Amazon’s consistency, obsession with automation, and brutal price competitions have helped it dominate the e-commerce industry. Last years’ financials show that Amazon India has superseded Flipkart in GMV sales and has come out as the biggest e-commerce companies in India in 2018.

With more than 3,80,000 sellers on Amazon.in selling roughly 170 mn products, amazon ads have not only become a way to assure higher sales but have started becoming a necessity to rank higher and drive volumes on Amazon.

Since Amazon is well aware of that, it plans to target the advertising industry over the next year. With advertising being Amazon’s fastest growing business, it is already estimated to be the third-largest ad seller in the U.S. right after Google and Facebook with a 4% market share.

Revenue_Graph_Amazon

So let’s get started!

What is Amazon Ads? How does it work?

Just like Google, when someone searches for a particular keyword on Amazon, the products that dominate the top section of the search results with a “Sponsored” or “Ad” tag are advertisements.

Amazon has also forayed into display marketing and now shows banner advertisement and video advertisement on product description pages from where the users can be detected to the advertised product page on the Amazon website or any other landing page of the advertisers choice.

Amazon_Ads

What is Amazon Ad?

 

While there are various types of advertisements on Amazon, this is just the most basic one. This ad type is called Sponsored Product Ads.

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What are the different types of Amazon Ads?

1. Sponsored Product Ads
These ads appear right where customers will see them, such as the first page of search results and product pages, providing an instant visibility boost.

Sponsored Product Ads

 

2. Sponsored Brand Ads
They appear in the search results to help drive discovery of your brand. It is usually shown to showcase brand inventory while building overall brand recall.

Sponsor Brand ads

 

3. Display Ads
These ads appear either on the relevant category pages or on the relevant product pages.

example of Display Ad

 

Example of DisplayAd

4.Video Ads

This is an extremely new type of advertisement option offered by Amazon.in and can help you drive traffic to your product detail page on Amazon, your own website, or another destination across the internet.

Example of Video Ad

How are users targeted?

Amazon ads are almost replicating the model of Google advertisement and have ad formats which run on different types of targeting. While Amazon sponsored product ads run on the traditional form of targeting i.e. keyword-based targeting model, Amazon display ads do work on a couple of interesting formats where the advertiser can target users based on specific interest categories or specific product pages/product categories.

Hence providing a very good mix of options for advertisers to either go very specific with higher intent keyword level targeting or going a bit broader with display and video advertising options.

Are Amazon ads effective?

The question that crosses every advertiser’s mind is that are Amazon ads really effective? Do they provide a good return on investment (ROI)?  Well, the truth is that since currently there is relatively lesser competition in Amazon as compared to Google Ads or Facebook Ads, Amazon is proving to be quite an effective platform of running advertisements for e-Commerce brands.

Plus with the increasing searches of higher intent keywords (product related searches happen directly on Amazon),  Amazon advertising will prove to be an effective medium for brands and advertisers who have the right mix of product & prices.

Should you invest in Amazon Ads?

If you are selling your products on Amazon, you should definitely look at advertising on Amazon.

As a marketing strategy for Amazon sellers, you should first start spending on Amazon and then look at advertising on other platforms like Facebook or Google to achieve scale.

Have any further queries related to Amazon ads? Ask them in the comments section or reach out to me directly on marmik@digichefs.com

Also Read: 6 Hot Facebook Features for Better ROI by a Facebook Ads Expert