Launching Your First Amazon Advertising Campaign (Sponsored Products)

Once you are accepted into AMS (Amazon Marketing Services), you are probably ready to jump in, set up some ads, and make thousands!

However, you quickly realize that AMS rebranded within days of it going live for Merch by Amazon into “Amazon Advertising”. Then, unless you are very familiar with running ads online, you might be getting in over your head before you begin.

Which is exactly why I want to write this post. I want to try and attempt to help save you as much headache as possible, make sure you do not flush your money down the drain, and have a solid understanding of how the platform works (and what all those weird words mean), before you get your first ad up and running.

Launching Your First AMS Campaign

When you first log in to Amazon Advertising, you see this little screen staring at you:

There are a few more options in the top menu, but other than that, the page is pretty bare. You will want to click on this to launch your first campaign.

Note: Before you do this, it is advised to click your name/brand in the top menu, click on Payment Settings, and enter in a card so your account is billable.

Once you click on the “Create a Display Ad”, you will be presented with three options.

You have 3 options:

• Sponsored Products
• Headline Search Ads
• Product Display Ads

This will be part 1 of a 3 part series where we go over each campaign type. Today, we will be going over how to launch a sponsored products ad inside of Amazon advertising.

Sponsored Products

We are going to start out this series on Amazon Advertising with sponsored products for one simple reason. These are the easiest ads to get up and running, and are one of the easiest to “get right” where you are both making money, and understanding the advertising process.

Putting it simply, sponsored products are going to allow you promote your shirts for specific keywords in search. They will make your shirt show up FIRST or in the first few results (depending on your bid which we will get to later).

This is incredibly important because this allows you to

1. Target customers based on keywords
2. Grab customer interest FIRST

At the end of the day, Amazon is nothing more than a search engine. The higher you rank in that search engine, the more traffic you will receive organically.

Sponsored products allow you to pay for this position, and thus bring in that traffic.

To put this in perspective, another massive search engine is Google. Here is how position on the page, relates to traffic:

If you are not the type to really like graphs or understand what you are looking at, let me help you break it down. On the Y axis (up and down), you see Click Through Rate, which is often represented by “CTR”. This represents what percentage of people actually click the listing after they search.

As you can see from the image, when you rank number 1 in google, over 35% of everyone who searches for a specific keyword, will click on the number 1 result.

On the X axis (left and right), you can see the search rank position. The further you rank away from the number 1 position, the less CTR (click through rate), or traffic you will receive.

This does not 100% line up to Amazon data, but with them both being Search Engines, the data makes it clear. Ranking first gives you a HUGE advantage.

The SAME advantage that sponsored products give you!

Alright, now that you know why we are starting with Sponsored Products, and you understand what CTR is, let’s talk about actually launching a campaign.

Creating A Sponsored Products Campaign (Automatic Targeting)

After you select sponsored products, you will be presented with the create campaign settings.

This page is pretty straight forward but lets walk through it.

Campaign Name: This is pretty straight forward. You are setting up and ad, and it needs a name. If you plan on running multiple campaigns per shirt to test, you will want to name this something specific so you know exactly which campaign this is. Remember, this campaign is only visible to you (not potential customers).

Start and End: SET AN END DATE. Let me repeat that again… Set an end date. This is incredibly important. Set what day you want it to start, and when you want it to end. By default, this will be set on “no end date”. There is literally nothing worse than waking up a week later, or a month later and realizing you have spent $3,000 in ads because you forgot to set an end date. I would know =/. To start with, let you campaign run about 24-48 hours from when you are launching it.

Daily Budget: The daily budget is a little bit tricky. I typically TEST with 5-10 dollars a day budget in order to dial in a campaign. However, if you read the little tool tip inside of Amazon advertising, it will tell you: “Your budget puts a limit on how much you will spend for this campaign. Your daily budget is the amount you are willing to spend on a campaign averaged over a month. You can always change your budget later.”. This is important because it tells you that this daily budget is misleading. It tells you that this is actually averaged out. Meaning if you set a 10 dollar budget but it only spends 5 dollars the first day, it might spend 15 dollars the next day. This is another reason I like to set a start and end date, so you can easily do the math on how much you are willing to spend.

