THE AMAZON FBA SELLER’S GUIDE TO

SPONSORED
PRODUCTS
The Amazon FBA Seller’s Guide to Sponsored Products

Did you know that the

population of Fulfillment by
Amazon (FBA) sellers grew
by 50% in 2015? And by a
remarkable 65% in 2014?

That means more and more competitors are

entering the Amazon Marketplace every day, so it’s
absolutely critical for you to stay ahead of the game.

Any advantage you can have over your opponents will make a huge
difference. And when the competition is this fierce, wouldn’t you
appreciate a head start? Using Amazon Sponsored Products can
put FBA sellers way out in front of the starting line.

Get ready to leave your

competitors in the dust.

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The Amazon FBA Seller’s Guide to Sponsored Products

WHAT IS
AMAZON
SPONSORED
PRODUCTS?
Amazon Sponsored Products is a pay-per-click (PPC) advertising solution that exists within the

Amazon Marketplace and enables Professional Sellers to promote their products with targeted

ads. Sellers can target customers based on keywords they choose or allow Amazon to dictate

which searches will trigger their ad.

When a consumer searches for a term relevant to a product the seller is promoting through
Amazon Sponsored Products, the seller’s ad is eligible to appear either in the search engine
results page (SERP) or on a related product detail page. If the shopper clicks the ad, they are
directed to the product detail page for the seller’s item, and the seller is charged a fee. A seller
only pays when their ad is clicked—hence, pay-per-click.

How ads are displayed is determined by an auction-based

pricing model, similar to Google AdWords. When a
consumer searches on Amazon, the Amazon algorithm
finds all Sponsored Product ads that contain keywords
that match those in the query. From this group, any
products not currently winning the Buy Box are
removed. After that, the ads are analyzed for relevance,
and irrelevant ads are eliminated. The remaining ads
are displayed to shoppers in the Ad Rank order, which
is based on the seller’s bid and the likelihood of the ad
being clicked.

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The Amazon FBA Seller’s Guide to Sponsored Products

You need to meet these four requirements to participate in Amazon Sponsored Products:

1 You must have an active Amazon Professional Seller account.

2 Your products must be Buy Box-eligible.

Note: Adult products, used products and products in closed categories
are not eligible.

3 You must be able to ship to all U.S. addresses.

4 Your products must be in one of the available categories (listed below).

IMPORTANT: Amazon Sponsored Products is not the same as Amazon Product Ads, which
Amazon retired in August 2015.

PRODUCT CATEGORIES AVAILABLE

FOR AMAZON SPONSORED PRODUCTS:

• Appliances • Electronics—Mobile • Outdoors

• Arts, Crafts & Sewing • Fine Art • Patio, Lawn & Garden

• Automotive • Grocery & Gourmet Food • Pet Supplies

• Baby • Handmade • Shoes

• Beauty • Health & Personal Care • Software

• Camera • Home & Kitchen • Sports

• Cell Phones & • Industrial & Scientific • Tools & Home

Accessories Improvement
• Luggage
• Clothing & Accessories • Toys & Games
• Movies & TV
• Collectibles • Video Games
• Music
• Computers • Watches
• Musical Instruments
• Electronics—Audio/Video
• Office Products

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The Amazon FBA Seller’s Guide to Sponsored Products

HOW DO I
GET STARTED
WITH AMAZON
SPONSORED
PRODUCTS?
The Amazon Seller Campaign Manager is accessible via the Advertising tab in Seller Central. To

create an Amazon Sponsored Products campaign, follow these six steps:

1 SET YOUR DAILY CAMPAIGN BUDGET.

• Your daily campaign budget should be based on your advertising goals, your
overall marketing budget and how competitive you are willing to be.

2 SELECT YOUR CAMPAIGN’S RUN DATES.

• If you plan to run the campaign indefinitely, you don’t need to designate an
end date.

• If your campaign is for a temporary promotion or seasonal—for example, back to

school, or holiday-specific—pick the date on which you would like the ads for this
particular campaign to stop.

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The Amazon FBA Seller’s Guide to Sponsored Products

3 CHOOSE YOUR CAMPAIGN TARGETING TYPE.

• There are two different targeting types: automatic and manual.
• Automatic campaigns give Amazon more control over your ads, and manual
campaigns give you more control over your ads. Targeting is discussed in more
detail below.

• IMPORTANT: Once a campaign has been created, the targeting setting cannot
be changed.

4 PICK WHICH PRODUCTS TO INCLUDE IN YOUR CAMPAIGN.

• A handful of approaches allow you to decide which items you want in a campaign,
but we recommend dividing your campaigns by product category. This is also
further explained below.

5 CREATE YOUR AD GROUPS—COLLECTIONS OF SIMILAR

PRODUCTS, ORGANIZED BY THEME.
• When naming your ad groups, be descriptive. This will make bid management and
optimization easier.

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SET YOUR DEFAULT BID—HOW MUCH YOU’RE WILLING TO
PAY WHEN A CONSUMER CLICKS YOUR AD.
• Use higher bids on more competitive keywords.

Select your products Your ads are eligible Shoppers who click You only pay when
and enter keywords to appear alongside are taken to the detail your ad is clicked
search engine results page where your offer
is listed

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The Amazon FBA Seller’s Guide to Sponsored Products

Campaign Structure
Your campaigns should be structured on a hierarchy, starting with one broad product category,
which should then be divided into smaller sub-categories (ad groups). Then, add the products
and keywords (if you’re using automatic campaign targeting).

