales with minimal advertising investment.


How does Amazon Advertising work?

With 66% of people turning to Amazon to research potential purchases, it’s more than an ecommerce platform – it’s a search engine.

Amazon analyzes the terms that shoppers search and retrieves a ranked list of results. Relevance is an important part of how these results are ordered, but it’s also heavily influenced by keyword bids.

Keyword bidding allows businesses to offer up an amount of money that they are willing to pay each time a shopper searches for one of their keywords and clicks on their product. This system incentivizes Amazon to make sure that relevant products with the highest keyword bids appear towards the beginning of the search results.

Investing in keywords or ad space on the platform helps your products become more top-of-mind for shoppers. It also demonstrates to Amazon that you are invested in their platform – a critical part of getting the flywheel turning.

What are my options for Amazon Advertising campaigns?

There are three basic types of Amazon Advertising campaigns within the Amazon Ads self-service platform:

Sponsored product campaigns.

Sponsored product campaigns are accomplished through keyword bids that promote individual products. You may have noticed a subtle “sponsored” logo next to certain items in your search grid – this indicates that advertising spend has influenced that product’s search ranking. When shoppers click on sponsored merchandise, they are directed to the product detail page.

These campaigns are great for conversion. Consumers who are ready to make a purchase and have a strong sense of what they are looking for are naturally drawn toward visible, relevant sponsored products. Because this kind of campaign is the least expensive, it can be great for products that already have good brand awareness, or more utilitarian products that don’t tend to rely on brand awareness for conversion.

Sponsored brand campaigns.

Sponsored brand ads can appear within shopping results or above the search grid. They can be used to direct shoppers towards a product as well as your entire brand store.

Because they look more like traditional banner ads, they allow for greater design creativity. It’s even possible to feature a short brand video in place of static images – a fantastic way to redirect shoppers’ attention from other static search results.

While these ads cost more to run than sponsored product campaigns, the initial investment can be worthwhile for brands that are building awareness. Shoppers can encounter these ads while shopping for related products – a critical first step in converting a first-time buyer.

Sponsored display campaigns.

The most complex, tactical approach to Amazon Advertising are sponsored display campaigns. Unlike the other two campaign types, these ads can appear either on or off Amazon’s platform and are served to consumers who have shown interest in your product or related categories.

Sellers can run display campaigns within their own category, or purchase available ad space on competitor’s pages in an attempt to redirect shoppers back to their products. It’s even possible to serve display ads to customers who viewed your product details but didn’t make a purchase as a way of convincing them to re-engage.

Because of the level of complexity involved, sponsored display ads are the most expensive and the least common type of Amazon Advertising campaign. However, for brands trying to stake a claim in extremely competitive categories, the extra spend may be worth it.

Which type of Amazon Advertising campaign is right for my business?

The best approach to Amazon Advertising depends on several key considerations, like your existing brand awareness, advertising budget and goals for growth. There are also more complex factors that can influence your choice, like the length of your sales cycle, the composition of your product category and the shopping behaviors of your target audience.

To get the biggest return on your initial advertising investment and improve your organic search rankings so that your advertising spend becomes more cost-effective over time, it’s best practice to partner with an Amazon marketing company. Amazon Advertising experts can analyze your product category holistically and make informed recommendations on how to make your products visible and competitive.