Understand Amazon Ad Placement in Sponsored Product Ads

This article aims to decode the complexities of this ad placement model and offer insights into its critical role in the success of an Amazon-based business.

‍

What is Amazon Ad Placement Sponsored Product?

Sponsored Product is the ad you create to promote your product, and Sponsored Product Ad Placement is where that ad appears. You can think of Sponsored Product as the "what" and Sponsored Product Ad Placement as the "where."

When you create a Sponsored Product campaign, you have the option to manually or automatically set your ad placements. The placement is crucial because it determines how visible your ad will be to potential customers. For example, a Sponsored Product ad at the “Top of Search” is more likely to be seen and clicked on, but it might also cost more per click than ads in 'Rest of Search' or 'Product Page' placements.

‍

Types of Amazon Ad Placements

‍

Top of Search Placement

Being at the “Top of Search” in Amazon ad placements offers significant advantages but also comes with some challenges. Ads in this coveted spot are the first things customers see when they initiate a search, offering your product good visibility. This placement is particularly effective for capturing customers who have a high intent to buy, as they are actively searching for specific products. The prime location also helps in building a positive brand awareness, as customers often equate top-ranked products with quality and relevance.

However, the cost of securing this prime real estate can be steep, with higher cost-per-click (CPC) rates compared to other ad placements. Additionally, to maintain this top position, a well-thought-out keyword strategy is imperative; otherwise, you risk wasting your ad budget on terms that won't convert.

‍

‍

Rest of Search Placement

Rest of Search placements offer a visibility advantage over relying solely on organic search results, even it has a lower click-through rate compared to top-of-search placements. These placements generally come at a lower cost-per-click (CPC), making them a cost-effective option for gaining some level of visibility without a substantial investment.

While engagement is limited due to their location below the fold or on subsequent pages, they do capture “tail-end conversions“ from users who scroll down for more options, making these placements particularly useful for niche or unique products. This means you could still attract sales from customers who take a more deliberate approach to their shopping, willing to explore beyond the initial search results.

‍

Product Page Placement

Product Page Placements offer targeted exposure by appearing on pages of products similar to yours, capturing the attention of customers who are already interested in a similar item. This setup encourages comparison shopping, as customers can easily weigh your product's features and price against those of the product they're currently viewing. If you offer a range of products, these placements also serve as a tool for upselling and cross-selling, potentially increasing the customer's overall cart size.

Product Page Placements are usually less expensive than 'Top of Search' placements, making them a cost-effective way to reach a targeted audience. However, it's important to note that customers viewing these ads are often in the 'consideration' stage, rather than the 'buying' stage, and may therefore be less likely to make an immediate purchase.

‍

‍

How to Adjust Bids Based on Amazon Ad Placement

In Amazon's Sponsored Products campaigns, Search Placement Bid Modifiers, also known as placement multipliers, allow advertisers to adjust their bids for Amazon product placements. These modifiers work in percentages and come into play on top of your base bid for specific keywords.

‍

How Product Placement Multipliers Work?

For example, if you set a base bid of $1 for a keyword and then apply a 50% placement multiplier for 'Top of Search', your bid for that specific placement would be $1.50. In contrast, if no multiplier is set for 'Product Details Page', your bid would remain at the base bid of $1 for that placement.

‍

How Different Bidding Strategies work with Ad Placement multipliers

Placement multipliers can work in conjunction with Amazon's various bidding strategies, like Fixed Bids, Dynamic Bids-Down Only, and Dynamic Bids-Up and Down.

‍

Fixed Bids

In a Fixed Bid strategy, if you set your base bid at $1, Amazon will use this $1 bid for all auctions you participate in, irrespective of where your ad will appear (Top of Search, Product Page, or Rest of Search).

Example: If you set a 50% placement multiplier for Top of Search, your bid for that placement becomes $1.50. Amazon won't adjust this bid; it remains fixed unless you manually change it.

‍

Dynamic Bids - Down Only

In this strategy, Amazon can reduce your bid based on the likelihood of your ad converting. Assume you set a base bid of $1 and a 50% placement multiplier for Top of Search, making it $1.50 for that placement.

Example: If Amazon algorithm predicts the click is less likely to convert, it might reduce the bid to $0.75. The placement multiplier is applied first, so the bid that may be reduced is the $1.50, not the base $1.

‍

Dynamic Bids - Up and Down

In this adaptive strategy, Amazon will raise or lower your bid based on the probability of conversion. You start with a $1 base bid and set a 50% placement multiplier for 'Top of Search', making it $1.50 for that placement.

Example: For 'Top of Search', Amazon could increase your $1.50 bid by up to 100% if it thinks the click is likely to convert, making the potential bid as high as $3. Conversely, if the algorithm believes the click is less likely to convert, it could reduce your $1.50 bid.

Bidding strategies and placement multipliers in Amazon Sponsored Products campaigns work in alignment to optimize the performance of your ads across different Amazon product placements.

Let's say you're selling hiking boots and set a base bid of $1. You also decide to use Dynamic Bids-Up and Down with a 50% placement multiplier for Top of Search.

• Initial Bid: Your base bid for 'Top of Search' becomes $1.50 after applying the 50% multiplier.
• Dynamic Adjustment: Amazon's algorithm might increase this bid to $2.50 if it thinks a conversion is highly likely or decrease it to $1.25 if a conversion is less likely.

The synergy between bidding strategies and placement multipliers provides advertisers with both control and flexibility. By effectively using both, you can not only compete more aggressively in high-value placements but also conserve budget in areas where conversions are less likely, thereby maximizing your overall ROAS.

‍

Maximize Top-of-search ad placements

When a keyword performs well, increasing its bid can indeed improve its ranking in organic search results. In this case, high-cost top-of-search ads may no longer be as necessary. Additionally, if not carefully managed, an over-reliance on top-of-search ads could cannibalize sales that would otherwise come from natural search results. Therefore, a comprehensive consideration of multiple factors is needed when employing this advertising strategy to achieve the optimal balance between ad spend and sales revenue. Here are some situations that you should stop bidding high to reach top-of-search placement.

It's also key to track both ACOS and TACOS metrics; a drop in ACOS without a corresponding TACOS decline could signify your ads are undercutting organic sales. Also, if an ASIN already ranked high in organic results, consider reallocating your ad spend to boost other products.

‍

Other Sponsored ads Strategies

• Amazon Video Ads Format Guideline: All you need to know about Amazon video ads
• A Complete Guide (2023) to create Amazon Sponsored Video ads campaigns
• How to run efficient Amazon PPC Ads campaigns?

‍