CAMPAIGN

Home Decor - Lighting

AD GROUPS AD GROUPS AD GROUPS

Reading Lamps Lamp Shades Outdoor Lighting

PRODUCTS PRODUCTS PRODUCTS

Dagenhard™ Slim Niekowal® Medium Bell Evans® Solar

Desk Lamp Lamp Shade Pathway Lights

Embrey™ LED RUKS™ Large Drum Clark® Garden

Table Lamp Lamp Shade Outdoor Lanterns

KEYWORDS KEYWORDS KEYWORDS

Desk Lamp Bell Lamp Shade Pathway Lights

Table Lamp Drum Lamp Shade Outdoor Lanterns

Organizing your campaigns in this way makes it easier to detect performance patterns and
execute appropriate bid and status adjustments.

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The Amazon FBA Seller’s Guide to Sponsored Products

HOW DO I
CHOOSE MY
AUDIENCE?
There are two different types of targeting settings available for Amazon Sponsored Products

campaigns: manual and automatic.

Manual Campaign Targeting

• Ads are targeted based on the keywords you choose
• You can select up to 1,000 keywords for each ad group

• You can use Amazon’s recommended keywords, select

your own or use a combination of both

• Default bids can be set at either the ad group level or the keyword level

• The goal is to serve ads to a very specific audience

PROS: Targeting is more precise, and you’ll have more control over when your ads are served.
ROI also tends to be higher in manual campaigns than in automatic campaigns.

CONS: Manual campaigns usually have a larger time commitment than automatic campaigns
because you must regularly check keyword performance and optimize as necessary. The costs-
per-click (CPCs) are also traditionally higher since you must bid higher to be competitive.

PRO TIP: Bidding on broader keywords can increase impressions, but if your ad isn’t relevant
enough to the search, clicks will be low, or the ad may not show at all. Try to bid on keywords
that are closely related to the products in each ad group.

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The Amazon FBA Seller’s Guide to Sponsored Products

Automatic Campaign Targeting

• No keywords: Ads are served for all relevant customer searches based on
product information

• Default bids can only be set at the ad group level

• The goal is to cast a wide net and serve ads to as large an audience as possible

PROS: Automatic campaigns require less maintenance than manual campaigns and generally
have lower CPCs. They also give a higher percentage of your product ads the chance to
be served.

CONS: Since the audience is broader and less focused, click volume tends to be higher but
attributed sales tend to be lower, resulting in a lower ROI than manual campaigns.

Our recommendation is to start with an automatic campaign. While you may have a good idea
of how shoppers search for your products, there also could be dozens (or possibly hundreds)
of keywords that would be perfect for your campaigns. And if you believe certain products
will perform well, you’ll likely focus time, effort and budget on those when there may be other
products that will do much better but don’t get the chance. Using the data from automatic
campaigns, you can make informed, objective decisions.

In the Amazon Sponsored Products interface, you can download the Automatic Targeting
Report, which shows the actual customer search terms that triggered your ads over the past
60 days. This information takes the guesswork out of campaign buildouts and provides a data-
driven jumping-off point for all future Sponsored Products campaigns.

Once you have acquired sufficient data, move

forward with creating a manual campaign
targeting the highest performing keywords
from the automatic campaign or campaigns.

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The Amazon FBA Seller’s Guide to Sponsored Products

HOW DO I
SEE IF MY
CAMPAIGNS
ARE WORKING?
Within the Sponsored Products interface, sellers can see the following metrics:

• Impressions, which are the number of times an ad was served

• Clicks
• Click-through-rate (CTR), which is the number of clicks
divided by the number of impressions
• Ad spend
• Attributed sales
• Advertising Cost of Sale (ACoS), which is the total ad spend
divided by the attributed sales

This data allows you to identify the poor-performing and well-performing elements of your
campaigns so you can make the necessary changes.

ACoS is probably the most important metric because it gives you a better idea of the return
on your advertising spend. The lower your ACoS percentage, the better. Since there are other
associated costs—for instance, shipping, storage and Amazon fees—be sure to also consider
your gross profit margin. If your gross profit margin is greater than your ACoS, you know your
Sponsored Products campaigns are working.

BONUS TIP: It’s not necessarily a bad thing to see a disproportionately larger number of
impressions than clicks. Amazon only charges you when the ad is clicked, after all. A high
number of impressions means a larger audience is seeing your ad, which can be great for
product and brand awareness, especially if you’re just starting out.

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The Amazon FBA Seller’s Guide to Sponsored Products

WHY SHOULD
I USE AMAZON
SPONSORED
PRODUCTS?
Now you know the ins and outs of Amazon Sponsored Products—what it is and how it works. But

why should you enroll? There are quite a few reasons. You can:

• Boost brand awareness and visibility of new products

• Gain more control over product merchandising
• Grow the number of Buy Box conversions
• Highlight seasonal items, special promotions or products on clearance
• Increase the volume of seller feedback
• Leapfrog organic listings
• Remove stale inventory
• Target qualified, high-intent traffic

IT’S TIME TO HURDLE

YOUR COMPETITORS.
Teikametrics can expertly manage
your Amazon Sponsored Products
campaigns so you can focus on
running your business.

Request your free

consultation today.

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