Ecommerce guide to Amazon Advertising: types of Amazon ads

Last Updated on November 3, 2023 by Zeljko Drazovic

Amazon Advertising model

The significance of Amazon Advertising is growing. For example, according to Amazon, 76% of Amazon shoppers use the search bar to find an item, and search advertising is a way for brands to stand out from the competition.

According to Patrick Smarzynski, Co-Founder at Webinterpret, today sellers need advertising to have satisfactory visibility and conversions. It’s not a matter of ‘if’, it’s a matter of ‘when and how’.

Watch the expert interview below to learn more about the changing marketplace model on eBay and Amazon.

Amazon’s advertising business is growing at a rapid pace, especially as it diversifies its ad products. Amazon DSP (Demand Side Platform) has allowed sellers to programmatically buy display and video ads at scale and target audiences on Amazon.com, Fire TV Sticks, IMDb.com, Kindles, Freedive, apps, third-party sites, apps and platforms.

Amazon Advertising vs. eBay Promoted Listings

Amazon’s PPC model is different to some other marketplaces. For instance, Promoted Listings on eBay supports the cost-per-sale funding model. Sellers are charged fees if items sell via Promoted Listings actions.

On eBay the fee is calculated by multiplying the seller-specified bid percentage (set between 1% and 100%) by the final sales price of the listing in the campaign. For instance, if you sell a product priced at 100€ via a Promoted Listing and you are bidding 5%, you’ll pay 5€. The higher the bid percentage specified for an ad, the more likely the listing will be displayed in eBay buyer search results.

Types of ads on Amazon

When selecting types of ads for campaigns, Amazon sellers have a variety of ad formats and placements to choose from, e.g. Amazon Sponsored Product, Amazon Headline Search, Sponsored Brand, etc. Below you’ll find definitions, useful facts and recommendations about given ad types.

Amazon Sponsored Product Ads

With Sponsored Product Ads, you can use manual and automatic keyword targeting. If you decide to leverage manual targeting, you can bid on three types of keywords: broad, phrase and exact. Automatic targeting leverages an algorithm to target the most relevant keywords for your product ads.

To measure the performance of your Sponsored Product Ads, use a reporting tool that displays your ads’ clicks, spend, sales and advertising cost of sales (ACoS).

Amazon Sponsored Brand Campaigns

You can direct the shopper specifically to your customized product page or your Amazon Store.

You can feature up to three unique products in your ads, customize and test your ads’ image, headline and landing page.

You can target three types of keywords:

• Branded product keywords: a combination of your brand name and a product you sell.
• Complementary product keywords: a combination of two individual products that you can sell together as they influence the demand for each other, e.g. ketchup and mustard.
• Sponsored products automatic targeting keywords: search queries that have already brought you success in automatic targeting sponsored product campaigns.

To check the performance of your advertisements, there’s a reporting feature that displays your ads’ clicks, spend, sales, estimated win rate for keywords and ACoS (Advertising Cost of Sales).

It’s recommended to feature three top-performing products in your Sponsored Brands Campaign to increase the amount of clicks and sales.

Amazon Product Display Ads

Display ads appear on product detail pages, customer review pages, on top of the offer listing page and below search results. They can also be placed on abandoned cart emails, follow-up emails, and recommendations emails.

With display ads, you can use two types of campaign targeting:

1. Product: targeting specific products and related categories (contextual). Use product targeting on competitor pages, complementary product detail pages and your own product detail pages to cross-sell and upsell similar products.
2. Interest: targeting shopper interest to reach a larger audience (behavioral).

To measure your performance, you can use a reporting tool that displays your campaigns’ clicks, spend, sales, advertising cost of sales (ACoS), detail page views, average cost-per-click (ACPC), etc.

Amazon Video Ads

Amazon Video Ads can be placed on Amazon-owned sites like Amazon.com and IMDb, Amazon devices like Fire TV and various properties across the web. To buy Amazon video ads, you don’t have to sell products on Amazon.

Amazon Stores & Amazon Native Ads

Amazon Stores. Users can promote their product or brand on their own multi-page Amazon Store. Creating an Amazon Store is free. Brands get an Amazon URL and can view traffic analytics. You can showcase your brand’s products or portfolio of work.

Amazon Native Ads can be placed on your brand’s own website. These include recommendation ads, search ads and custom ads.

Choosing ad types is part of Amazon Advertising strategy

Choosing ad types is part of a bigger Amazon Advertising strategy. In general, marketplace sellers need a strategy created in a conscious and data-driven way in line with the latest ecommerce trends.

According to Patrick Smarzynski, Amazon Advertising should be about a strategic and flexible plan that will bring sellers the best possible ROI. The fast-changing advertising reality on Amazon makes it necessary for sellers to stay adaptable.

I recommend flexibility, adaptability and willingness to test what works and what doesn’t. Testing different ad types is part of this, e.g. sponsored products, products promoted in cart or at checkout, featured vendor profiles on the main page and so on.

Patrick Smarzynski, Co-Founder at Webinterpret

It’s important to minimize cost per click and maximize conversions. Finding less competitive markets and identifying international sales opportunities are among the most effective ways of staying ahead of the ever fiercer competition on Amazon.