First, we think that Sponsored Products are one of the most important ad formats and that’s why advertisers should have a very well thought out strategy for them. Sponsored Products ads are very versatile, and they can also be complex when it comes to targeting options, which is why we believe that it’s essential to be very methodical when optimizing campaigns.
We think it’s important for advertisers to have a clear goal in mind in order to create a high-performing campaign. Is the goal maximizing sales or impressions – something you might do if you are launching a new product – or is it to generate a certain amount of profit? Having a clear answer to this question will help guide advertisers in their decision-making and allow them to track their progress. To do this, we recommend choosing a target ACOS (advertising cost of sale) for your campaigns.
Secondly, we recommend tracking your progress towards your goal and identifying the areas where you have opportunities for growth systematically. The free tools we offer can show month-over-month changes in your KPIs, as well as the products that are the largest performance drivers, so that you can see where you are making progress and where you have room for improvement.
Amazon Ads Sponsored Products solution comes with two campaign types (automatic and manual) and several targeting options (keywords with different match types, ASIN targeting and category targeting) and we recommend using all of them together to create a campaign structure that runs ads with both precision and efficiency, while keeping the effort needed for campaign optimization to a minimum.
Our recommended best-practice setup consists of three campaigns with five ad groups, and it’s organized in the following way:
- 1 automatic campaign with 1 automatic ad group
- 1 manual campaign with 2 ad groups: one broad, one exact
- 1 manual campaign with 2 ad groups: one for ASIN targeting, and one for category targeting.
By combining the different campaign and targeting types, you benefit from each type’s advantages and overcome limitations that a single targeting type alone may have. In our best-practice Sponsored Products campaign structure, each campaign and ad group has a unique function that contributes to the overall impact of the campaign:
- The automatic campaign automatically performs product and keyword targeting research.
- Then those targets are refined through manual campaigns and ad groups (broad match keyword or category targeting).
- Only the top targeting segments are added to ad groups with the highest degree of control: an exact match keyword or ASIN ad group.
The four most important things we recommend are: keyword and product sourcing, adding negative targeting, bid optimization and tracking your progress. Each of these are relatively simple to do; however, as mentioned before, the important thing is to be very methodical and consistent about the optimization. And to do it on a regular basis.
For keyword and product sourcing and adding negative targeting, there are three things that need to be done to ensure that promising targets are prioritized and unsuccessful targets are excluded.
- Move profitable keywords and ASINs from an ad group or campaign with a broader reach to a more precisely targeted campaign to be able to fine-tune them. For example:
- Consider adding those profitable keywords and ASINs as negative keywords in the source ad group or campaign to halt traffic to them. This way, all traffic for that keyword or ASIN flows through one ad group or campaign and all of your performance data is in one place.
- Do a regular check-in to understand the keywords and ASINs running in your campaigns that are generating clicks without conversions and add them as negative keywords/ASINs.
- High-performing keywords and ASINs can also be transferred to Sponsored Brands and Sponsored Display campaigns.
Bid adjustments: to ensure that you meet your target ACOS, it’s essential to adjust your bids regularly. If you spend too little, you could miss out on potential valuable placements and sales. If you spend too much, it will be difficult to reach your target ACOS, and therefore your desired profit margin. It’s very important that you set a clear and realistic ACOS so that you can increase or decrease your bids systematically depending on whether they are below or above the target level.
Our final optimization recommendation is to track your progress over time to see that you are on the right path to achieving your goal. While it’s possible to do this manually, we recommend checking out our free analytics tools which distill the information you need to help understand how you are doing and where you have the most potential for growth.
I hope readers will walk away with a better sense of how impactful and versatile Sponsored Products campaigns can be and that it’s key to make use of that versatility in a sophisticated campaign setup that is optimized methodically and regularly.