Brand owners looking to succeed on Amazon can achieve more when they advertise on the marketplace. But, advertising on Amazon can be confusing. Sure, ads can drive brand awareness, increase sales (and loyalty), and increase inventory turn, but what do all those acronyms mean? How does one measure success on Amazon in terms of their advertising efforts? We thought it would be helpful to create a one-stop guide to all terms related to Amazon advertising for your reference.
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Formerly called Enhanced Brand Content in Seller Central and A+ Content in Vendor Central, now A+ Content is the term used for the feature in both platforms that allows brand owners to describe product features in different ways, include brand information, add enhanced images and videos, and more. Professional sellers who have been approved as brand owners through Brand Registry are eligible to leverage this powerful feature.
Above The Fold
Above the fold is a term that references the upper half of the page in search results. Product listings that appear ‘above the fold’ are visible to buyers without having to scroll down on the page.
ACoS or Advertising Cost of Sales is an indicator of campaign performance, representing the ratio of ad spend to ad sales revenue. This metric helps you quickly assess how cost-effective your ad campaigns are in generating immediate sales. The lower the ACoS, the cheaper it was to drive a sale; the higher the ACoS, the more expensive it was to drive a sale.
ACOS is calculated as Ad Spend/Ad-derived Sales and is represented as a percentage. If you spend $15 on an ad to make $100 in ad-attributed sales, your ACoS percentage is 15%.
ACOS can vary greatly depending on the product life-cycle stage and the Amazon category that you’re selling in, as a result, this isn’t always a good indicator of performance or the full impact advertising has on your larger business, which is why it can be helpful to also measure TACOS (jump down).
Ad groups are used within a campaign to further refine your targeting strategy by grouping products with similar attributes together. For instance, if you’re running a campaign with outdoor lighting, you may want to create ad groups based on type: String Lights, Lanterns, Solar lighting. This helps ensure the most relevant ad is displayed for each search and helps you control ad spend. Ad groups are available for Sponsored Display and Sponsored Products campaigns.
The product and/or lifestyle photos, video, and text that you use to communicate to buyers. For both your listings and ads it’s important to use high-quality images that make your products look appealing.
The type of advertising you choose to run. This is most commonly referred to as ‘ad types’. The options are Sponsored Product ads, Sponsored Brands ads, Sponsored Display, and Demand-Side Platform ads (DSP).
The goal of your digital advertising effort. Goals can be looked at as the different stages in the buying journey, for example, consideration, loyalty, brand awareness, and purchase, as well as the product life-cycle stages, such as launch, growth, profit, decline. Advertising objectives are often specific to certain ad types. For instance, Sponsored Product ads are designed to promote individual products with the goal of increasing the visibility of the product. Whereas Sponsored Brands ads are designed to increase awareness of your brand.
The location of your advertisement. Depending on the ad type in question, ads can appear in search result pages on Amazon, within product detail pages, on third-party websites, and on Amazon devices like Fire tablets and TVs. Ad placement also refers to the position an ad appears on the search results, these are most commonly referred to as: Top of Search, Rest of Search, and Product Pages.
Sales that are generated as a result of your advertising efforts. For example, if a buyer clicks on an ad and this results in a purchase, the sale is classified as an Ad Sale.
Cost accrued from advertising campaigns; for sponsored products, sponsored brands, and sponsored display spend is accrued for each click on an ad. Whereas for DSP ads spend is accrued per-thousand impressions.
Amazon Advertising Auction
Amazon advertising is set up as a “Second Price” or “Vickrey” auction. This means that if you are the highest bidder for the term “travel coffee mug” with a $1 bid, and the second highest bidder is bidding $.75. You will win the auction for the placement of that term, but you will only pay $.75 plus $0.01 when a shopper clicks on your ad.
Amazon’s search algorithm matches a customer search query to relevant products in Amazon’s catalog. In addition to factoring in search relevancy, Amazon’s algorithm will also factor in performance metrics such as conversion rate, sales history, organic and ad ranking, and CTR. The algorithm is designed to place ads in front of consumers that have the highest likelihood of converting.
