Sponsored Profit

According to research from eMarketer, Amazon Sponsored Brands ads now make up nearly one-quarter of Amazon’s Pay-Per-Click advertising revenue.

In this post, we provide an overview of this increasingly popular ad type and consider five reasons why as an Amazon seller, you should be using them to advertise your products.

Let’s dive in.

What are Amazon Sponsored Brands ads?

Just like Sponsored Products and Sponsored Display ads, Sponsored Brands ads are a pay-per-click (PPC) advertising method. You bid on keywords in an auction to gain impressions on your potential customers and pay based on the number of times shoppers click on the ad.

Previously known as Amazon Headline Search Ads, Sponsored Brands ads are banner ads that display your brand logo, custom headline, and multiple products, in the most prominent places in the search results. In early 2020, Amazon added a new format to Sponsored Brands in the form of video ads.

Sponsored Brands ads appear on both desktop and mobile and are only available for professional sellers who have a verified Amazon Brand Registry account.

Sponsored Brands Ad Formats

With Sponsored Brands, there are three types of Ad Formats to choose from Product Collection, Store Spotlight, and Video.

Product Collection: This ad format allows you to target up to three products in your brand. The ads send traffic directly to your Amazon storefront or a dedicated landing page featuring the products in your ad. These ads appear in Top of Search, Product detail pages, and Bottom of Search.

Store Spotlight: This ad format is only available to sellers with an Amazon storefront. Think of your Amazon storefront as your very own eCommerce website, but on Amazon. Store Spotlight is great for brands that sell multiple products across a variety of categories. That’s because instead of promoting three specific products, you can promote three entire product categories and their store pages – all with just one ad.

Video ads: Video ads appear at the top of the Search, within the search results, and on product detail pages. These ads send traffic directly to the relevant product listing instead of your storefront or landing page.

How do Amazon Sponsored Brands ads work?

Like Sponsored Products, Sponsored Brands ads are an important part of the marketing funnel. Sponsored Products are the foundation of your advertising strategy. They target the bottom of the funnel in the ‘purchase’ or ‘conversion’ stage. They drive customers directly to your product at the moment they’re intending to make a purchase.

Sponsored Brands, on the other hand, are higher up in the funnel in the ‘awareness’ and ‘consideration’ stages. They generate awareness of your brand by highlighting an entire brand via product carousels or videos rather than individual items.

These ads allow shoppers to discover your products which in turn will drive conversions as your prospect customer goes farther down the funnel.

The Marketing Funnel

5 Reasons For Using Amazon Sponsored Brands ads

Reason #1: They drive brand awareness
As previously mentioned, Sponsored Brand creates brand awareness and helps you to acquire customers by allowing shoppers to discover your products in the most prominent places in the search results.

The customizable ad creative engages shoppers in a way that other Sponsored ads do not. They draw attention to entire product lines, rather than honing in on a single product.

The ‘funnel’ traffic directly from the ad to your Amazon Storefront or custom Amazon landing page allows shoppers to learn more about your brand and to browse your products.

Reason #2: They increase visibility
The addition of Sponsored Brands ads allows you to take up more paid real estate in the search results. Amazon has reported a 30% increase in category impression share for brands that use both Sponsored Products and Sponsored Brands together.

So if you want to increase your share of the impression space, it makes sense to start using Sponsored Brands.

Reason #3: They divert shoppers away from the competition
Not only are Sponsored Brands ads prominent and enticing in their own right, but they allow sellers to curate an immersive brand experience for shoppers while diverting them away from competitors’ listings.

Once clicked, Product Collection and Store Spotlight ads will send customers to your storefront or landing page, where they can only view your products. There are no competitor ads or product listings on display; the customer only sees your brand and products.

Store Spotlight ads

Reason #4: Video ads are a game-changer
The highly popular Video ads offer sellers a huge advantage over competitors by helping your product stand out in the search results.

This format allows sellers and brands to feature a product with an auto-playing video. These video ads are played at the top of search, product detail pages and tend to have a higher conversion rate.

The main reason video ads are so effective is that unlike static ads they are interruptive advertising. Research shows viewers retain 95% of a message when watching a video compared to retaining only 10% when reading it in text.

Reason #5: High RoAS
According to JungleScout, Sponsored Brand ads offer the highest Return On Ad Spend (RoAS) of any type of Amazon PPC; for every $1 you spend on Sponsored Brands, you’ll earn $6.28 in revenue.

RoAS is calculated by dividing the dollar amount produced in sales by the dollar amount spent on advertising (total sales / total spend), and can therefore be used to measure the effectiveness of your PPC campaigns.

The most likely reason for this high RoAS is because the customizable fields allow you to speak directly to customer searches. This will improve conversion rates, and therefore improve ad spend efficiency.

ad campaign type

Final Thoughts

Adding Amazon Sponsored Brands to your Amazon Advertising arsenal can help you grow brand awareness and sales revenue.

If you’re an emerging brand, Sponsored Brands can help you engage shoppers as they browse for products on Amazon. If you’re more established, Sponsored Brands can help increase brand loyalty and encourage repeat purchases.

With 34% of Amazon sellers using Sponsored Brands ads, this ad type is gaining popularity. That means it’s likely that more and more of your competitors are taking advantage of these ads to create brand awareness for their brands and products. So if you’re not, it may be time to start so that you don’t get left behind.

Sponsored Profit is an Amazon Advertising Agency that specializes in helping established Amazon FBA brands save time and scale profitably with their done-for-you PPC Management service.