An Introduction to Advertising With AMS
by David T. Griffith, on September 17, 2018
You are probably familiar with Amazon Marketing Services (AMS) and didn’t even realize it. AMS is an ad platform that serves advertisements based on customer search and browsing activity within the Amazon environment. It’s an incredibly useful tool for introducing new products and driving incremental sales on strong performers. And the great thing about AMS – it’s available to all vendors and sellers.
AMS uses a pay-per-click methodology similar in concept to Google AdWords, though the ads live only in the Amazon web and mobile app environments. You pay for the ads by setting a daily budget per campaign from which the cost of each customer click is subtracted until the daily budget is depleted. The budget resets the next day and process begins again. And what promotes those clicks are keywords. The core of AMS campaigns, keywords drive their sales performance, costs and overall activity.
The cost of each keyword or key-phrase entry is determined by its current popularity, which fluctuates over time as searching and browsing trends change on Amazon. Each campaign contains multiple keyword entries – up to 1,000 – that you set based on your own determination and Amazon recommendations. You can always update a campaign with additional keywords, though as of the time of this writing, there are no options to delete keyword entries from a campaign. Hopefully that option will manifest in the near future. Also worth noting, you can set a campaign to auto-target using Amazon’s algorithms without providing a keyword list.
Each keyword entry has a bid placed on it and can be set to three types of search-matching criteria: broad, phrase and exact. Broad is useful for catching general search traffic, while phrase is a bit more specific in matching the group of words contained in the keyword entry in any order. Exact is the most literal search type in finding only precise matches to the keyword entry in its word order. Exact matching is useful for searches containing slogans or well-known phrases, like “Just Do It.”
Furthermore, you can set negative versions of each matching criteria to exclude your ad from a specific type of search. For example, you might not want a card game ad containing the broad key phrase “card deck” appearing in the results for outdoor furniture, so you would set preventative negative search terms like “deck furniture” and “deck chairs” in your AMS campaign.
Determining how you use your keywords is a learning process based on analytics and successes from previous campaigns. AMS provides excellent live analytical data that shows you how each keyword is performing, including impressions, spend, sales, and Average Cost of Sales (ACoS). You can adjust a keyword’s bid per click as needed to optimize its performance.
For instance, if the spending on a particular keyword is consistently high with little to no sales, it’s wise to reduce that keyword’s budget. If the keyword is set to the lowest possible bid of $0.10 and you are still not receiving any sales, it’s best to pause the keyword entry so you’re not losing money on a non-performer.
Alternatively, a high-performing keyword with strong sales and low ACoS would benefit from increasing the bid. The AMS system will even recommend bids for the highest rates of winning the ad placement against other advertisers bidding on the same keyword. As a general rule, always aim to keep each keyword’s ACoS under 20 percent as you continue to optimize your bids. A lower ACoS means you are achieving a higher return on your ad spend.
Keyword mastery takes time, but it is possible. Stay focused on the performance of your campaign’s keywords, and you will find a rhythm for adjusting bids and adding new search terms.
Three Ad Campaign Formats
Now let's look at the ad campaigns themselves. Each campaign is a culmination of keywords, a landing page and promoted items, though each campaign format functions differently.
First are the Headline Search campaign ads, which appear as banners across the top of a search results page. These ads feature main images of products that are identified by ASIN in the campaign settings along with brief marketing copy, or a call-to-action.
Up to four ASINs can be selected for appearing in a headline search ad: one primary ASIN that will always be visible, and three other ASINs that will appear depending on the page layout and the size of the ad that fits the space. For example, a headline search banner will be much narrower in the mobile app environment, showing only one or two ASINs, than it is on a desktop computer’s web browser showing all four ASINs’ images.
Headline search campaigns are great for awareness-building for new product introduction. You can drive traffic to your Amazon brand store or another landing page of your choice.
Sponsored Product campaign ads appear on search results pages in the first rows. They resemble the other product listings that surface due to organic search, except they are flagged with the word “sponsored” in the lower corner.
The products featured in these ads are pulled from a list of ASINs entered in the campaign settings. Only one product shows at a time in each instance of the ad, and it clicks through to the displayed ASIN’s product detail page. Performance is easily viewed for each ASIN with analytics similar to those used in tracking keyword performance. Here, you have the ability to turn off a non-performing ASIN so only the most successful products are receiving visibility in the product rotation. Likewise, you can focus the ads on showing only new products to build awareness and clicks, as well as potential sales. I recommend a hybrid approach of best sellers and newness so that the ad dollars still show a return on investment as the popular products’ sales balance out the inevitable lower performance of newness.
Overall, Sponsored Product campaigns tend to out-perform the other campaign types in terms of sales, so you’ll want to allocate higher budgets to these ads.
The third campaign format is Product Display. These campaign ads appear and are built similarly to the Sponsored Product ads, but they appear on the product detail pages of other products belonging to a competitor or a related item. They tend to have the lowest performance as they are a last-ditch effort to sway a customer’s purchase choice in the final moments. This format is best reserved for an ultra-competitive product category where you can accept some campaigns to act as loss leaders.
Choosing the campaign type that will work for you is largely based on seeing what performs well for your category and leads to immediate conversion. Also look for potential sales lifts across your assortment due to the halo effects of these campaigns.
Always Observe and Learn
It’s important to be aware of when your daily budgets run out, which ad campaigns are performing well, and which keywords and products are driving those campaigns’ successes. Pay attention to sales trends and your analytics, both at the keyword and product levels and each campaign’s top-level stats. Turn off non-performers and reallocate funds to increase bids and budgets for high performers. As you continue to optimize your campaigns, you will find a formula that works well for your business.