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With more than two million sellers on the marketplace, advertising on Amazon is necessary to stand out, be seen, and make sales. If you haven't tested Amazon Advertising yet, let's jump straight in with our easy-to-follow guide to setting up your first campaign.

What is Amazon Advertising?

Amazon Advertising works in a similar way to Google Ads - paying for your listings to appear with a “sponsored” tag at the top of relevant search results and on similar product pages.

Like Google Ads, Amazon ads work on a pay per click (PPC) basis, where you’re only charged when a shopper clicks on your ad. They’re considered essential to your success on Amazon thanks to increased visibility, sales, and more.

Increased Visibility

Your listings get an instant visibility boost onto the first page of Amazon’s search results - helping you to counteract poor organic ranking.

Improved Sales

Increased visibility helps get your listing seen by more customers searching for products like yours, increasing your clicks and consequent sales.

Controlled Costs

Unlike traditional advertising, Amazon’s PPC ads give you control over your budget and overall spend, enabling you to tweak your campaigns for maximum ROI.

The Flywheel Effect

Increased visibility and sales generate more brand awareness and customer reviews, which increase your seller and organic ranking. This starts a flywheel effect you can take advantage of with minimal effort as it goes.

Setting up Your First Amazon Advertising Campaign

Setting up your first Amazon Advertising campaign can be daunting, but they've made it fairly straightforward. Here are step-by-step instructions to help get you up and running in no time.

1. Choose Your Amazon Advertising Campaign Type

First, you need to choose your campaign type. There are four main types of advertising campaigns on Amazon:

Sponsored Products
Sellers who are winning the buy box also get a chance to win the “sponsored” listing. Amazon Sponsored Products improve the visibility of individual products, returning them on the first page of the search results and on individual product pages. Sponsored Products generate the highest revenue per click and are ideal for generating awareness, increasing demand, and promoting seasonable items.

Sponsored Brand
Amazon Sponsored Brands are ads featuring your logo, a custom headline, and up to three of your products. These are only available to brand registered sellers, and appear on the search results page. They’re great at attracting high-intent customers to your brand.

Brand Stores
A Brand Store is your unique Amazon URL multi-page store on Amazon, where you can showcase your brand, story, and products. These stores are only available to brand registered sellers, and are perfect for high-volume Amazon sellers with a wide range of products.

Other Amazon Advertising products
Above are the main three Amazon advertisements that we’ll cover, but it’s useful to know that Amazon also offers:

• Display ads: Appearing on other Amazon websites, apps, and devices
• Video ads: Displayed on Amazon websites and devices
• Custom ads: Tailor-made advertisements
• Amazon DSP: A demand-side platform for reaching your audience programmatically

Register at advertising.amazon.com/register and from the 'Advertising' tab, select 'Campaign Manager' and select your campaign. For this guide, we’re concentrating on Sponsored Products.

2. Give Your Amazon Advertising Campaign a Name

Your campaign name is only seen by you, so pick something descriptive and easily identifiable. We recommend naming your campaign based on the type of products you’ll be including.

3. Choose a Start and End Date

Select a start and end date for your campaign - this can be in the future. Ideally, you’ll run your first campaign for at least a week without any adjustments, allowing it to take effect and giving you time to gather and understand the results.

4. Set Your Daily Budget

Your daily budget is the maximum amount you are willing to spend on a campaign in one day, and it is averaged out over one month. This will vary based on your company’s goals for return on ad spend (ROAS) and advertising cost of sale (ACOS).

5. Pick Your Targeting

Targeting determines when and where your ads are shown to shoppers. There are two types of targeting:

Automatic targeting

With automatic targeting, Amazon decides the keywords for your advertised product, based on relevant shopper searches. It then splits your budget over different match types, which you can later tailor:

• Close match: Search terms closely relating to your products
• Loose match: Search terms loosely relating to your products
• Substitutes: Shoppers who view the detail pages of similar products to yours
• Compliments: Shoppers who view the detail pages of complementary products to yours

Automatic targeting is the easiest way to begin Amazon advertising, as it involves less management, and generates data for use in future campaigns. However, it is a broad approach which, at times, can lead to imprecise targeting.

