8 Minutes with Activ8 | Episode 4 - Breaking Down Amazon Ad Types

During this edition of 8 Minutes with Activ8, we’re once again joined by Activ8’s PPC specialist Oliver Stannard to walk through the various types of advertising available to sellers on Amazon. Below, Ollie addresses the benefits of each and what to consider when setting your advertising strategy. 

Here are the key takeaways for brands looking to utilize Amazon Advertising.

What are the main types of advertisements available to sellers on Amazon, how do they work and what are the benefits?

Sponsored Products

Sponsored Product advertisements are keyword targeted adverts that enable advertisers to promote individual products. These adverts typically appear in two locations: firstly, on the search results pages (top, middle, or bottom) if you choose to target a keyword, and on product detail pages, if you choose to target an ASIN. With regard to clickthrough rates, sales and conversions, Sponsored Product adverts are great as they intermix and look similar to organic search results.

Sponsored Brands

Sponsored Brand advertisements allow you to promote a custom headline, brand logo, and up to three products in the advert, with a chance to send shoppers to your Amazon storefront or alternatively to a custom landing page. This is perfect for building brand awareness and acquiring new customers. This feature allows brands to showcase listings and helps customers to gain a better understanding of your offerings through a branded shopping experience, varying from simply promoting a product listing.

Sponsored Brand Video (SBV) is a relatively new feature to Amazon, allowing sellers enrolled on Amazon Brand Registry to promote standout videos in mobile and desktop platforms. All adverts appear in the search results to help potential customers discover your products and brand. All adverts are keyword targeted with a Cost-per-Click model and link directly to your product detail pages where customers can learn more and purchase.

For more information about Sponsored Brand Videos, visit our article.

Sponsored Display

Sponsored Display advertisements are another type of advert that displays within product detail pages, typically just below the Buy Box. As a seller, there is the option to target product detail pages, related categories, related interests and complimentary listings. This is similar to Sponsored Products targeting, with the primary differences being placement and ad copy. This advert type is useful for reaching your target audience and customers who are already interested in similar products.

For each of those types of advertisement, what are the differences between cost for sellers, and is there a difference in returns and conversions?

 In terms of pricing, costs can vary widely between the various types. Each advertiser is able to submit an advert bid, with an automatic auction determining which adverts will be displayed. The Cost-per-Click model depends on the highest bidder, who wins the highest position but also pays the highest price for that position. The Cost-per-Click of each bid depends on competition, the search volume of the keyword you’re going after, and the match type chosen for each keyword. For example, to target an exact, specific keyword would likely be more expensive than a phrase or broad match as targeting the exact phrase would be most likely to drive sales. Therefore, we do not see a huge difference in pricing between advert type, but instead by the keyword that you’re going after.

For conversion rates, we tend to see a great return on Sponsored Products and Sponsored Brands advertisements. With SBV, the advert format creates a contrast to the rest of the search page and naturally attracts potential customers to view the content. We recommend running SBV if chasing high conversion rates. Sponsored Brands advertising focuses on building brand awareness, so we recommend if chasing low conversion rates.

For brands with lower PPC budgets, what strategy should sellers focus on?

Budget heavily affects the type of advertising sellers should focus on. For brands with a low advertising budget, we strongly advise putting the majority of the budget into Sponsored Products advertising. Sponsored Display adverts do not have negative audience targeting and the attribution model for these adverts isn’t clear. Sponsored Display Adverts also have a CPM model instead of a CPC model, which can make performance confusing for beginners. Sponsored Brands adverts can be very competitive and costly, as you are displaying three of your products at the top of the search results; whilst very effective, we would recommend limiting your advertising spend on these if you have a low budget and instead focus on Sponsored Products advertising.

For brands with higher budgets, more of the budget can be utilised on focusing on brand awareness and driving customers to your Amazon storefront. In this instance, a Sponsored Brands advert can be a great idea.

Do you recommend different types of advertising depending on the sector, or are all types of advertising useful for products across the board?

We recommend experimenting with all types of adverts no matter what sector you’re selling in. It’s good to run a range of advertising types and capture as much data as possible to enable educated decisions from there. It’s important to note that products from certain sectors or categories may be prohibited from certain advertising options, therefore during research stages, sellers should check out the advertising guidelines relevant to their product to ensure there are no issues going forward.

Is there any advice you would give generally to someone who is new to Amazon Advertising?

Amazon is a marathon, not a sprint: don’t call it a day if you don’t get immediate results. During the first three months of PPC advertising, your goal should be to capture as much data as possible. If you’re not seeing the returns you expected initially, trust that your research will pay off further down the line.

As a member of Amazon’s Service Provider Network, all Activ8 specialists are trained and certified on Amazon Advertising. For anyone looking for support with Amazon advertising, reach out to our team.