Before jumping into campaign creation, let’s first get you comfortable with common Sponsored Products terminology. After that, we’ll dive into objectives for your campaigns (and why they’re important). Then, we’ll end this section with a quick breakdown of the advertising ‘flywheel effect' and how Sponsored Products can increase performance across your entire Seller Central account.
Sponsored Products Fundamentals
Amazon is a unique ecosystem with a language all its own and there can be a lot to learn. Take some time to brush up on common Amazon and Teikametrics terminology you will encounter in this guide.
Amazon Sponsored Products Terminology
Campaigns: As the top of the hierarchy, campaigns are a method for organizing and targeting your product ads. There are two types of campaigns: ‘automatic’ and ‘manual’
Ad Groups: The subgroups of a campaign which allow you to categorize product variations
Ads: Each product you are advertising is considered an ad
Keyword: The words or phrases you add to a manual campaign to indicate relevancy to Amazon. Keywords come in three varieties:
- Broad: This type of keyword allows you to cast a wide net for searches. Example: “blue rain jacket” as a broad match keyword makes you eligible for any search that includes any one of those words, like “red jacket” or “raincoat”
- Phrase: This type of keyword allows you to show up for searches that are variations on a phrase. Example: “blue rain jacket” as a phrase match keyword makes you eligible for searches that have a word or two at the beginning or end of this phrase, like “girls blue rain jacket” and “blue rain jacket small"
- Exact: This type of keyword allows you to target a specific search and shoppers must type in the exact string in the search box. Example: “blue rain jacket” as an exact keyword means that a shopper must type in “blue rain jacket" in the search box for your ad to place
Search term: The string of text a shopper types into the search box
ACoS: Advertising-cost-of-sale. This metric shows you what portion of your ad revenue is spent on advertising. Calculated by dividing your ad spend by your ad revenue
CPC: Cost-per-click. The amount you pay for each click
Campaign objectives: Your business goal for a particular campaign
ACoS Targets: A method to control your bids within the software
Bid automation: A schedule of daily bid changes to control your campaigns
Search term sync: A weekly sync of new search term data from Seller Central
Just as your product goes through different phases, so do your campaigns:
Launch: Generally used for new products, with the goal of increasing exposure. Traditionally a time of high spend and initial marketing investment, you should place your ads in front of as many shoppers as possible to build awareness, generate reviews and drive traffic.
Growth: Once you have driven sufficient traffic to your page and started to convert them to sales, your product has likely shifted from launch to growth. This means your focus will shift to generating sales volume and improving sales rank. While ACoS may start decreasing, your focus will likely be on topline revenue
Profitability: Once you have achieved the sales volume/sales rank desired for your product (or your increased spending isn’t improving results) you will want to target for profitability. This means adjusting your ACoS targets to reflect a sustainable margin or profit.
Liquidation: If a product is underperforming on sales, often times sellers will decide to increase their advertising spending on the product in order to reduce FBA costs and sell through inventory. This may mean you will take a loss on sales or sell at cost, but it will also open up capital to invest in more profitable opportunities.
Sponsored Products ads do not exist in a vacuum and running effective ads can have an impact on your overall business--this is called the flywheel effect.
When you run ads, you can improve exposure and conversion, which can in turn contribute to improved sales volume, sales rank, and organic search placement.
It is important to analyze the trends and performance of advertising campaigns in context of your overall business. For instance, a new product without sales history and reviews may place on page 3 of search results. By running ads, you have the option of showing up on page 1 or 2, which allows more people to see your product. Once they see it, click on it and start buying it, you now have sales volume--which means your page 3 result can start placing on page 2 (and maybe even page 1!), all thanks to running an ad.
Next: Campaign Configuration Checklist