A Marketer's Guide to Amazon Ad Types

Editor's Note: This post was originally published in March 2022 and has been updated with additional content on April 2024.

The benefit of Amazon's marketing is illustrated in its most recent financial results. It is the third-largest digital advertising solution in North America after Google and Facebook. And in 2023, Amazon had the highest-selling Black Friday to Cyber Monday shopping weekend ever, with clothing, beauty, home, and toys amongst the top-selling categories. Customers worldwide purchased more than 1 billion items on Amazon and saved nearly 70% more during the 11 days of deals compared to the same period in 2022.

According to Amazon, in the period between Black Friday and Christmas, they had another great year; here is a quote from their CEO: “This Q4 was a record-breaking Holiday shopping season and closed out a robust 2023 for Amazon,” said Andy Jassy, Amazon CEO. “While we made meaningful revenue, operating income, and free cash flow progress, what we’re most pleased with is the continued invention and customer experience improvements across our businesses. The regionalization of our U.S. fulfillment network led to our fastest-ever delivery speeds for Prime members while also lowering our cost to serve; AWS’s continued long-term focus on customers and feature delivery, coupled with new genAI capabilities like Bedrock, Q, and Trainium have resonated with customers and are starting to be reflected in our overall results; our Advertising services continue to improve and drive positive results; our newer businesses are progressing nicely, and along with our more established businesses, collectively making customers’ lives easier and better every day. As we enter 2024, our teams are delivering at a rapid clip, and we have a lot in front of us to be excited about.

With all this potential opportunity, the instinct to get started with Amazon Advertising is powerful. But digital marketing on Amazon has its challenges. For example, Amazon does not share customer information with marketers, making it challenging to market to these customers in the future. Advertising on other platforms like Google or Facebook can be difficult when Amazon is your primary ecommerce platform.

But despite all this, the reach and scope of Amazon means that since this is where the customers are, this is where marketers should be. So here's what you need to know about Amazon Ads and how you can get started.

Three Main Types of Amazon Ads

Amazon has three main advertisement types (or ad products) that you access through Amazon Ads. They are Sponsored Products, Sponsored Brands, and Sponsored Displays. These ads are all available for use for Amazon PPC, which is a pay-per-click or cost-per-click (CPC) advertising format, so you only pay when customers click on your ad.

Like Google, Amazon uses an auction-based system that allows advertisers to place bids to display to shoppers. Here are some suggestions for getting the most out of your chosen Amazon PPC ads:

• Know your Amazon Cost of Sale: ACoS = advertising spend divided by Amazon sales
• Use the correct keywords and/or targeting strategy by developing campaigns that focus on promoting your products.
• Monitor your results to know what you should keep doing and stop.
• Be patient. Getting results will take time.
• Be fearless in re-evaluating your Amazon advertising strategy.

Amazon Sponsored Product Ads

Sponsored Products are Amazon advertisements that promote a single product. Because it is only one product, no copy or graphics are needed. Instead, the product listing is used to set up the advertisement to start running quickly. Advertisers then use keywords to target customers.

Amazon has a set of allowable product categories for using Sponsored Products advertisements. And besides falling within the permissible category, products must also be eligible for the Buy Box, the section on the right side of the Amazon product detail page, to be visible as a Sponsored Product.

Sponsored products are not allowed in the Categories of adult products, used products, refurbished products, and products in closed/gated/restricted categories. The last category requires explicit Amazon approval to sell.

Only certain parties can use Amazon Sponsored Products ads. These include professional sellers, vendors, book vendors, Kindle Direct Publishing (KDP) authors, and agencies. In addition, there are specific locations where Sponsored Products can appear—at the top of search results, alongside or within search results, and on product pages.

Setting Up Your Sponsored Product Ads Campaign

1. Begin by registering to advertise.
   • Log in to Seller Central using your username and password.
   • Register for Sponsored Products by clicking the provided link.
   • Agree to the terms and conditions, and then click on JOIN NOW.
   • You will be sent to the campaign creation page within the campaign manager.
2. Define the Campaign
   • Campaign name: Enter a name for your campaign.
   • Daily budget: Specify the average daily budget for advertising on Amazon.
   • Start and end date: For a continuous campaign, we suggest setting a start date and leaving the end date empty. This allows continuous visibility without having to create new campaigns.
   • Targeting type: Choose between automatic targeting, where Amazon automatically targets keywords relevant to product information without specific keywords, or manual targeting, where you select relevant keywords yourself.
3. Create an Ad Group
   • Name the ad group.
   • Set your Cost per Click (CPC) bid, the maximum amount you're willing to pay when a customer clicks on your ad.
4. Select the products to advertise
   • Choose the products from your listings to advertise under this ad group.
   • Click save and finish to complete the process.