• Note: Amazon has said they recommend $75 dollars a day as a daily budget. This is TERRIBLE advice and if an Amazon employee is reading this, I urge you to change it. Never set your daily budget anywhere over $10-20 a day unless you are done with your testing and you are ramping up your campaigns. This is hands down the easiest way to give Amazon money without getting anything in return because you have not properly tested.

Targeting: You have two options here. There is automatic targeting where Amazon will target your ads to all relevant shopper searches based on your product information, and there is Manual targeting where you can choose keywords to target shopper searches and set custom bids. We are going to go over both in this article, but do yourself a favor and select automatic targeting to START WITH. I will explain the technique further down in this article.

• Note: Make damn sure you have not keyword stuffed your product listing. This option is going to pull keywords from your listing and run variations of them for your ads. If you keyword stuffed your listing, not only is that going to run your ads to the wrong keywords, but you will end up wasting money. Make good listings first and foremost, THEN run ads.

Products:

The next box you will see is for products.

You can add more than one product per campaign, but I would highly suggest you use only a single product per campaign. This makes testing a LOT easier.

You will see there is a place to enter a product name or ASIN.

There are two different ASIN structures for Merch by Amazon products. You can typically open up the product from your dashboard and look at the URL. It will typically look like Amazon.com/name of the shirt/dp/ASINHERE.

You can usually copy and paste the asin into the above box, click on search, and it will show up.

If you uploaded the shirt before they changed their ASIN structure, you May see something like this:

If this happens, you simply need to go to the product page of that product you want to advertise, click on a gender and then a size, and THEN grab the ASIN from the URL.

Click on Add product which will move the shirt to the right hand column. Then all you need to do is set your bidding below.

Bidding: Simply put, your bid number should be the amount that you want to pay PER CLICK that your ad gets. Amazon will give you a default bid and give you a suggest bid.

There are multiple schools of thought on this. The first is just to go with the suggest bid range and then monitor the campaign. The HIGHER the default bid, the more you will win out against other ads.

Think of this as an auction. You are competing for the same spot with everyone else running AMS for similar keywords. The higher you bid, the more often you will get displayed. However, you will only pay directly above what your competition pays if your bid is higher until your ad spend runs out.

Example: Say you and your competition are both running ads to the keyword “dog t-shirt”. Your competitor sets a default bid of $0.75. You set a default bid of $1.00. Both of you have a budget of $10 per day. You end up winning the auction and your ad is displayed first, yet every click you get, you do not pay $1.00. You actually end up paying around $0.76. Once your $10 ad spend runs out, then your competitor’s ads start displaying.

Setting a high bid does not mean you will pay that much, it is just that you are willing to pay that much per click. This is a great way to quickly test the market, but also might cost you more.

The second school of thought is to set a super low default bid. Think 20 cents and below.

What this does, is that you will not get nearly as much traffic, but you will basically run out the ad spend of everyone else, and slowly trickle in your own traffic to your listings. This is a LOT slower, but can be used to see if your ads are effective or not. It really depends on how many campaigns you are running and how fast you want to see results.

Since I am testing a campaign, I generally set my default bid right in the middle of the suggested bid range. Remember though, I only have my campaign run for 24-48 hours so I can keep an eye on what is happening and what the CPC ends up being.

Note: CPC stands for “cost per click” and is what you are targeting with your bid.

All that is left is to finally launch your campaign. Click on the button and you will receive the message your campaign was successfully launched:

Make sure you read what they note, which is that the campaigns can take an hour to process before they can be eligible to receive impressions.

What they do not say though is that Amazon Advertising is a new platform and there may be lags of up to 3 days in reporting. Anyone who has been using this system long enough knows that this sometime happens. We have to roll with the punches for now! Thankfully, my campaign began quickly.

The Campaign Manager

The campaign manager is where you will see all your metrics, active campaigns, and be able to tweak things such as end dates, budgets, and see how well your ads are doing in general.

