Amazon Sponsored Products: A Quick Case Study
Published: May 3, 2016
Author: Kimberly Cheung
Amazon is the largest internet-based retailer in the United States – most of us have probably used Amazon in some way, shape, or form. Because of its popularity, there’s potential for a large market that remains untapped by advertisers. Running on Amazon could really help broaden product targeting to relevant shoppers on Amazon, and ultimately act as a supplement to a client’s online store.
There’s a couple different advertising options in Amazon. However, we’ll be focusing on Amazon Sponsored Products in this post. Amazon Sponsored Products essentially allow you to advertise on the Amazon network using keyword targeting, and show your ads by using the same feed of products that a seller would use to sell on Amazon.
I wanted to simply go over some results that I’ve seen with this channel and point out some of the benefits of advertising with Amazon (at least benefits specific to this client):
- Cheaper CPCs than AdWords: CPCs will really vary depending on the specific auction, but in this case, our CPCs were under $0.12. Our AdWords CPCs averaged to around $0.40, which is more than 3x as expensive. Since Amazon Advertising is definitely not as popular as AdWords as an advertising channel yet, there is potential for much cheaper clicks and cheaper sales.
- Higher ROAS: In our case, target numbers for our client meant reaching 280%+ ROAS. While AdWords consistently hit those numbers, we saw numbers well above 280% coming in from our Amazon ads. Amazon showed a lot of potential for good ROI in this case.
- Good Sales Volume: You might be looking at the last table and saying to yourself, “Less than 60 sales on a monthly basis? There’s no volume!” Again, keep in mind that these numbers are specific to this case – you’ll notice in the next graph that while Amazon started off with only 5% of sales volume, it grew to a pretty consistent 15% of total sales. Considering we were reaching ROAS numbers well above the 280% target number, there was still considerable room for growth.
Final thoughts? Amazon Sponsored Products is definitely worth checking out as an additional advertising channel, especially if you already sell products through Amazon. As Amazon continues to improve the platform, I believe it’s an increasingly valuable testing ground to getting additional sales.