Why your Amazon Ads are not spending more

Launching a new product on Amazon is hard

It’s becoming more difficult to launch new products on Amazon. Hundreds of products in search results, products with thousands of positive reviews, and best-seller badges all make the job of generating traction for a brand new product a tough undertaking.

Sponsored Products can help to launch new products but even with great product images and positive reviews, it can still be a challenge to spend the budget you've allocated to ads and to generate the sales needed to start climbing best-seller rankings.

Key Takeaways

• Product relevance is the most important factor in deciding whether or not an ad is shown
• Relevant product are ranked based on their likelihood to lead to a purchase
• The best performing onsite placements can’t be targeted exclusively and are competitive
• Amazon favours Products that attract traffic from outside of the platform

When Sponsored Products Isn’t Spending At All

No platform wants to spam their customers with irrelevant products. Ads are filtered based on their relevance to the customer query, and better optimised products get higher relevance scores, which means that just having the right product in the correct category isn’t always enough to be seen as relevant versus more established products in competitive marketplaces like Amazon. To get ad placement opportunities, products need to be relevant to the customer search query.

When Sponsored Product Spend Is Low

Amazon also ranks the relevant products on the likelihood that they will lead to a purchase - the logic being that products that show popularity with customers, should have more priority to show ads onsite. This means that in general you’ll pay a lower CPC if Amazon thinks your product has a higher likelihood of leading to a purchase than a competitor’s.

This also means that newer products and brands will tend to have a lower rank than established products and brands, and if you want to deliver more, you'll need to raise your bids and pay higher for the clicks you generate. The Amazon ad-platform also prioritises campaigns based on their delivery needs, meaning that campaigns with higher budgets tend to result in more ability to deliver ads.

When Spend Isn’t On The Best Performing Placements

The most competitive Sponsored Ads placement is Top-of-Search (TOS). This is because it’s the most visible and appears above organic products in search results which tends to result in higher click-through rates and more conversions. In Amazon, the amount that you can bias delivery towards the TOS placement is limited, because you can only apply a bid boost for that placement, you can’t stop delivery to other onsite placements altogether.

This means, that to generate ad spend initially. you may need to place ads on product detail pages, other placements or accept that your ads will appear on the search results pages, but below-the-fold or past the first page of results. But other placements such as Sponsored Brand Video and Sponsored Display Video can generate a similar amount of visibility for a new brand as TOS placements, albeit at a higher price.

When The Ad Cost Per Click Is Too High

The initial cost-per-click that new products face can be prohibitive for advertisers but this can still be countered with other strategies, such as developing a comprehensive product targeting strategy or using another ad platform to drive offsite-traffic to your Amazon product detail pages.

Amazon likes it when products attract off-platform traffic. Apart from the potential it has to increase product sales velocity and improve ranking, you’re able to operate outside of platform constraints which helps you overcome the challenges that arise from having lower product ranking versus more established competitors.