We always start with the top search results when looking for the greatest product on the Amazon marketplace. It's common knowledge that sponsored products always appear first, leading us to incorrectly assume they are popular or highly rated. 

But what does “sponsored” actually mean on Amazon?

How reliable are sponsored products? Who is paying for them to show up in your Amazon search results, and why? If you're unfamiliar with Amazon's advertising system, this simple guide should assist.

Just what does "Sponsored by Amazon" entail? PPC (Pay-Per-Click) on Amazon 

Sponsored product advertising on Amazon is the paid promotion that comes up at the top of the Amazon search results page. Products labeled as "sponsored" are promoted not by Amazon, but by the seller.

Amazon's advertising system is based on a cost-per-click model, which implies that sellers must pay each time one of their ads is clicked. Here is how pay-per-click (PPC) advertising initiatives function.

Methods of Bidding on Amazon

Sellers must bid on keywords in order to get their product listings or brands promoted on Amazon. The bid of the next highest bidder will determine the cost per click. 

Therefore, even if a seller bids $4.0 per click and wins, the price advertisers must pay is $3.50 per click if the next highest bidder bids $3.50.

Automatic and Manual Campaigns

PPC campaigns for sellers can be adjusted to automatic or manual. In an automated campaign, sellers just provide Amazon with a budget and let the platform's algorithm determine which keywords will yield the best results. Despite the reduced complexity and setup time, this option often ends up costing more in the long run.

On the other hand, the seller is in charge of manual campaigns. The seller does keyword analysis to determine the viability of potential PPC campaign keywords and the available advertising budget.

Manual campaigns require more work from the campaign manager but might be more successful because of the extra attention to detail. Since automatic campaigns are geared toward increasing your ad's clickthrough rate, a manually targeted campaign might be useful for other goals, such as raising brand awareness.

3 Types of Amazon PPC Ads

Not all of the advertisements you see on Amazon will be for Amazon-sponsored products. There are currently three distinct types of sponsored ads on Amazon.

1-Amazon Sponsored Products Ads

Sponsored product ads on Amazon can promote anything from new products to regular advertisements. Only one or two spots per term are allotted, but you can find them at the top of your Amazon search results page. If you click the ad, you'll be sent straight to the item page.

2-Amazon Sponsored Brand Ads

Sponsored brands on Amazon function similarly to product ads, except that the advertised brand really carries the sought-after products. Brands that pay to be at the top of the search results will have their products shown in a strip to the side.

Especially in more specialized marketplaces where buyers are searching for trustworthy sellers, having sponsored brands run is an excellent way to get your brand out there.

3-Amazon Sponsored Display Ads

Sponsored advertisements on Amazon's display system are the newest type of ad on the platform and, conceivably, have the largest audience. Display advertisements can be shown on the Amazon product detail page and on the websites of other Amazon companies and their affiliates.

Amazon Keyword Match Types: How Advertisements Reach You

You may be asking how exactly Amazon PPC campaigns are delivering results for you in a marketplace where there are 2.3 million sellers. Keyword match types are the obvious solution.

How closely your queries match an ad's keyword is quantified by several types of keyword matches. Amazon advertisers choose from a variety of keyword match types to guarantee that their campaigns reach the right people, whether they're aiming for a specialized market or a broad audience.

There are now four different kinds of keyword matches:

1-Broad Match

When two entities have a lot in common, they can both reach a large audience and rank highly. This form of keyword matching typically employs short-tail keywords because of the high potential for variation and traffic generation offered by such phrases.

In search, the following are made possible via broad matches:

  1. Exact matches
  2. Variations
  3. Alternatives to the desired keyword
  4. Not using keywords in a search

Due to the large number of potential viewers, broad match marketing tends to be costly to run. Broad matches typically have a high CPC, CPA, and impression volume but a low conversion rate.

2-Phrase Match

More relevance is expected from a phrase match than from a broad or modified broad match. With phrase matching, the following can appear alongside the desired keyword in search results:

  1. The target keyword's close variations
  2. Paraphrases
  3. Flawed grammar and spelling
  4. Alternatives to the desired keyword

Ads won't show up for irrelevant searches since phrase matching is more specific than broad and modified matching.

While phrase matches may receive fewer total impressions, they often generate more clicks. The reasoning behind this is that there will be a greater number of ready-to-buy clients for phrase-matched ads.

The low CPC and CPA of phrase match campaigns are a direct result of their higher conversion rates.

3-Exact Matches

When it comes to keyword matching, exact matches are the most demanding. Only the intended keyword or a very similar variant is required for an exact match. If not, the two won't be compatible. Ads for the following search terms are not displayed as part of exact match campaigns:

  • Substitutes for the intended keyword
  • Added Search Terms
  • Misspelled words
  • Synonyms

In spite of (or perhaps because of) these limitations, precise matches yield the most robust PPC data. The CTR, CPC, and CPA of campaigns based on precise matches are all greater than those based on similar terms.

The only real negative is the naturally tiny number of impressions generated by exact matches. Better quality advertising is generated by phrase and exact match campaigns, resulting in reduced ad costs for sellers.

Should I Purchase Amazon's Sponsored Products?

Whatever you decide to do, do it. 

Given that the word "sponsored" can sound like a ridiculous advertising ploy, it's a fair thing to ask. Amazon, on the other hand, lets sellers promote their products and brands regardless of quality.

You can rest assured that Amazon keeps a close eye on all of its products to make sure its consumers never lose money.

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Perhaps you are considering sponsoring your own products and didn't just read this post out of curiosity. Then you've found the appropriate article. ecomfist's services include Amazon PPC management. Make an appointment with one of our Amazon gurus today! Let's have a chat right now!