Amazon Standard Identification Number – a 10-character alphanumeric unique identifier assigned by Amazon for product identification within the Amazon organization.
For products that have variations (sets of products that are related to one another in terms of size, color, flavor, etc) a parent-child ASIN relationship is established. The parent ASIN is a non-buyable product used to relate the child products, each child product or variation is assigned a child ASIN. This is commonly seen in apparel, electronics/computers, cell phone and accessories categories.
The actual advertisement that leads to a particular purchase. When a buyer clicks an ad, Amazon tracks their activity after the click is registered, if that click results in a sale Amazon will attribute the ad sales and ad spend to the first SKU clicked, even if the buyer purchases a different product or does so at a later time.
The attribution window is the time period Amazon measures a buyer’s purchases after clicking on an ad. The attribution window is different for different types of ads. While spend for a click is reported almost immediately, Amazon allows itself between 7-14 days, depending the ad type to report the sales attributed to a click.
Sponsored Products: 7 days
Sponsored Brands: 14 days
DSP: 14 days
Sponsored Display: 14 days
Click here to see our attribution window study.
Automatic campaigns target ads to all relevant customer search terms as dictated by Amazon. There are no keywords in automatic campaigns, Amazon uses information from the product listing (title, bullet points, description, etc) to select and test keywords.
Automatic campaigns cast a wide net serving ads to a large audience, they’re often used for keyword discovery. However, since Amazon automatically selects the keywords, bidding is defaulted to the ad group level, limiting your control.
It is recommended to run both an automatic and manual campaign for each product you’re advertising.
Amazon’s Best Deals is a longer promotional discount than a Lightning Deal or a Deal of the Day. These promotions will be marked with a “Best Deal” symbol. There is a minimum discount requirement, and the promotion will run up to two weeks or until the seller runs out of inventory. Sellers can run Sponsored Product ads to increase the success of a Best Deal.
The highest amount a seller is willing to pay on a search term to win the auction. Sellers must participate in the auction to make their products visible to buyers. Bids will determine the ad placement on the page. Sellers are only charged if a buyer clicks on their ad.
The measure of the direct impact of your brand’s advertising on buyer perception and the performance of your brand on Amazon. Metrics included in the calculation include brand awareness, likelihood to purchase and other post-exposure success metrics.
The Amazon Brand Registry is a program sellers, vendors, and verified brand owners are eligible for. If accepted sellers will receive access to additional tools and features. Most notably the program offers sellers with brand protection, more control over product detail pages, and the ability to run sponsored brands ads.
Broad Match Keyword
Broad match keywords offer the widest range of traffic exposure, matching keywords with similar customer search terms in any order. This can also include common misspellings, related searches, and other variations close to the keyword.
For example, the keyword “mens raincoat” could match with customer search terms: “waterproof raincoat”, “coat for men”, “large mens winter raincoat”. While broad match keywords are good for increasing visibility they tend to be inefficient and drive unwanted ad spend. See also phrase and exact match keywords.
BTR – Born to Run
A program intended to help accelerate the launch of a new product. Amazon places a larger PO for a product than they would for one without sales history and gives 10 weeks to sell through the inventory, reserving the ability to return to the vendor if not sold. This program helps ease concerns of launching an ASIN without stock. This program is only available to 1P brands on Vendor Central.
The amount of money one is willing to spend on advertising. Budgets are typically set at the campaign level and reflect the amount you’re willing to spend each day (typically denoted as daily budget in Amazon Advertising Console).
The buy box refers to the white box on the right hand side of the product detail page, where customers can add items for purchase to their cart. The buy box was created to give the customer the best possible value for their money. Since the same product is often sold by many sellers, Amazon will assign the buy box to the seller that offers the best balance of high seller performance and low price.
