December 7, 2022
Carbon6 Team
For Your Business

Amazon’s Sponsored Display Ads: What Are They, How Do They Work, and Can They Really Help Drive Your Sales?

Amazon’s Sponsored Display Ads: What Are They, How Do They Work, and Can They Really Help Drive Your Sales?
Person wearing jeans and fanning out a handful of $100 bills in their lap

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The 2022 edition of Amazon Advertising’s unBoxed conference kicked off on October 26 with a keynote speech focused on the future of advertising. With so many new ads tech and advancements coming to the Amazon space, it’s difficult to pick out just one item that stood out among the rest of the announcements. But if there was a king of unBoxed 2022, it might well be –  for good reason.

Really, the entire event revolved around the new Rewarded Sponsored Display type – an interactive advertising format – and Sponsored Display video creative, which presents an option to have videos made on an advertiser’s behalf. As they learned more about these developments, the attending crowd and community watching on at home was positively buzzing! 

But why?

What do these announcements really mean in a practical sense for sellers? Does Sponsored Display truly represent a sea change for ecommerce advertising in the Amazon space, or is this just business as usual with a few modifications? Most importantly of all, will these ads truly boost sales and help establish stronger foundations around your bottom line?

To answer these questions, we must first understand what Sponsored Display ads are, and how they actually work. 

What Is Amazon’s Sponsored Display & How Does It Work?

Sponsored Display ads are the static image ads displayed both on and off Amazon. They typically show the product, price, stars, badges, and a button to Shop Now. They appear on the home page, search results pages, and product detail pages on Amazon. They also show on Twitch, and third-party apps and websites.

Part of the power of Sponsored Display is in reaching a wide variety of people throughout every stage of the purchase journey, from product awareness to customer acquisition to brand loyalty to remarketing.

RELATED: Amazon DSP: A Seller’s Guide to Expanding Reach, Optimizing Campaigns, and Boosting Sales On and Off Amazon

Another great aspect about Sponsored Display is how easy it is to use. You don’t need to create any assets, or even find your own keywords. Amazon uses rich shopping and contextual signals to show your ads to the most relevant audiences.

For sellers enrolled in Amazon Brand registry, as well as vendors and agencies whose clients sell products on Amazon, Sponsored Display is a crucial component to staying competitive and successful. 

That said, it is only one part of a cohesive marketing strategy, which is why Amazon continues to develop new advertising tools for sellers, like Rewarded Sponsored Display.

What Are Amazon’s New Rewarded Sponsored Display Features?

Amazon Display ads highlighted on a digital camera listing
Photo Credit: Amazon Advertising

As the name implies, rewarded ads offer shoppers a bonus – like an Amazon shopping credit – if they click on and purchase a product. 

Though some sellers may wonder how effective this program is, the overwhelming evidence shows that it works. Amazon Ads conducted a survey of adult American Amazon shoppers in 2021, which found that 92% of consumers polled said they were more likely to act on ads that offered an Amazon shopping credit. 

RELATED: How to Improve CTR & CVR: A Seller’s Guide to Amazon Search

Although Rewarded Sponsored Display is a new feature, and only available in closed beta, rewarded ads are already available on both Twitch and Fire TV. Customers can receive entertainment credits or shopping credits by watching a particular streamer on Twitch, for example, or by signing up to a newsletter.

The established success of rewarded advertisements are undeniable. Once Rewarded Sponsored Display becomes available to the masses, there is no doubt that we will see a huge adoption across the board.

What Are the Benefits & Challenges of Amazon’s Sponsored Display?

The benefit of Sponsored Display lies in the simplicity of ad creation and the far-reaching distribution of those ads, which reach well beyond Amazon’s websites and properties. That same simplicity, though, also becomes one of its main challenges. 

Every seller’s Sponsored Display ads look similar, unless brands start creating and using custom images for their assets. That is a gap some particularly creative brands could exploit, particularly as Amazon is changing the game outside of static images by cornering the development of video.

A study conducted by Wyzowl found that 88% of participants said video ads convinced them to make a purchase. Additionally, 73% said they prefer video ads to learn about products and services. This shows that video is a dominant format for both direct advertising and product research.

RELATED: Amazon PPC Strategy: A Beginner’s Guide to Weekly PPC Optimization

However, the barrier to entry for video advertising has always been the cost to produce it. In-house studios are prohibitively expensive, and outsourcing video production is not reliably consistent. Amazon announced at unBoxed that it has released Sponsored Display video creative, which will offer video. This new capability empowers advertisers of all sizes, particularly small and emerging brands, to easily create video campaigns that showcase their products and stories.

Immersive video ads up to 45 seconds can include tutorials, demos, unboxing, and testimonials. These help shoppers better understand your products, and build trust and familiarity with your brand. Ads will link directly to your product detail pages, and campaign performance will be assessed with new video metrics. 

The new video creative will have the same reach as other Sponsored Display formats, meaning visibility to millions of consumers both on and off Amazon. 

It’s too early to know how these videos will compare to professionally produced videos, either in efficacy or cost-effectiveness. It’s possible that large enough brand owners could do better with studio production, but it seems much more likely that this feature will bring up all the small-scale and beginning sellers who embrace the format and get ahead of the curve.

Is Sponsored Display Really the Future of Advertising?

Future man wearing space-age glasses with computer interface in lenses
Photo Credit: Ameer Basheer

The short answer is yes. Sponsored Display offers reasonably-priced ads to relevant audiences through a wide-reaching network of shopping and entertainment outlets. With Sponsored Display adding video to its offerings, it is a sure sign that this system is not going anywhere.

In fact, another shocking announcement at unBoxed was the offer of Sponsored Display ads to brands that do not sell on Amazon. This will include businesses like restaurants and hotels, which will be able to use the service to reach highly-engaged viewers like the Twitch audience. While this is only in closed beta currently, it has the potential to bring together even more businesses with their customers.

If you want to create a winning advertising strategy for your ecommerce business, on or off-Amazon, Carbon6 can help! Whether you’re looking for results-driven PPC software or a great retargeting and attribution tool to help with your off-Amazon campaigns, Carbon6’s tool suite can help simplify your success!

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