Amazon Video Marketing: Ad Type & Cost Structure Breakdown

To anyone paying close attention, it certainly seems like Amazon is quickly taking over the world. What once started as a bookseller has now become the go-to for everything from paper towels to Bollywood action movies. 

There are more than 300 million active Amazon users in the world with more than 148 million Prime members in the US alone. 

With so many customers, it’s safe to say that Amazon knows a lot about our buying habits and personal lives. It makes sense that they would leverage a business model where brands and advertisers could purchase ads on their platform. The smart brands are taking advantage of Amazon’s various ad placements to craft dynamic creative and place them in front of ready-to-buy audiences. 

A Few Basic Definitions

Self-Service Ads

Self-Service ads are ad placements for brands and businesses that sell directly on Amazon. These are for sellers that wish to increase the visibility and awareness of their brand or even re-market to potential customers outside of Amazon. They are the most simple ads and campaigns to set up.

Premium Ads

Premium Ads are the most like traditional display ads that you see elsewhere on the internet. These ads are given more prominent placement on the page; they take up more space, and are positioned higher up, meaning they’re more likely to be seen by shoppers.

The Pillars of Amazon Ads

Amazon PPC

Amazon PPC ads work very similarly to Google ads. Whenever you go to Amazon and enter a search term, a list of results will appear. Near the top will be sponsored posts, which you’ll notice have “sponsored” or “ad by” labels on them. 

Any brand that wishes to advertise and gain more traction and visibility on Amazon can pay for these positions by bidding on specific keywords. If clicked, the user will be charged based on a cost-per click model.

Amazon DSP

The Amazon Display-side platform (DSP) is a self-service programmatic advertising platform that helps marketers reach their target audiences across millions of websites and mobile apps. DSP allows marketers to buy ad space in real time, using data to target their ads to specific audiences.

Because Amazon has such as massive library of data intelligence regarding buyer behavior, it’s a powerhouse of behind-the-scenes analytics. 

DSP can feature video ads, audio ads that interact through Alexa, as well as Amazon Livestream ads. 

Additional Amazon Advertising Solutions

 From Lockscreen ads on Kindle to streaming TV ads on Prime and FireTV, Amazon offers a wide variety of solutions for brands and businesses looking for both traditional and non-traditional ways to reach audiences. 

Should You Be Using Amazon Ads?

Many people are beginning to think of Amazon as less of an e-commerce platform and more of a data company. Between Amazon.com and Amazon Web Services, the Amazon ecosystem encompasses most of the internet and most of the traffic that goes across it. 

With that being the case, it makes sense that they have a great deal of information about consumer behavior and what makes certain products more successful than others. 

The best thing about Amazon ads is that the vast majority of folks that are searching on the platform have a high level of buying intent. When it comes to a Google or Bing search, you never know which stage of the buyer’s journey someone is in when they click on your ad; they might just be “window shopping.”

However, when someone clicks on an Amazon ad placement, chances are they are looking to buy a product and are at the stage of deciding which brand will satisfy their needs. 

Optimizing Your Amazon Ads

Stand Out with Video

Video ads are more attention-grabbing than text or static images, which means they can be more effective in getting potential customers to take action. Additionally, video can convey complex information more effectively than other formats, making it ideal for explaining your product or service in detail. Video ads can create a more personal connection with viewers, helping to build trust and credibility for your brand.

Create Urgent Ad Copy

When you enter the arena of Amazon advertising, you want to make sure that your ad copy is as creative as possible in order to grab the attention of your target audience. Standing apart from the crowd is incredibly important, so make sure that you do something that is humorous, creative, or compelling with your copywriting. 

Urgency is always sure to get noticed, so if you have a sale or promo, make sure to highlight this in your ad copy. 

When thinking of keywords to bid on, don’t forget to do a competitive analysis. One of the best things about Amazon is that you can piggyback on the popularity of more successful companies and brands. If you are a small up-and-coming business, learn from more established brands within your niche, and maybe end up stealing away a customer or two.

How Much Do Amazon Ads Cost?

Studies have shown that that the average CPS on Amazon does not exceed $.35. This cost is much lower than search ads on Google Adwords or Bing Ads and very similar to some of the lower cost ads on Facebook and Google Display. 

Amazon uses a traditional auction process that is similar to Google where advertisers compete for the top spot of each search term. However, the second-highest bid is the one that sets the cost-per-click bid for all the other advertisers.

For instance, let’s imagine that an advertiser wins a bid with $3 per click. However, the second-highest bid is set at $2.30. Rather than paying $3 every time someone clicks their ad, an advertiser will only have to bid a penny more than the second-highest bid. Or, in this example $2.31.

In Conclusion

Amazon has grown from a small niche website into a goliath that controls most corners of the world wide web. As such, it makes sense for most product-based brands to have some sort of presence on the platform.

Along with the sheer amount of data and consumer knowledge that Amazon harnesses, they also pack a ton of features and engaging digital products that span all of their tangential properties. This ranges across Amazon Prime, Amazon Fire, Kindle, Alexa, and more. 

There comes a point where brands can’t sit on the sidelines and must begin engaging with not only powerful platforms, but powerful brands. Amazon advertising allows you to leverage competitors and win more sales through key analysis.

Isaiah Shelton

Isaiah Shelton