The Pros and Cons of Using Amazon Sponsored Products Ads

Sponsored Products has been the flagship product of Amazon since the beginning of the ad platform. This campaign type has become the anchor of many ad strategies for brands on Amazon, as it should, but there have also been limitations that advertisers need to be aware of. So let’s go through the pros and cons of Sponsored Products and what to be aware of when using this type of Amazon ad campaign.

Pros of Amazon Sponsored Products Ads1.
1. Fast and Simple To Deploy

Sponsored Products ads are fast and easy to set up, making them the most approachable campaign type for Amazon advertisers. Whether an advertiser is new to the platform or is launching a new product, Sponsored Products campaigns are the building blocks of ad strategy on Amazon. Simply select your product(s) to be advertised, choose the targeting method, add keywords if using manual, or set the target group bid. Then, set the campaign name and budget, and your campaign is ready to run. The simplicity of this setup makes Sponsored Products campaigns a popular choice for advertisers to get ad coverage up quickly and efficiently. 

2. Easy and Straightforward Targeting Options

When using Sponsored Products, the campaign is set to one of two general targeting options. It’s either Automatic targeting or Manual targeting. Manual targeting allows you to add your own keywords selected from Amazon’s suggestions or your product research.

3. Large Inventory of Ad Placements

Sponsored products have traditionally had the largest options available for placement on the Amazon site. These ads can appear at the top of search results, interspersed in search results, and on product detail pages. Large carousels of Sponsored Products ads appear below the fold on related product detail pages. Sponsored Brand campaigns are quickly catching up in terms of the number of placements, but Sponsored Products remain the highest in quantity.

4. Low Design Requirements

When designing a Sponsored Products campaign, little to no design assets are required. Amazon builds the ad using the content already available on the product detail page of the ASIN being advertised. This is ideal for advertisers who may not have a graphic design team or a variety of lifestyle images available to them.

Cons of Using Sponsored Products Ads
1. The Most Popular Campaign Type With Increasing Competition

With the Sponsored Products campaign type being the most popular, this also means that it has the most competition. With these campaigns being so fast and simple to set up, they are the first strategy advertisers typically use when creating campaigns on Amazon. These campaigns are also not limited to brand owners. Any seller who has a listing for an ASIN with an active offer can run a Sponsored Products campaign for that ASIN. The ads will only run if the offer has won the buy box, but this is one of the many reasons we see competition increase for these campaigns. Not only are brands fighting for position against competitive products, but advertisers are also competing for their ad for the same product to show.

2. High Cost-Per-Click (CPC) Depending on the Targeting and Category

We have seen the cost-per-click (CPC) increase on Sponsored Products ads every year across all product categories. Increasing competition and use of these campaigns drive up the demand, creating the bids at auction to be higher. 

3. Large Inventory, Competition, and Cpcs Create a Perfect Storm for Limited Visibility

The large inventory, while increasing the opportunity for placement, contributes to the increase in competition and rising CPCs that we see with Sponsored Products. Amazon, in recent years, has increased the paid placements on product detail pages, but there is still room for only four ads at the top of a search page. Similarly, on product detail pages, there are carousels of Sponsored Product ads, but they can sometimes contain upwards of 30 ads, so everyone is bidding up to show in the top seven and be featured before the cut-off.

For example, in the screenshot below, car diffusers have 35 ads in this carousel, and only seven show before the user has to click the arrow to see more options. The likelihood of a shopper clicking through all 35 before finding another product to explore is slim. 

While Sponsored Products have been Amazon’s flagship product for advertisers, they have to be used strategically to maximize the pros and minimize the cons of this campaign type. As with many things, the very things that make Sponsored Products a great tool for advertisers can also be a hindrance if not managed strategically. When launching Sponsored Products, remember that while they are simple to create, they are also competitive and prevalent, but if used optimally, they can be a powerful ad type.

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