If there are multiple sellers on a listing you must secure the buy box in order for your ad to be shown. Sellers have the best chance of being in the buy box if they have the lowest price, available inventory, are selling FBA, and have the highest seller rating.
An action that is counted when a consumer interacts with your ad, defined here as a click and it results in a sale. Note: multiple units could be purchased in a single conversion.
Clicks are generated if a consumer is shown an ad and engages with it.
Cost-Per-Click or CPC
Cost-per-click is the average amount of spend per click. The CPC will vary depending on the keywords being bid on, competitive keywords or keywords many sellers are bidding on will yield a higher cost than unique long-tail keywords. CPC is calculated by dividing your total ad spend by the number of clicks for a given period of time.
Sponsored Products, Sponsored Brands, and Sponsored Display ads are CPC ads.
Cost-Per-Thousand-Impressions or CPM
Cost-per-thousand-impressions, is the average cost of what a seller paid to deliver 1,000 impressions of ads. Amazon DSP operates on a CPM basis.
Click-Through-Rate or CTR
Click-through-rate represents the percentage of times consumers were shown an ad and engaged with it. A low CTR could indicate you’re not bidding on relevant keywords or your product page needs improvement. CTR is calculated by dividing the number of clicks by the number of impressions.
Customer Purchase Journey
As a concept, this is the sum of experiences buyers go through when they begin shopping and interact with a company or brand on Amazon all the way through their purchase decision.
Awareness > Consideration > Purchase > Loyalty
Conversion Rate or CVR
Conversion rate is the percentage of customers who clicked on an ad and it resulted in a sale over a given time period. Viewing the conversion rate at the product and keyword level will help you identify areas of success and areas in need of improvement. Conversion rate can be calculated as the number of orders divided by the number of clicks.
Deal of The Day
Like Lightning Deals, Deal of the Day is a timed promotion where a seller offers a number of units at a discount. Deals of the Day run 24 hours, or until the seller runs out of inventory. Sellers can enhance the success of a Deal of the Day by running Sponsored Product Ads concurrently.
A default bid is assigned at the keyword and ad group level by the seller. The default bid should be viewed as a starting bid. It should be proportional to how much a seller plans to spend, factor in the competitiveness of the category, and align with your advertising strategy. Default bid is referred to as the “max bid” in Seller Central/Amazon Ad Console.
Over time you’ll want to adjust your bids based on performance, using third party tools such as Teikametrics Flywheel can automatically calculate and adjust bids for you.
DSP, also known as Amazon’s Demand-Side Platform, enables advertisers to programmatically buy video and ad placements to reach audiences both on and off Amazon. DSP works throughout the whole advertising funnel from awareness to purchase because it allows you to retarget customers, keeping your brand top of mind for past customers and new prospects.
DSP is a managed service that requires a minimum monthly spend of $35,000, third-party servicers, such as Teikametrics can help reduce these minimums. For brands with a smaller budget, Sponsored Display ads are a great alternative to consider.
Exact match keywords are the most restrictive match type but can be more relevant to a search. The search term must exactly match the keyword sequence of words in order for the ad to show, it will also match close variations, such as plurals.
For example, if your keyword is “mens raincoat” the customer search term must be “mens raincoat” or “mens raincoats”.
First-party commonly referred to as 1P, is an invitation only program. Brands invited to become a first-party seller are called Vendors. These vendors will sell their products wholesale to Amazon, who will then resell the product on their platform. Amazon has full control over the product price, inventory, and will typically win the buy box. This is one of two ways Brands can sell on Amazon, the second way is called Third-Party or 3P sellers.
Fulfilled by Amazon or FBA
FBA or fulfilled by Amazon is one of the main fulfillment types for sellers. Enrolling in Amazon’s FBA program enables sellers to be eligible for the Prime badge and all of its benefits including free 2 day shipping and hands-off fulfillment. Your products will be stored in Amazon’s fulfillment centers and they will handle all shipping logistics, returns, and customer service for these SKUs.
