What Is Amazon Advertising?

March 17, 2018
Jennifer Storch

What is Amazon advertising? How do you advertise on Amazon? Your questions answered here. #amazonadvertising #digitalmarketing #ecommerce Click To Tweet

Amazon.com, known most commonly as, simply, Amazon, routinely sets unprecedented heights for the e-commerce industry. An estimated 54 percent of online shoppers go directly to Amazon to purchase products. Amazon began as a humble online bookstore. Today, it’s the single largest e-commerce website in the world, a veritable source of potential customers for advertisers. How can you get a piece of Amazon’s large audience? Two words: Amazon advertising.

Amazon Advertising in a Nutshell

Although Amazon is mainly an e-commerce site where merchants sell, Amazon also allows advertisers to serve ads to its website. The ads appear within product searches, as banner ads, or as suggested products.

When advertising on Amazon, you only pay for your ad after a customer clicks on your product. Views are free. Once shoppers click to see more, you’re officially charged for your ads. This system enables thousands of people to see your product while you only pay for those who directly express an interest. How much you pay, however, is up to you. Amazon ads are auction-based, which means you decide the maximum amount you’re willing to pay for each click. The more you’re willing to pay, the more likely Amazon will display your ads.

What Are the Benefits of Amazon Advertising?

As an advertising platform, Amazon delivers the holy grail of marketing: massive traffic. Business owners who advertise on Amazon enjoy direct access to an immense number of people. If you’re on Amazon, your product displays for a lot of eyes to see. This online window shopping lead to clicks, and these clicks lead to sales.

Not only does Amazon deliver massive traffic to your websites and views to your products, but it also delivers customers who are more likely to convert. Customers on Amazon have high purchase intent: they visit Amazon with a product in mind that they want to buy. Because they have high purchase intent, because they are already at the bottom of the marketing funnel, it is easier to convince them to buy. Here are the other benefits of Amazon advertising.

You can sell more during the holiday season: Customers buy billions of items on Amazon during the holiday season.
You have access to millions of customers: 144 million customers find, discover, and purchase new products across all devices on Amazon.

How Does Amazon Advertising Work?

Everything from gardening tools to groceries, clothes to computers, even cars and houses are available for sale on Amazon. What does this mean for your ads? Your ads can appear in a large variety of placements among these products, including the context of complementary or competitive products and a buyer’s purchasing history.

When buyers search for a product, your product can appear alongside your competitor’s, enticing them to purchase your product instead. This marketing strategy instantaneously reminds customers of other options on the table. If shoppers search for a product similar to yours, your ad appears to remind them that your product might complement their purchase. For example, Joe Smith shops for a digital camera, and your SD card displays on his screen automatically.

This complementary product matching can give customers more options by introducing your product. Cross-selling is typically the work of a sales rep in a brick-and-mortar store. On Amazon, your ads automatically appear to shoppers when relevant. The customers simply decide if they want to buy.

Types of Amazon Ads

Amazon offers a variety of ads to fit your marketing strategy. Here are a few things to keep in mind about Amazon ads.

  • All advertisement packages are cost per click and based on an auction model.
  • You choose the highest price you’re willing to pay for each click.
  • The higher the price, the more likely your ad will appear.

Sponsored Products: These ads appear around or within search results and on product detail pages. Because these ads are keyword targeted, you can choose the keywords yourself or let Amazon automatically target your ad with suggested search terms.

Headline Search Ads: These ads also appear within search results, an area of high visibility, perfect for promoting brand awareness.With this type of ad, you can create a custom headline and logo and target keywords. When customers click on your ad copy, the ad will direct them to a customized page that showcases a collection of your products.

Product Display Ads: These ads appear in merchandising emails and on product detail pages towards the end of the shopping experience when the customers review their order. With this type of ad, you can target customers based on their interest in certain products and categories. You can choose which products these ads will appear alongside of, including your own products for up- or cross-selling and a competitor’s products to offer an alternative.

The algorithms that determine ad placement rely on more than just the customers’ current shopping experience. Amazon tracks buyers’ history to offer additional products they may be interested in. The customers receive options based on specific previous preferences.

This individualized advertising experience sets Amazon apart from other social media advertising platforms. Amazon, as the middleman, expertly arranges your products in front of the people are oh-so-willing to buy.

What Do You Need to Advertise on Amazon?

To advertise on Amazon, you first need to set up a seller or vendor account. You can sell as a professional or as an individual, depending on the number of items you plan to sell each month. Your products will appear on countless desktops, phones, and tablets all around the world. Here are the ways you can sell on Amazon.

  • If you’re a novelist or an app creator, Amazon can strategically release your brand new product into the digital universe. Check out Amazon Marketing Services and Web Services.
  • Amazon Advantage is a consignment program. Amazon will operate all of your product sales for a 55-percent fee. You can source your product to Amazon, and it does all the rest. Amazon will order your product from you and then pay you when it’s shipped to Amazon customers.
  • Amazon Stores offers you a complete on-site Amazon web page to highlight your products and brand. You design the page, tailor-made to your own unique style and seamlessly integrated with the entire Amazon platform.
  • The Amazon Associate Program is a bit of the reverse. You advertise Amazon products on your separate business website. When your viewers click on the Amazon products, you receive payment for the clicks. You’re generating traffic from your website for Amazon products.

No matter how big your business gets, with Amazon, you’ll always have the manpower to keep growing. You ship your products to an Amazon warehouse (no need for your own storage space), and they’ll distribute it for you. Amazon also takes care of your customer service in case of shipping errors or returns.

What if you don’t sell products that fit into Amazon’s categories? No problem. Off-platform advertising is available for products and services that aren’t sold on Amazon. Amazon’s audience will still see your ads, and clicks will be immediately directed to your off-platform business website. With off-platform advertising, your ads will pop up in the right places and grow your business with the benefits of Amazon’s marketing expertise.

Proven Success: The Burt’s Bees Story

Burt’s Bees is a prime example of the transformative power of Amazon advertising. As an established brand, Burt’s Bees sought to enhance its customer base by improving its online marketability.

It was instrumental that Burt’s Bees marketed directly to customers who had an existing interest in their niche product line. By using Amazon’s advanced marketing techniques, Burt’s Bees discovered that 68 percent of their current e-store customer base was shopping on Amazon.

By identifying the shopping habits of current customers, Burt’s Bees extrapolated those habits to target other Amazon shoppers with similar purchasing histories. When Burt’s Bees began marketing to Amazon shoppers based on the preferences of their current customers, they quadrupled their ROI.

The advanced capabilities of Amazon leads to constant research and development in the marketing industry. When advertising with Amazon, you know you’re in good hands (and the biggest according to their market share of e-commerce).

Regardless of the size and structure of your business, you can propel your advertising strategy by aligning with the irrefutable progress of Amazon. As Amazon continues to revolutionize the retail industry, your business can flourish in the fast-paced development of new marketing techniques.

In the new age of advertising, stay in the spotlight with Amazon advertising.

Jennifer Storch is a freelance writer and editor-in-chief of Free Lances, Ltd.

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