Amazon Sponsored Brand Ads

Sponsored Brand Ads are Amazon advertisements that promote up to three products and an Amazon store, with targeted keywords to attract customers. Sponsored Brands create brand awareness with customers researching their product options, which leads to product sales.

These ads are large banner advertisements at the top of an Amazon search results page. It includes a brand logo, a personalized tagline, and multiple examples of products that correspond with the selected keywords.

Since the advertisement is brand-focused, it includes a link that takes the customer to a custom landing page or the brand's own Amazon Store. Within the Amazon Store, customers can browse only the products of a specific brand, and the brand owner also chooses what they want to feature in their Amazon Store. And best of all - it's free from competitors' products and advertisements. 

Products advertised through Sponsored Brands must be new products and not fall under the adult, used, or refurbished categories. The parties allowed to use Sponsored Brands are professional sellers in the Amazon Brand Registry program, vendors, book vendors, and agencies. Sponsored Products appear at the top of search results, alongside or within search results.

Creating a New Sponsored Brands Campaign

1. Sign into your account.
   • Select Campaign Manager.
   • Click on "Create a new campaign".
   • Choose Sponsored Brands.
2. Complete Campaign Info:
   • Provide a name for your campaign.
   • Set start and end dates.
   • Specify your daily budget.
3. Select Your Creative Ad Format and Destination:
   • Product Collection: Showcase a variety of products featured in your catalog.
   • Store Spotlight: Highlight up to three pages from your Store to showcase your product range and brand.
   • Video: Demonstrate your product in action for relevant to your target shopper.
4. Choose a Targeting Strategy:
   • Keyword Targeting: Specify keywords relevant to your target to help your products appear in shopping results.
   • Product Targeting: Ads can be targeted based on categories or specific products, which can be further refined by brand, price range, or review ratings.
5. Submit Your Campaign for Review

Amazon Sponsored Display Ads

Sponsored Display promotes a single product and targets customers based on their shopping activities within Amazon, regardless of whether a product is viewed or purchased. It does not use keywords for your product but one of two different targeting options: Product Targeting or Audiences. Automation and machine learning drive sales of these promoted products.

With Product Targeting, a product is promoted among audiences actively researching similar products or categories. These Sponsored Display advertisements will appear on Amazon product detail pages and/or search results pages.

Advertisements with the Audience targeting option appear on the Amazon home page, product detail pages, product search results pages, and third-party websites and apps.

A comprehensive list of products that can be promoted is on the Amazon website. Prohibited products for Sponsored Display advertisements include adult products, alcohol, prescription drugs, and devices—as well as weapons such as pepper spray, fireworks, and airsoft guns. Sponsored Display is only available to parties in the Amazon Brand Registry, vendors, and agencies with clients who sell products on Amazon.

Configure your Sponsored Display Ads Campaign

1. Campaign name: Choose a descriptive name for your campaign that includes details about the advertised products and targeting approach.
2. Start and end dates: We recommend running your campaign continuously without an end date to prevent it from abruptly stopping. Sales attributed to clicks or views on your ad may take 7-14 days to materialize, so allowing your campaign to run for a few weeks is crucial to see results.
3. Budget: Choose your daily budget and adjust it as needed. Once your campaign exceeds its daily budget, your ads won't be eligible to run until the budget resets at midnight.
4. Create an ad group: Use ad groups to organize, manage, and track the performance of your products within your campaign. Sponsored Display supports one ad group per campaign, where products share the same bids and targets (products or audiences).
5. Choose your targeting tactic: Select between two targeting tactics: product and audiences.
   • Product: Target product ads that may appear in various placements on Amazon to reach shoppers actively considering similar or complementary products and categories.
   • Audiences: Target shoppers who have visited your product detail pages, similar product detail pages, or relevant categories on Amazon.
6. Select products to advertise: Add your top-performing products from Sponsored Products and Sponsored Brands campaigns, ensuring you have at least 10 well-performing products in your campaign.
7. Select your bid optimization strategy: Based on your preferred pricing structure, choose between the CPC or vCPM model and adjust bids accordingly for maximum click or view performance.
8. Launch your campaign: Let Sponsored Display automatically generate your campaign creative to drive conversions or product consideration. 

In Conclusion

With Amazon and ecommerce shopping growing by leaps and bounds, staying on top of crucial ad opportunities is vital for any well-run business. We hope this summary of Amazon's different ad types was helpful.

Be sure to reach out to WSI to help your business with your ecommerce and marketing needs. We can help you with Amazon ad types—and everything digital marketing!