Right after you launch a campaign, you can click on the “go to campaign manager” yellow button and it will take you there. However, it will pretty useless to you until your ad starts running and they start displaying all the juicy data.

As you can see, it will show the campaign, that it is active, and that it is a sponsored product. As this was an older campaign, I didn’t set an end date (as I was going to monitor and close it out the next day). You can also see that there is no spend, sales, or ACoS displayed as the campaign had JUST launched.

You can actually click on the campaign name, which will bring you into the screen you will probably spend a good chunk of time in (once your ads start running)

This is going to show you the products you are running, but the important parts are at the time. This will show you the spend, sales, ACoS, impressions, and let you see keywords, negative keywords, campaign settings, and advertising reports. We will revisit this!

Creating A Sponsored Products Campaign (Manual Targeting)

While the other campaign is left to start running, I thought I would take the time to talk about manual targeting. This is very similar, but involves a bit more work by yourself, and some more understanding of specific terms. I want to walk everyone through that.

Go back to the main page, select start a new campaign, and then fill in your details.

As you can see, I have done pretty much the same campaign, except I have picked manual targeting. This is going to allow me to add specific keywords. I also only picked a single shirt for this campaign.

After you have entered in a daily budget and picked out your product to run an ad to, this is where things change. You will now need to upload keywords.

Before you do that though, you will set a bid. This works the same as above, I would pick something right in the middle of the suggested bid range, but the technique is going to change depending on your tests.

Note: You are going to see a new checkbox called “Bid+”. I would HIGHLY suggest not ticking this box as this is going to pretty much just spend more of your hard earned money.

Bid+ increases the opportunity for your ads to show in the top of search results. When Bid+ is turned on, Amazon will increase the bids for your eligible ads.

Now that you have a default keyword bid in there, it is time to actually ad some keywords!

You will see 3 little tabs in this screen. Suggested, enter keywords, and upload file.

As you can see from the screenshot above, their suggested keywords are almost always as bad as they can get. I would suggest NOT adding these, but instead clicking on the “Enter Keywords” tab.

You can enter up to 1000 keywords on this page, but first, you see a drop down that says “Match Type”. This is incredible important to understand.

Broad, Phrase, and Exact are going to act very differently when you are running ads.

Broad Match: This setting will allow someone to see your ad if a customer searches for that specific keyword as well as a variation of it. A good example of this is we have the keyword “autism apparel” added but if a customer typed in “buy autism apparel” the ad would still show up.

Phrase Match: This is a very similar modifier to broad match where they will show the ad based on the searches that directly match the phrase or are very close variations of a phrase. It also allows addition words before or after.

Exact Match: These ads are going to be shown for searches that are EXACTLY the keyword you added as well as very close variations (such as a reordering of words but the meaning stays the same). These are great if you know exactly what you want your ad to show up for but when testing, you will want to stick with broad match.

If you are confused on which one to pick, it really depends on what you are going for. I was reading something that our friend Matt Sheeran emailed out the other day and thought this might clarify things and puts it into perspective:

These different match types are not equal. Someone searching for an exact long tail keyword is further along in the buying process. While you’ll get less clicks and less impressions, they are more likely to buy. Therefore when bidding on these different match types, you should not be bidding equally for each type.

.50 cpc on a broad match type is not going to convert the same way as a well targeted exact match. But those broad matches will have way more impressions, because the factors for them to be shown are way wider.

This is why I tier bids. Broad match is the widest portion of the funnel, so they have the lowest cpc. Phrase match is closer in the buying process, and deeper in the funnel so it would be slightly higher. And then Exact match is the closest to a buyer clicking that buy now button, so I would bid the most for those. ~Merch News Email Newsletter 

I typically START the ad process using auto campaigns. However, once I am further along, I will then use broad match, and dial down from there.

Next, you will have the option to enter in some negative keywords.

Negative keywords

Negative keywords prevent your ads from displaying when a shopper’s search terms match your negative keywords. You can exclude irrelevant searches, reducing your advertising cost.

There are two different match types for negative keywords, negative phrase and negative exact:

Negative Phrase: This is an advanced technique that I may go over at the end of this article. Essentially, if you put in a negative phrase, ads will show on searches without this term.

