Amazon Sponsored Display Ads: All You Need to Know in 2024

Meet Malena. She sells private-label toys on Amazon. Her products have done quite well in a short time, sitting comfortably in the top spots both for organic and paid search results.

However, Malena now wants more exposure for her listings, especially off Amazon, as she looks to grow her sales and beat the competition. 

Her plan? 

To run Sponsored Display ads in parallel with her other already-live Amazon advertising campaigns to create a powerful synergy and target the maximum number of potential customers.

What can Malena expect if she manages to execute the plan to the tee?

• A nice 2x boost for her product impressions
• 1.5x higher clicks
• A 15% increase in YoY sales with a better ROAS

Not bad, eh?

If this has piqued your interest, and you would like to know what Amazon Display advertising can do for you, then just sit back and follow us, as we walk you through the ins and outs of Amazon Display ads.  

What Are Amazon Sponsored Display Ads?

Amazon Sponsored Display ads are self-service, smart advertising solutions that allow sellers to advertise their products both on and off Amazon using granular targeting tactics. These tactics are designed to cater to customers in different stages of their shopping journey. Meanwhile, the ads are retail aware, meaning Amazon only shows them to users when your products are in stock or have the featured offer. This keeps your ad spend in check, while increasing your chances of conversion.   

Launched in 2019, Amazon Sponsored Display ads have continued to evolve, providing sellers with improved functionalities and customization options. For instance, when first released, Display ads were only compatible with mobile devices. Today, you can run them on a desktop, laptop, and even Fire TV.  

Are Amazon Sponsored Display ads available for books?

Yes. If you sell books on the Amazon marketplace, you can use Sponsored Display advertising to increase your reach and target both new and repeat customers. However, the option is not available for Kindle listings. 

Who can use Amazon Sponsored Display ads?

Amazon Sponsored Display ads are available to brand-registered sellers, book vendors, and general vendors selling on the following marketplaces: 

• North America – US, Canada, and Mexico 
• South America – Brazil
• Europe – UK, Germany, Spain, France, Netherlands, Italy, Sweden, Poland, and Turkey
• Asia Pacific – Australia, Japan, India, and Singapore
• Middle East – Kingdom of Saudi Arabia (KSA) and UAE

Where Do Amazon Sponsored Display Ads Show?

Sponsored Display ads show up all across the Amazon marketplace, including the homepage, shopping results page, customer reviews section, and product detail pages of similar items and categories. Additionally, they may also appear outside of Amazon on select third-party websites and apps like Twitch. However, this may not be true for all sellers as the feature has still not fully rolled out in some marketplaces, including Japan, India, and Australia.  

Amazon Sponsored Display ads example - Shopping results page:

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How Do Amazon Sponsored Display Ads Work?

Understanding the core technology behind Amazon Sponsored Display advertising is crucial for any seller looking to incorporate the ads as part of their marketing mix. It helps you establish realistic goals, plan an effective strategy, and get the maximum bang for your buck. 

Display ads are powered by shopping signals. Yes, you heard that right—no keywords! Amazon takes note of what users are buying, what product detail pages they are visiting, what categories they prefer, and what their shopping carts have looked like in the past to generate a list of product recommendations on an individual level that might interest them.

Sellers choose a targeting tactic based on their marketing goals and place a bid for the ad. The highest bidder wins the Display ad placement and their product gets recommended to the users. Amazon displays the final ad as a banner, side widget, or a video ad (still in beta) depending on the campaign configurations.

Types of Targeting Tactics for Amazon Sponsored Display Ads 

There are two types of targeting tactics available for Amazon Sponsored Display ads: i) Contextual targeting and ii) Audiences targeting.

Formerly known as Product targeting, Amazon Sponsored Display Contextual advertising allows you to reach out to users actively browsing products similar to yours based on predefined characteristics. These characteristics include category, price, brand, star rating, and Prime shipping eligibility. Detail pages, shopping results pages, and customer reviews for products that share your set characteristics are then picked for the ad placements. This tactic works best for targeting customers in the consideration stage.  

In contrast, Amazon Sponsored Display audiences targeting allows you to target and retarget shoppers based on their past activity. These shoppers might have viewed your product detail pages or pages of similar products, browsed a specific category, or bought from you in the past. With Lifestyle insights, you can even customize your Audiences ad campaign for user behavior on websites like IMDb, Prime Video, and Twitch. All in all, the tactic works best for targeting customers in the awareness and post-purchase stages.

How Much Do Amazon Sponsored Display Ads Cost?

While there is no upfront cost for deploying Display advertising, sellers pay for these ads every time a user clicks or views them. This setting is managed inside the campaign dashboard. The final amount depends on the default PPC (or vCPM) bid. It’s recommended to set aside a minimum daily budget of $40 when first starting with Display advertising.  

Are Amazon Sponsored Display Ads Worth It, Though?

