Amazon Sponsored Ads vs. Natural Organic Sales

April 25, 2017 Allison Hess


Whether you’re a new or experienced Amazon seller, you’re always looking to boost to your listings and brand exposure. Thus, it’s likely you’ve heard of Amazon’s Sponsored Ad Sales as a means to promote your products and company on the Amazon marketplace.


But how can you determine if the return is worth the investment for a given listing to be sponsored? And how do you know which type of sponsored ad would be right for that product?  


What is Amazon Sponsored Ad Sales?

If you’ve ever browsed on Amazon, you’ve undoubtedly seen sponsored products. These are those items flagged with an orange “Sponsored” tag, found at the top and middle of product search pages (aka the areas that most draw the eye of the consumer). These Sponsored ads can also be found on individual product listings under the section “Customers Who Bought This Item Also Bought.” Again, the sponsored product listing is flagged as “Sponsored” as a means of gaining the attention of the shopper.


Amazon Sponsored Ads have been around since 2012, but they have recently become “smarter” in terms of ROI for the seller as well as relevancy for the consumer. This updated program promotes higher visibility on search and product pages, making these ads more successful than ever. The Sponsored Ad program now includes a Campaign Manager position that offers a simpler Seller Central usability and login system. This makes it easier for sellers to monitor the reach, engagement, and success of their various ad pages.


These Sponsored Ads also give more flexibility and control to the seller. The Campaign Manager is able to choose what the ad “looks like” and who it targets. Automatic targeting allows Amazon to promote the product to all relevant customer searches based on product information. Manual targeting is when sellers set keyword options for a given listing, so they can better control the target audience of the ad.


It’s important to note that Sponsored Ad Sales are different from Amazon Product Ads. Product Ads link to an external website, while Sponsored Ads promote Amazon marketplace listings. Product Ads can be useful if you use a separate eCommerce website but many of your customers shop on Amazon. Product Ads are similar to a sponsored ad on Facebook or Instagram, linking out to your external website; it is basically a traditional affiliate marketing ad. Although it is on the Amazon platform, it is not Amazon-specific. In this way, Product Ads will not boost your Amazon optimization or listings. Sponsored Ads, however, are formulated to optimize your Amazon product listings in particular.



What Are The Benefits of Amazon Sponsored Ad Sales?

Sponsored Ad Sales deliver relevant product ads to a targeted set of shoppers. These sponsored listings are often pushed to the first page of Amazon’s search results, offering greater visibility in a dense marketplace of sellers. This program also offers in-depth seller tools to better understand the return on investment, conversion rates, and consumer behaviors with relation to a particular product listing.


Overall, Amazon Sponsored Ad Sales can put you into a positive cycle of Search Amazon Optimization (“SAO”). The Sponsored Ad automatically pushes your listing to the top of the Amazon search based on keywords, bids, and search relevancy. In this way, it highlights a given product, which not only boosts visibility but also acts as an Amazon-given recommendation. A customer will see that this listing is sponsored, and they are more likely to trust the seller because they think of it as “endorsed” by Amazon.


Thus, it can increase that product’s chance of winning the Buy Box, which is crucial to conversion rates and sales. Winning the Buy Box means increasing seller volume. Increasing seller volume boosts profit and your credibility on the Amazon platform. Coupled with great customer service, you’ll receive positive customer reviews and stars, which will enhance your Amazon search optimization in the future (even after you have stopped running the Sponsored Ad).


more visibility ➡️ more sales ➡️ more stars ➡️ more optimization ➡️ more visibility


Next thing you know, you’ve entered into an amazing cycle of conversion that puts your business on an upward projection of growth and profits.



When Should You Use Amazon Sponsored Ad Sales?

Amazon Sponsored Ads are best when you need an upswing in your SAO and want to increase the visibility of your items. This is especially important if:


  • You are a new Amazon seller with few sales and reviews.
  • You’ve recently launched a new product.
  • You are finding it challenging to keep up within a specific competitive sphere.
  • You sell a unique or rare product that would otherwise not be found easily in searches.


Sponsored Ads in tandem with great customer service enter you into a cycle of positive reviews, positive promotion, and positive growth. This is especially important for those products that currently have few reviews, including new or unique items.



When Should You Choose Natural Organic Sales?


You will want to forgo Sponsored Ad sales for the following three reasons:


  1. You currently have a low star rating for whatever reason. Although you will gain more visibility, Sponsored Ads will not change your product’s reviews. Even though people will see your product, they will likely not buy if you have a low rating. You will want to take a different approach to boost your reviews before you spend the money on a Sponsored Ad. Another possible option to enhance your reviews could be Amazon’s Today’s Deals feature.


  1. Your biggest competitors are using Sponsored Ads for their products. If you have a direct competitor that is using this method of promotion, it may not increase your visibility or ability to win the Buy Box.


  1. You do not meet the eligibility requirements. In order to use the Sponsored Ad promotion, you must:


a.) have an active Amazon Seller Account;

b.) have the ability to ship to all U.S. addresses;

c.) have new products (used products cannot be Sponsored);

d.) be eligible for the Buy Box.


Although Sponsored Ads have a lot of wonderful benefits, they cost money. Sponsored Ads have a cost-per-click fee, meaning that Amazon will charge you based on the number of people who click on your ad. In this way, your return on investment is directly correlated to your conversion rate.


Natural, organic sales are the most sustainable way to keep your business afloat, simply because they happen naturally and organically! You can basically sit by while you watch the money roll in. Your product listings attract and convert customers, which proves a brand success and, of course, costs less money than a promotional campaign. If executed properly, Sponsored Ads have the ability to push you into a positive cycle of conversions and reviews that later creates these natural, organic sales.


The Sales Bottom Line 

Sponsored Ads can be one of the greatest tools to boost your products in the short-term and the long-term. With a successful promotion, great customer service, and a quality product, your Amazon brand will grow exponentially.


Setting up a Sponsored Ad can be complicated, though, and you want to ensure that you run a successful campaign. We will have a future article with our favorite tips on running these promotions.


HomeRev simplifies this process through our Sponsored Ad Management as part of our Seller’s Choice Managed Services. We help you create high-quality promotions that will ensure phenomenal visibility, enhanced conversions, improved margins, and a growth in future organic sales. Contact us if you want to learn more about our Sponsored Ad services!

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