Negative Exact: This is an advanced technique that I went over in the ultimate amazon advertising guide here. Essentially, if you put in a negative exact keyword, ads will show on searches without this term. This is VERY powerful stuff if you understand the impact these can have on your campaign.

Note: Campaigns typically do best with 30+ keywords added.

Once you have all those sections figured out, you are now ready to launch! As you can see, I have added 16 keywords as a test only to see what happens. I kept the keyword bid at the suggested rate:

After that, you are ready to launch your campaign.

Where do I get keywords to put in my ads?

This is probably the easiest part of the entire equation.

You want to run ads to keywords that are known to convert and lead to sales right? After all, the point of running these ads is to put your designs in front of the line for potential customers.

It just so happens that Merch Informer gives you ALL of this information in every single search for the Product Search and Merch Hunter.

You can use these keywords which are proven to get traction and are proven sellers and string them into multiple word phrases that you can then run broad ads to. Incredibly easy!

Reading Your Stats (Doing the Math)

This is very important, so do not glance over this section. If you are unaware of how to do simple math, you are going to end up losing a bunch of money.

Your ads should start displaying information in a day or two after you start running them. They say 12 hours, but from my tests, this is a bit hit or miss.

Here are the results of my auto campaign. As you can see, I spent $5.87 and had sales of $29.98.

Quickly looking at these numbers, you can see that I made two sales at $14.99. This leads to an ACoS of 19.58% after almost 3,000 impressions.

This might seem good, but take a step back and do the math. ACoS stands for “advertising cost of sales” and just so happens to be calculated on REVENUE not profit. Remember that we are paid a royalty on each sale, we are not getting the full price of the shirt.

At $14.99, this means I made $1.60 per sale, leading to a total of $3.20 in royalties for $5.87 spent. This means I LOST MONEY. However, this is not a bad thing necessarily. This just means that I need to tweak the campaign a bit.

Update: Since running this campaign, and launching this article, after I turned OFF AMS ads, I have sold 7 of these organically.

Adverting Reports (Tweaking Your Campaigns)

The reason I tell everyone that wants to try out ads to run auto campaigns, is that they will give you a good starting point to tweak from there. You might lose money like I did, or you may not. Whichever happens, you can learn from it, and move forward.

Do NOT expect to launch an ad and never look at it again. These things require constantly monitoring.

At the top of your campaign manager, you can see “advertising reports”. If you are going to be running AMS ads, you are going to spend a lot of time inside this aspect of Amazon advertising. It lets you actually pull back reports of how everything is doing.

Take a look at part of the report here.

You can see that all the keywords I put in where broad, they all got an amount of impressions and clicks, and you can see how much was spent over a few days.

HOWEVER, all of those clicks and impressions mean nothing for most of these because I did not get any sales. I did make a sale based on this campaigns data, and as you can see, it got 70 impressions, 1 click, and 1 sale. It cost me a whopping 26 cents to make a sale. 26 cents to make 1.60 (which you can play with pricing as your shirt gets more popular.
This leads to an ACoS of 1.7345%. This is what I am talking about!

Since this was an auto campaign, I actually learned a lot from it even though I ended up losing money. I learned a bunch of keywords that I should NOT run ads to, but 1 keyword that I can set a low bid to, run for a long time, and should turn a profit on (When you launch a new manual campaign with this keyword). This technique has been very popular with Merchers in the past. Lots of campaigns with very low bids, just to trickle the traffic to your listings. THIS technique I showed you above though, is exactly how you find the keywords that convert, and ditch the ones that do not.

Wrapping It Up

That about wraps it up for launching sponsored products. If you are serious about making money on the platform, then this can almost be considered a magic bullet. That is a big IF you are willing to put in the effort. If you are not willing to actually look at the data, and test different things, then this is not for you.

If you want to put your amazing designs (and yes, they have to be great to do well), in front of everyone else, as well as put in the work of split testing different campaigns and losing a bit of money along the way to figure out the profitable campaigns, then this IS for you.

If you have any questions or concerns, drop them in the comments below!

Good luck!