Amazon is taking a big step in digital ad sales with its plan to increase the available space for its Sponsored Products ads by placing them around the internet.

Amazon’s Sponsored Ads are Amazon’s main ad format where they run campaigns that are associated with terms that consumers search for. This is very efficient as it reveals to Amazon what customers want to buy and also provides a direct link to buy said product, increasing conversion rates to over triple that of Google’s ads.

This is a huge move from Amazon, as Sponsored Ads already make up for 88% of Amazon’s ad revenue, and with this move, Amazon seeks to join the ranks of Google and Facebook in ad sales. Already they have gained $2 Billion in ad revenue which is expected to grow to $3.7 Billion by the end of the year. Amazon’s sponsored product ads seem to rank favorably against Google and Facebook’s advertising as they provide direct links for conversion. Already Amazon is starting to eclipse Oath and is expected to become 3rd in ad sales by 2020.

How can brands benefit from this?

In short, more visibility! The ad unit will retarget users when they are on sites other than Amazon; they’ll then click back to Amazon which will lead to a shoppable format. It will retarget users that were previously on Amazon.

How do the Sponsored Ads Retarget?

Pay-per-click, the auction system, sales attribution and billing will remain the same. On and off-Amazon retargeting will also use the same CPC bid.

For manual campaigns, the beta is not yet available. Within the beta, campaign control and reporting functionalities are still limited; you will not be able to select the external sites you wish for your SP ads to be displayed on. Based on Amazon’s automatic retargeting, your ads will be displayed to customers who have expressed interest in your product, or products similar to yours.

One thing to consider is that you do not have direct control over when you’re SP ads will appear. The lack of ad display control can be risky for advertisers, and will require testing over time to compare the performance of on-Amazon and off-Amazon advertising sales.

While Amazon Sponsored Product Ads are a major chunk of Amazon’s ad spends, it mainly focuses on consumers who are already in the decision making part of the marketing funnel. If SP isn’t right  for your brand, Amazon offers many different types of ad services for different parts of the funnel that are extremely effective when utilized correctly.

Headline Search ads is another method of advertising on Amazon. As opposed to being integrated into search results, Headline Search Ads feature above the fold (ATF) hero banners that are also targeted. These banners feature a brand logo, custom headline, and up to three product listings. Advertisers also get to choose the landing page, unlike the other ad formats. Headline Search ads are best for brand awareness, as they give a good overview to consumers of what your brand has to offer.

Lastly, there are Product Display ads that appear under the “Add to Cart” button on a product’s page. These ads are unique as you can target direct competitors and specific products as opposed to keywords. This would mean you could easily advertise complementary products like putting a helmet product display ad on a bike’s selling page. Sellers can also customize copy and images for effective messaging. This ad format is most useful for customers who are in the consideration phase as they comparison shop for the best deal.

There are many types of advertising formats on Amazon, and it’s important to realize which one fits your strategy best! With Direct Agents, our clients find success by tapping into our data-driven omni-channel methodology, focused on paid and earned media, both inbound to Amazon and outbound to their own sites. If you’d like to learn more about our Amazon Solution or have any questions, please reach out to [email protected].