More brands across multiple sectors – such as consumer packaged goods, consumer electronics and fashion – are interested in running product-led advertising on sites such as Amazon, Walmart, Best Buy,Target and others.

This is because online advertising and shopper marketing is going through a major transformation which is being driven by a shift in online shopping behaviours. 55% of all product searches in the US start on Amazon, which suggests more people are searching directly on the large retail and ecommerce websites than on traditional search engines such as Google.

Moreover, when people search ecommerce sites for products, they are in buy mode, with a higher intent to make a purchase, making ads they see on these sites more effective. And of course, the sites help to close the loop for consumers by making it easy for them to find and buy the products they’ve seen advertised.

For Amazon specifically, Kenshoo data suggests that monthly spend by advertisers on Amazon Marketing Services (AMS) trebled between July and December last year and continued growth is expected through 2018. This increase in spend means that brands are taking note of the improved performance in this new channel and are looking to scale it.  

With AMS emerging as a prime destination for ecommerce focused advertising, it is important to understand its nuances and learn the best strategies to leverage its potential. 

AMS offers three different advertising units – Sponsored Product Ads, Headline Search Ads and Product Display Ads. Here are some insights and recommendations based on our experience of working with some of the world’s leading brands and agencies.

sponsored product ad amazon

Sponsored Product Ad

1) Getting granular with Sponsored Product Ads

The common start point for Sponsored Product Ads is to run auto targeted campaigns. This is the process by which Amazon indexes your brand’s individual ASINs/Product Detail pages (an ASIN is the unique Amazon Standard Identification Number assigned to all products on the site) and then runs machine learning algorithms against that index to select target keywords. The learnings from the best performing keywords in auto targeted campaigns can then be seeded into manual campaigns. 

Manual campaigns on AMS provide you with greater control over the specific products, keywords and ads you can include. The crucial learning point here is to use a very granular structure. Aim to allocate a separate campaign per product and a set of associated keywords. This gives you much greater clarity and better control over granular optimisations at the product level.

Let's say you are selling a suite of cases for the iPhone X with multiple colours and styles. Running auto targeted ads, if you grouped all those variations into one campaign, Amazon would index each product detail page for each variation, including all the different features, colours, styles etc. to seed the whole campaign.

Now in your manual campaign, if you had a pink leather iPhone X case and a black plastic iPhone X case, your campaign should be structured to give you the granularity to filter out particular colours/queries at a specific product level by not including them in your bids - or by specifying them as negative keywords you want to avoid.

While initially it makes sense to 'prospect' the broadest set of keywords across the whole iPhone X cases product set, as you work towards performance optimisation, you want to have the control to be able to narrow down the specific keywords per product and use negative terms to ensure that underperforming queries - that may be too broad or simply don't perform at a product level - are excluded.

2) Eligibility and Headline Search Ads  

In order to run Headline Search Ads - which are the keyword targeted banner ads that appear in a banner sized placement right at the top of the search results - your brand needs to display up to three eligible products within the ad unit. If Amazon deems any one of those products to be ineligible then your campaign will be paused and ads won’t be appearing - which means you may be missing opportunities.

headline search ad amazon

Headline Search Ad

Product eligibility for advertising is determined and related to the commerce aspects of the product. Amazon may choose to make a product ineligible for advertising for multiple reasons, including but not limited to if the product is out of stock or is not profitable enough for Amazon. 

Eligibility issues apply to all ad types on Amazon, so being aware of them is critical when building and managing your ad campaigns. 

The key learning here is that you should have backup ASINs for your brand that can be displayed in ads in case one of your first choice products becomes ineligible. You should also stay on top of notifications to ensure you can react quickly to ineligibility issues and minimize campaign pauses.

3) 'Conquesting' and defensive strategies for Product Display Ads

With Product Display Ads, which appear on Amazon’s product detail pages, you have the option to target consumers by their interests or by selecting specific products (or ASINs) they are researching. This could be your own products, competitors’ offerings or even complimentary products you think your targets might be researching. 

product display ad amazon

Product Display Ad

The most common strategies that brands are using for these ads are either conquesting or defensive campaigns.

'Conquesting', as the name suggests, involves running ads on the detail pages of competitive products– in order to entice consumers who land there to consider your product instead.  

Obviously, as well as the ads themselves, you’ve got to get your on page merchandising, images, reviews, pricing etc. spot on, if you want to be successful with conquesting. Brands and their agencies are constantly experimenting and analysing what works.

Defensive campaigns involve buying up ad spots on your own product detail pages to ensure competitors aren’t able to conquest there. The trick with this strategy is to try to upsell to a later version or higher specification of your products or perhaps create product bundles to encourage consumers to spend more (if you’re selling an iPhone maybe you could create a bundle of iPhone plus a screen protector, for example). 

Ecommerce advertising is a growing phenomenon that brands are using alongside traditional search, social and display campaigns. While it’s a relatively young discipline, advertisers are rapidly acquiring knowledge in the area and establishing best practice principles.

If you're looking for more guidance on ecommerce, why not check out our Fast Track Ecommerce training or our Ecommerce Best Practice Guide.

Oren Stern

Published 5 April, 2018 by Oren Stern

Oren Stern is General Manager, E-Commerce Solutions at Kenshoo.

Oren has more than 20 years executive experience in technology, business leadership, strategy and M&A with a proven track record of delivering results. As a general manager Oren is responsible for Kenshoo’s e-commerce marketing business line, including go-to-market strategy, product and sales.

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