Manual targeting
With manual targeting, you choose the keywords, negative keywords, and match type for your advertisement, including:

• Broad match: Search terms containing all of the keywords in any order, including plurals, related searches, and close variations
• Phrase match: Search terms containing the exact phrase or sequence of words
• Exact match: Search terms exactly matching the keyword, including close variations

Note: Amazon has recently released an update to Sponsored Product targeting that allows you to target ASINs, brands, and categories, as well as keywords.

Manual targeting is more precise than automatic advertising, but ideally requires previous experience with keyword advertising.

Top tip: identify the most profitable keywords for your advertising campaign with these top Amazon keyword tools.

6. Pick Your Product

Next, you get to select the products for your first campaign. We recommend starting with one product that’s already performing well. Enter the ASIN or product name into the search bar and click to add.

7. Set Your Default Bid

If you’re new to PPC campaigns, think of them as an auction - a shopper enters a search and Amazon runs an auction to determine which relevant ads appear where. Your default bid is the maximum you are willing to pay when someone clicks on your ad, which is then deducted from your daily budget. Enter your default bid or use Amazon’s suggested figure.

8. Review Your Ad

Before submitting your advertisement, do one final review to check that all of the information is correct, and then you’re ready to launch your campaign.

9. Monitor the Results

Once your campaign has been running for one week, it’s time to monitor the results. Log into the Campaign Manager to download detailed performance data to understand your ROI and, if necessary, guide any tweaks to your campaign.

If you’re a brand registered seller, you can now access Amazon Brand Analytics on Amazon for free!

For all sellers, the main metrics you want to track are:

Click-through rate (CTR)
The percentage of people clicking your ad after seeing it (clicks ÷ impressions X 100). A high click-through rate suggests that the keywords and advertisement itself are working.

Conversion rate
The percentage of people buying your product after clicking your ad (conversions ÷ clicks X 100). A low conversion rate suggests that your ad’s keywords aren’t properly aligned with your product, or that something on your listing is stopping conversions (e.g. slow shipping options.)

Pay per click (PPC)
The average amount you’re paying per click. The ideal PPC depends on your marketing budget, product’s profit margin and keyword competition.

Advertising cost of sales (ACoS)
The percentage of sales spent on advertising (total spend ÷ total sales X 100). Your goal ACoS depends on your budget, margin, and competition. For example, a high-margin product with high-value keywords can have a higher ACoS without affecting your overall profit; whereas a low-margin product with little competition necessitates a lower ACoS.

Return on advertising spend (RoAS)
The monetary return on advertising spend (total sales ÷ total spend).

Ultimately, you’re looking for your ads to generate maximum conversions at the minimum cost, and these figures will help you to determine the right budget and keywords to achieve this.

10. Enhance Your Amazon Advertising Campaign

Running a successful Amazon Advertising campaign is much more than finetuning your keywords, targeting, and bids. It’s about ensuring that your clicks convert to sales with:

Content
Optimize your listing content using descriptive titles, accurate descriptions, and hi-resolution listing photographs. For brand registered sellers, you can also consider adding enhanced brand content, such as more engaging images or text.

Reviews
Increase your customer review rating by delivering outstanding customer service, ensuring that products arrive intact and on time, and dealing with complaints quickly and effectively.

Prime Offer
Attract Prime’s 100 million members and overcome the top reasons for cart abandonment by offering free and fast shipping using FBA or an SFP fulfillment solution.

The contents of this blog are made available for informational purposes only and should not be relied upon for any legal, business, or financial decisions. We do not guarantee, represent, or warrant the accuracy or reliability of any of the contents of this blog because they are based on Flexport’s current beliefs, expectations, and assumptions, about which there can be no assurance due to various anticipated and unanticipated events that may occur. This blog has been prepared to the best of Flexport’s knowledge and research; however, the information presented in this blog herein may not reflect the most current regulatory or industry developments. Neither Flexport nor its advisors or affiliates shall be liable for any losses that arise in any way due to the reliance on the contents contained in this blog.