Amazon Sponsored Displays ads can support your marketing push in a big way, if done right. Here are some of the benefits they can bring to your ad campaigns:

• Improved reach – Amazon Sponsored Display ads appear both on and off Amazon. Furthermore, they are programmed to run on all types of devices. This allows you to advertise your products to a wider audience. According to the Amazon internal data 2021, sellers that used Display advertising saw a 2x increase in their listing impressions.  
• All-inclusive targeting options – Display ads cover all stages of a buyer’s journey. From awareness to consideration to post-purchase, you can advertise your products to all types of audiences to increase brand awareness and customer loyalty.
• Effective ad placements – Amazon secures the best ad placements for Display advertising. For example, it may show off your new product on the homepage. Imagine the hype that can generate! Do you sell in a competitive niche? Amazon might place your ad on your competitor’s product detail page. Talk about stealing the market share.
• Customizable and varied ad layouts – Sponsored Display ads are available as banner ads, side widget ads, and video ads. You can customize these ads using hand-picked logos and headlines. This gives you increased flexibility for your ad layouts and creatives.  
• Higher ROAS – Display ads boost your ad campaign results, all the while lowering your ad spend. In an analysis of over 40,000 advertisers, Amazon found adding Sponsored Display to a brand’s ad mix increased YoY sales by 16% at a 26% improved ROAS.

Note: Sponsored Display video ad types are currently in the beta testing phase and only available for campaigns using Audiences targeting.  

All well and good, but how does Amazon Display advertising compare to other advertising options on Amazon?  

Amazon Sponsored Display Ads vs Other Advertising Options on Amazon

Besides Display ads, Amazon offers three more advertising options to brand-registered sellers. These include Sponsored Products, Sponsored Brands, and DSP advertising. Let’s take a look at how each of them compares to Display ads.      

Amazon Sponsored Display vs Sponsored Products

Sponsored Products are keyword-powered ads. They operate strictly on a CPC model, come with limited targeting options, support single ASINs only, and are programmed to run exclusively on the Amazon website. You don’t have to be brand-registered to use them.  

Amazon Sponsored Display Ads vs Sponsored Brand Ads

Like Sponsored Product ads, Sponsored Brand ads are also keyword-powered. They can’t target customers off-Amazon either. However, they do support multiple products and are only available to brand-registered sellers. All Sponsored Brand ads use the CPC-cost structure.     

Amazon Sponsored Display vs DSP 

Display Side Platform (DSP) ads are powered by shopping signals and can be used to advertise products both on and off Amazon. This makes them quite similar to Display ads. However, unlike the latter set of ads, anyone can use them—even brands that don’t sell on Amazon. They also come with advanced targeting options and are completely CPM-driven. You need a minimum ad spend of $50,000 to set up a full managed-service DSP campaign.  

How to Get Started with Amazon Display Ads – The Checklist!

Convinced Amazon Display ads are right for your business but don’t know where to get started? Following is a quick checklist to help you launch your first Sponsored Display ads campaign successfully: 

• Establish your business goals
• Choose campaign settings and set up your ad campaign
• Decide and finalize ad creatives
• Launch the campaign and monitor and optimize for results

Let’s expand on this checklist to better understand the requirements for getting started with Amazon Display ads.  

Establish Your Business Goals

Every effective advertising campaign ties back to a well-defined set of business goals. You must do the same for your Sponsored Display campaign. Ask yourself, what do you hope to achieve for your business with your Display advertising efforts? What are you looking to improve? You should be clear and specific in your answers.

For example, you may have an underperforming product that you may want to get rid of to avoid overage fees and boost your maximum shipment quantity before the next inbound shipment. In this case, you would ideally want to target shoppers in the consideration stage who already know what they are looking for and actively deciding oN the best solution to their problem. That way, you can sell out faster. Furthermore, it wouldn’t be smart to aim for a low ACoS here. You need to move out your inventory quickly, and it’s important you push your ads aggressively. Placing higher bids with a breakeven ACoS would be the best move.

Would like to fix your low unit session percentages?

Amazon Display advertising has a possible solution for that too! 

Steps to Set Up a Display Ad Campaign for Your Product

Next, you need to set up your Display ad campaign. For that, you must log into Seller Central.   

1. Once inside, head over to the main menu and click ‘Advertising’ then ‘Campaign Manager’. Select ‘Create Campaign’ from the Campaign Manager dashboard.

