To succeed as a third-party seller on Amazon, simply listing products on the marketplace is not nearly enough. Brands and retailers must also make the most of Amazon Advertising. This digital marketing program offers a wealth of opportunities to get the right products in front of highly targeted shoppers, but it can be overwhelming — especially when you’re just getting started. Use this Amazon Advertising glossary to strengthen your understanding of the program and its many options.

What is Amazon Advertising

Amazon Advertising is a highly specialized digital marketing program available to third-party sellers that want to make their listings stand out. It offers a variety of ad solutions designed to help brands and retailers find, attract and engage millions of shoppers at every stage of the buyer’s journey. Once considered a “nice-to-have” option for sellers with extra time and resources, Amazon Advertising has become a “must-have” for boosting visibility and increasing sales.

Who is Amazon Advertising for?

Amazon Advertising is available to brands and retailers with active Vendor Central or Seller Central accounts. Put simply: If an e-commerce company has listings on Amazon, it’s eligible for Amazon Advertising.

What types of ad formats are available?

Generally speaking, there are three primary types of Amazon Advertising.

Sponsored Products: Amazon Sponsored Products is a keyword-targeted, cost per click (CPC) advertising program designed to promote individual listings and drive traffic to product detail pages. Because they’re shown to shoppers who are actively searching for terms associated with a particular product, these ads tend to generate high-quality clicks and can yield a much higher ROI than many other pay-per-click (PPC) programs.

Sponsored Brands: These keyword-based, banner-style ads appear above Amazon search results to help build brand recognition and drive shoppers to a complete product portfolio. They feature the brand’s logo, a customized headline and up to three products. Sponsored Brands can be an effective way to reach consumers who are browsing but don’t yet know what they want to buy. Like Sponsored Products, Sponsored Brands operate on a CPC pricing model.

Product Display Ads: Product Display Ads are CPC ads that can show up in different areas — on websites, apps and devices, both on and off Amazon — to drive traffic to a product’s detail page. These ads are relevant to buyers looking for specific product pages, as opposed to those scrolling search results on Amazon. They deliver highly relevant ads to consumers with certain interests, or to shoppers who are actively viewing specific products.

Once a company gets comfortable with the three basic ad options above, additional formats to explore include:

Amazon Coupons: Amazon Coupons is a self-service tool that lets sellers create compelling promotions in the form of digital coupons that show up in search results. Coupons can be used to offer discounts as either a percentage or set dollar amount, and can be targeted to select customer segments.

Amazon Stores: Vendors and third-party sellers enrolled in Amazon’s Brand Registry program have the ability to create a free, multi-page Amazon Store. This format can be used to get products in front of more people and tell compelling stories about the brand behind them.

What are the essentials of a well-run Amazon Advertising account?

The most productive Amazon Advertising accounts tend to center around several key elements.

Clear goals: Companies that successfully use Amazon Advertising are able to articulate exactly what they want to get out of the program. For example, instead of focusing too broadly on “more sales,” the business might specify a precise amount of impressions or revenue increases to achieve within a particular time frame.

Granular strategies: This process involves identifying product differentiators that can be used when targeting Amazon Advertising keywords. Examples include targeting competitor products with lower reviews and devoting a larger portion of ad spend to products with high margins.

Diversity of ad formats: Amazon Advertising benefits brands and retailers that leverage a range of options. Each individual ad type is designed to reach consumers at different stages of buying, which means a mix of Sponsored Products, Sponsored Brands and Product Display Ads is often necessary to ensure ROI.

What do advanced Amazon Advertising strategies look like?

For great returns, many sellers experiment and test various bidding, reporting and targeting features. Key features include:

Product Targeting: Amazon allows its advertisers to target not only by category, but also by ASINs (Amazon Standard Identification Number). Advanced strategies include mining the Amazon search term report to identify company and competitor ASINs to target.

Dynamic Bidding: Dynamic bidding uses Amazon’s algorithm to adjust a keyword bid based on the likelihood of an ad converting to a sale. “Down only” dynamic bidding can be used to reduce the CPC when there is less likelihood of a conversion. “Up and down” dynamic bidding uses the Amazon algorithm to determine if an ad has a higher or lower chance of converting to a sale before making CPC adjustments accordingly.

New-to-Brand Metrics: Amazon’s new-to-brand metrics allow advertisers to see what percentage of ad campaigns are driving new customers versus repeat purchases. These metrics can then be used to adjust advertising strategies to further increase new consumer acquisition and drive even greater brand loyalty.

What kinds of results should companies expect with Amazon Advertising?

When approached with the right knowledge and strategies, Amazon Advertising can have a significant impact on important business outcomes including awareness, sales and revenue. For example, one manufacturing brand was able to boost sales by $100,000 with a highly strategic keyword campaign that leveraged Amazon Sponsored Products.