Updated: Apr 17
Amazon Sponsored Advertising gives sellers and vendors a competitive advantage to make their products discoverable on search results. While the Sponsored Products (SP) manual keyword targeting has been long-established and the most widely used advertising campaign type, the bid requirements to target highly searched generic keywords are undeniably expensive in most categories. These high bid requirements are the usual challenges especially for small sellers to compete with their placements either on top of search or on product pages – most of the time, resulting in high ACOS. Amazon Advertising offers comprehensive targeting options to easily reach target shoppers, and eventually convert them into customers. If you are an Amazon seller, you must know each of the PPC ads targeting, and choose the right targeting options to help you achieve your campaign goals based on your budget and target ACOS. One of the most underutilized campaign types is Category Targeting. With its broad scope, you might worry about how your campaign will be relevant within the “category-wide” competition. This blog post will be your aid to understanding the advantages of Category Targeting that will help you significantly increase your product’s discoverability and brand awareness at a low cost.
How does it work?
With Sponsored Product Ads Category Targeting, you can expect decent traffic coming to your product detail pages since you can advertise on the entire product categories or subcategories. In contrast to its “category-wide” reach, this sponsored targeting type will give you more control over your ad placement and optimize at low bids while making your products more visible as your target shoppers hunt through Amazon’s product detail pages and general categories. Category targeting ads appear on product detail pages of the competitors’ product listings within the targeted category. We all know how powerful it is to place sponsored ads directly on your competitors’ product pages, right? It is a strategic move to catch more sales and give more exposure to your brand, and a great opportunity for advertisers.
Category ads can also be shown on search results pages, whether on top of page or rest of search, for a specific category.
Category Targeting Refinement
Amazon continuously improves its advertising solutions giving you an extra lever to refine your ad placements within the category. Once you have selected a category or subcategory target, you can filter the category by specific brands, price range, star ratings, and Prime shipping eligibility.
Protip 1: Refinement by Specific Brands You will be given different brand options that you can target under the same category. It is important during the product launch stage to identify the competitors' brands with high traffic. Targeting their product pages significantly builds traffic to your listings in return.
Protip 2: Refinement by Price Range Under the same category, refine the competitors who have the same product features as yours, with similar ratings and reviews, but with your pricing lower than theirs. This will entice your customers to proceed with their buying intent for your products. Lower pricing at the same competition levels has a notable edge on the purchasing decision of shoppers.
Protip 3: Refinement by Star Ratings Likewise, target your competitor’s product who has a similar product to yours but a lower rating when compared to yours. Your good star ratings are valuable social proof and a great selling advantage over other competitors within the category.
Low Bidding Strategy: Whether set as a “catch all” or with refinement, category targeting ads are intended to reach broad numbers of Amazon customers – far higher than the scope of product targeting and keyword targeting campaigns. Its main goal is to extend your product exposure and increase visibility within similar products in the general category. The broad scope of category targeting ads has a risk of having low PPC conversion rates. With this fact, it is recommended to start with a low bid and do careful bid inch-up optimizations until your campaigns have maximized the discoverability opportunities. This low bidding strategy would allow you to scale your spending allowance, keep the target profitability, and better control the ACOS.
Test and Results
Here is an actual test of category targeting ads under the most competitive niche in Amazon: Grocery and Gourmet. These are the three category targeting campaigns refined by brands, by prices, and the last one as “catch all” (no refinement). All campaigns are set up with very low bids (Amazon's lowest suggested bid) to start with.
● High Impressions - It is clear that category-targeting ads helped with product discoverability. Not only the impressions but the good numbers of clicks are proof that these campaigns were able to bring Amazon shoppers to visit my product detail page through my competitor brands' product listings.
● Low Conversion Rate but with Good ACOS - As expected, with the wide scope and broad reach of category targeting, maintaining good conversion rates is a challenge. However, good and sustainable ACOS was still achieved due to low advertising spend.
● Low Cost Per Click (CPC) - Considering we started at low bids, the CPC of category targeting ads is low. Even small sellers can compete with this CPC level. Here is the comparison of the CPC from sponsored category targeting vs. product targeting vs. keyword targeting:
Amazon advertising is evolving and expanding constantly. As sellers, you should maximize the advertising potential and build a sustainable campaign structure based on your budget and target ACOS. With appropriate strategies, sponsored product category targeting ads can effectively increase your products’ discoverability and win your competitors' traffic at a low cost and with good ACOS. Although there’s no exact formula to create perfect campaigns, try to understand Amazon's different targeting options, know the buying behavior of your target customers, learn from your competitors, and try to find the best campaign strategy that works for your brand.
Want to learn more? Checkout this video featuring Ritu Java, CEO of PPC Ninja talking about bid optimization.
PPC Ninja is a powerful software helping agencies and brand owners increase their advertising efficiency with cutting edge techniques such as the Bid Sufficiency model, Zero Sales Algorithm, Placements X-Ray and more. Sign up for a 14-day free trial here.
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