2. Select Sponsored Display from the ad type

3. Give your campaign a name and set the start and end dates

4. Specify a daily budget

5. Next, choose your preferred ad format

6. Select the products you want to advertise. You can shortlist multiple ASINs here; Amazon will dynamically shuffle them and show the one that has the best chance at converting

7. Scroll down to the Targeting section and choose a targeting strategy that best serves your business goals

8. Next, choose a bidding strategy. You can optimize your Display ad bids for impressions (reach), page visits, and conversions. The Audience targeting strategy though gives you an additional option to select different ways to employ the targeting tactic. You can choose to show your ads to shoppers who previously viewed your advertised products or similar items, searched for keywords relevant to your advertised products, or purchased your advertised products

9. Finally, set the bid amount you are willing to pay for each click or impression  

It’s worth noting Amazon provides you with automated bid and product recommendations to help you get the best results from your Display ad campaigns. You should at least consider them as they can offer great insights into your competition and market dynamics. 

Note: On June 14, 2022 Amazon introduced “deny list” for Sponsored Display ads. This feature allows sellers to regulate their ad placements off-Amazon by disabling them on third-party websites and mobile apps that don’t align with their brand.   

How to Create Amazon Sponsored Display Ads

Of course, you need ads to run a Display advertising campaign. Here, Amazon gives you the option to choose between automatically generated ads and custom ads. Both ad formats come with a standard set of specs, including a logo, product image, ad headline, product title, review rating, pricing, badging, and a “Shop now” button.  

For automatically generated templates, there isn’t much you can change except the logo and the ad headline. However, the second option allows you to pick a custom image on top of a logo and an ad headline to make your marketing message even more effective. It gives you the opportunity to tell your brand story with bespoke and powerful visuals.

Note: When using video for your Display ads, you have the option to upload a video file. This can be done by scrolling down to the Creatives section of your ad campaign setup page and clicking the Video tab. Make sure your video dimensions are 1920x1080 or larger. All video ads auto-play on mute and are available both on and off Amazon.

How to Monitor the Performance of Your Amazon Display Ad Campaign

Once your Amazon Sponsored Display campaign is up and running, you would want to make sure you’re tracking all the relevant metrics to optimize the ads for better performance. Bear in mind, the Amazon Sponsored Display attribution function can take up to 2 weeks to properly sync with your campaign data when you first set up the ads, so it’s important not to panic.

There are quite a few metrics—more important than others—that you would like to monitor for your Sponsored Display ad campaign. These include CTR, CR, ROAS, new-to-brand (NTB) orders, and NTB order rate. Other traditional metrics worth tracking are ad spend, ad impressions, and ACoS.   

You can find all these metrics and other campaign-relevant information in the Sponsored Display Advertised Product report, Purchase Product report, Targeting report, and Campaign report. It’s recommended to review these reports once every week to understand how your campaign is performing and what changes need to be made to further improve the performance. 

Interestingly, there are multiple third-party Amazon Sponsored Display ads software available in the market that can help you optimize your ad campaigns. They connect to your Seller Central through an Amazon Sponsored Display API. As always, do your due diligence before subscribing to any of these tools.      

Tips to Get the Most Out of Your Amazon Sponsored Display Ad Campaign

Of course, we can’t end this blog without discussing what goes into running a successful Amazon Sponsored Display ad campaign. Here are a few tips to help you get the maximum results from your advertising efforts:

1. Always add multiple products to your Sponsored Display ad campaign. That way, you can take part in more auctions and have a higher chance of getting your products featured in the ad placements. 
2. When it comes to shortlisting products for your Sponsored Display ad campaign, it’s always recommended to pick the ones that are closely related, fall in a similar price range, and have good ratings and reviews. Furthermore, their listings should be well-optimized with proper bullet points and high-quality images.
3. Don’t stress over the starting bids when launching your first Amazon Display ad campaign. Remember this is a process, which you’ll fine-tune over time as you learn more about your audience. You can start with $1 for Amazon Display advertising pay-per-click bids. For Amazon Sponsored Display vCPM bids, anything in the range of $3-$5 works. Plan according to your budget. 
4. Try to use multiple targeting tactics. According to a study, sellers who employ more than one targeting tactic for their Sponsored Display ad campaigns report 3.2% higher sales compared to sellers who only use a single targeting tactic.
5. Just like using multiple targeting tactics can help you generate higher sales, using multiple optimization strategies for your Sponsored Display Contextual targeting campaign can also reinforce your advertising efforts and bring in more sales.
6. Sign up for the Amazon Marketing Cloud services. They can help you uncover insights to better understand your audience and create a more effective strategy for your Display Ad campaigns.
7. Running Sponsored Products and Display ads simultaneously can boost your conversions and sales.

Conclusion

The Amazon advertising landscape is continuously evolving and Display ads are the most recent addition to it.  If used the right way, they can take your advertising efforts to the next level and increase your impressions, clicks, and conversions as well as improve your ROAS.

ZonGuru helps sellers build a strong foundation for their Sponsored Display advertising campaign by providing them with powerful listing optimization and customer engagement tools. Using these tools, you can set up your listings for maximum performance and give your products the best chance of success when competing with other products for those coveted Display ad spots. Sign up here for a quick demo!