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Advertising on Amazon: Understanding the Basics

What started as a simple online bookstore in 1994 has quickly become one of the world’s most powerful online shopping platforms. In 2017, Amazon Prime only had 80 million users. In 2021, Amazon Prime has over 200 million and is still growing. With so many people using Amazon for all their basic shopping needs, it makes one of the best new places for marketers to showcase their products. 

How Does Advertising On Amazon Work?

What makes Amazon an appealing advertising platform is based primarily on how people use it. Google knows how people are searching, and Facebook does an excellent job of capturing interests. However, Amazon knows how people shop for products. Amazon is the ideal platform for any business that’s heavily involved in ecommerce.

Amazon ads are similar to Google and Bing search ads in that they only show when you search a specific keyword. For instance, anytime someone searches for “water bottles,” the top of the Amazon product page will have a handful of products relating to thermoses, packs of water bottles, Camelbaks, and more. Advertisers target the “water bottle” keyword to have their product shown at the top of the product page for that query. 

Is Advertising On Amazon Right For My Business?

If you are involved in the ecommerce market, selling and advertising on Amazon is the right move for your business. For one, advertising on Amazon is relatively cheap. You only pay Amazon when someone clicks on your advertisement. Clicks can range from  $0.10 to $1.30 depending on the level of competition for that product’s keyword. 

Another good reason to advertise on Amazon is if you are already selling products on the platform. If you are already selling products on Amazon organically (not paying for ads), starting an Amazon ad campaign can significantly benefit you. According to Amazon, the most significant ranking factor for how their products are shown in the search results is their sales history. Products with a strong sales history are delivered more often and typically in a higher position than their competitors’ products. By advertising products you are already selling on Amazon, you can help to boost their sales history and increase their organic rankings on the Amazon products page.

How To Best Use Amazon Ads

On Amazon, there are a few different ad types to choose from. There are Sponsored Product ads that function similar to Google Shopping ads. These ads are keyword centered and appear in a carousel across the top of the products page. With these ads, you choose which keywords you want to show up for and choose from broad, phrase, or exact match keyword types to optimize your ads. 

Another type of ad is Headline Search ads. These ads take up more room than the Sponsored Product ads and appear at the top of the page, above the product results page. These ads are great because they display your product by itself and above the competitor’s products. 

Lastly, Amazon Display ads are also available to users. These ads work similarly to Google Display in that they are interest-focused. For instance, if someone searches for soccer balls, they may see an advertisement for soccer cleats, cones, or more next to or below the soccer ball products. These do an excellent job of getting people to click on and interact with products similar to what they’re already looking for. 

The Takeaway

The primary takeaway is that if you are already involved in ecommerce or already sell on Amazon, setting up Amazon Ads can be beneficial and cost-effective. You can reach more active users for an affordable cost while also boosting the organic standing of the products you already sell on Amazon. This is an excellent platform for any company, big or small, as you will have an equal chance to show your ads among your competitors.

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