Ad spend is an Amazon marketing metric that helps sellers figure out how much of their marketing budget they spend on Amazon ads. Third-party and first-party Amazon sellers create targeted marketing campaigns to promote their products and services to online shoppers.
Amazon sellers have an allowed budget amount for marketing that they can use to spend more of their marketing budget on advertising products that have higher sales ranks and click-through rates.
Amazon is a global e-commerce marketplace that also acts as a publisher. It shows relevant product ads to customers using keyword searches to shop online. Since Amazon is also a publisher, it can promote third-party and first-party ads to customers shopping online inside the Amazon marketplace on third-party websites outside of the proprietary network.
According to Statista, Amazon's total ad spend was over 19 billion dollars in 2021.
"Ad spend" is a key marketing metric that shows Amazon advertisers and sellers how much money they spend on ad variations. Amazon sellers use different versions of product pages to advertise them on the Amazon network.
Amazon advertisers launch marketing campaigns featuring digital ads to promote their products and services in the global e-commerce marketplace. Digital ads can contain combinations of audio, video, images, or text.
Advertisers use data from Seller Central for third-party advertisers and data from Vendor Central for first-party advertisers to learn which products have the highest sales rank and click-through rates. Savvy marketers use their branded ad spend budgets to promote the best-performing versions of their advertisements to promote on Amazon.
Sellers on Amazon's platform choose their daily budget amounts based on how much they can afford to spend on advertising costs.
Amazon marketers add money to their ad accounts based on their marketing budgets. Variations of ads can include slight or drastic changes that make a difference in click-through rates (CTR) and sales.
Fit Small Business reports that Amazon Prime has at least 75 million subscribers in 2022 and they project this number to grow steadily. These millions of subscribers represent potential buyers of products found through automatic and manual ad campaigns for branded products on Amazon.
Over half of Amazon Prime subscribers spend at least $100.00 a month (or more) shopping on Amazon.
Amazon has a few different options where sellers use their ad spend to launch targeted marketing campaigns that show up in Amazon product listings in the marketplace and in Google keyword searches.
The following are examples of Amazon's most popular digital advertising options they recommend for new advertisers on the platform.
Sponsored Ads - Recommended for new Amazon sellers. Uses automatic and manual targeting to create cost-per-click keyword search-based Amazon marketing campaigns.
Sponsored Display Ads - Generated from the product detail page, this real-time Amazon marketing solution uses first-party insights to display advertisements to customers at the best time in their buyer's journey.
Automated Ad Targeting - Amazon's Seller Central and Vendor Central have automated ad targeting options that show ads to customers based on first-party shopping data and return relevant product listings to customers interested in those items.
Manual Ad Targeting - This built-in Amazon ad feature uses manually entered keywords in product descriptions to drive traffic to product listings.
Advertisers on Amazon have a unique opportunity to showcase their products and services to customers searching for them on Amazon and even outside of this massive e-commerce ecosystem. Amazon ads can appear in a wide variety of different locations online.
Ads can appear on desktop computers, laptop computers, mobile devices, and tablets within the Amazon marketplace and third-party websites.
Advertisers on Amazon can showcase their products and services to customers searching for them on Amazon and even outside of this massive e-commerce ecosystem.
Follow Amazon's recommended marketing strategy for promoting your products and services across this e-commerce platform. They recommend starting with sponsored ads set for automatic targeting to identify the best keywords for reaching customers that searched for similar products online.
The next step is to set up manual campaigns using the best keywords discovered in automatic targeting.
Once sellers have mastered using sponsored ads for manual and automatic marketing campaigns, they can move on to the more complex steps of adding video, display, or custom ad campaigns to their Amazon marketing toolkit.
Return on Ad Spend - ROAS is a key marketing metric that Amazon uses to let marketers know how much return they are getting for their ad spending investment.
Advertisers calculate ROAS by dividing the total ad spend amount by the number of total ad sales.