These benefits come at a cost. Sellers are charged a fulfillment fee for each item sold, monthly inventory storage fees, and long-term storage fees. Sellers who have the means to do so will opt into Seller Fulfilled Prime to cut down fees and have regained control over their inventory.
Products with the prime badge have increased chances of winning the buy box and typically receive better ad placement in search results.
Fulfilled by Merchant or FBM
FBM or fulfilled by Merchant is the second main fulfillment option for sellers. FBM sellers are responsible for handling all logistics, including shipping, storage, and customer service. While less fees are incurred they are not eligible for the Prime badge, no 2 day free shipping, and they’re less likely to win the buy box.
When products start generating more orders for a search query, it ignites a positive feedback loop called The Flywheel Effect. More orders → improved product relevance → improved organic rank → more organic traffic → even more orders. To get the Flywheel moving faster sellers and vendors will utilize Amazon Advertising. The more conversions a product generates from a search query the more likely Amazon will be to show a product.
Impressions are the number of times an ad was displayed and seen by a consumer.
Keywords are word combinations and phrases you add to and bid on within manual campaigns to specifically target your ads to customers. Depending on your keyword match type, customer search terms are mapped to keywords you enter into your manual campaigns. The goal is to match your ads with search terms customers are using to find your products. There are 4 different types of keywords: broad, phrase, exact, and negative.
A promotion that offers a limited number of discounts over a short period of time. Available on Today’s Deals or the Prime Day page, Lightning Deals are available until the promotion period for the deal ends, or all the deals are claimed. Lightning Deals can boost organic search result ranking, and sellers can run a Sponsored Product Ad to drive traffic to the deal.
Amazon listing optimization is the process of editing a product detail page to improve search visibility, click-through rate and other metrics to help increase sales. The process usually includes keyword research, amendment of the title, description and bullet point text, as well as improving images. Optimized listing pages generally see better page ranking and higher conversion rates. This is also referred to Retail Readiness.
Long Tail Keywords
Long tail keywords are search phrases with longer word counts (4+ words). Due to the length of the keyword these are less competitive and often highly relevant to your product. While search volume can be low on these terms, when searched CPC is low and they usually result in a conversion. An example of a long tail keyword would be “gray fabric toy box with lid” or “large makeup organizer acrylic”.
Max Ad Cost of Sale, or MACS, is a user set input in Teikametrics Flywheel that enables bid automation. MACS communicates with the bidding algorithm a seller’s willingness to spend on their bids. MACS should be set based on a seller’s goals, margins, and current advertising performance.
Managed service is used by brands requiring a certain level of support beyond members of their own organization. Sellers and vendors can leverage the expertise and technology provided by third parties, like Teikametrics, to take on their advertising workload. Account managers handle day to day actions, reporting, and strategy to ensure each brand reaches their goals.
Manual Campaigns enable sellers to choose and add keywords, products, or categories to target shopper searches. Unlike with automatic campaigns, manual campaigns serve ads to a targeted audience that is highly likely to convert into sales. Sellers have the ability to set bids at the keyword level giving them a high level of control over spend and overall performance.
Max bid is the term Amazon uses to refer to the default bid.
Negative keywords are search terms that you do not want your ads to appear for. Sellers will create negative keywords to reduce inefficient spend and improve ACOS by targeting their ads to the most relevant searches. Search terms should be added as negative keywords if they generate a high amount of clicks that don’t convert into sales or if the term is no longer relevant to the product. There are 2 types of negative keywords: Negative Exact and Negative Phrase. To avoid hurting visibility it is recommended to use the negative exact match.
These metrics give sellers and brand owners insight into the customers who have purchased their items on Amazon for the first time, measured over the past year. Using new-to-brand metrics, brands can estimate the cost of engaging new customers on Amazon and identify the most effective channels and tactics to reach even more new buyers. New-to-brand metrics are presently only available through Sponsored Brands campaigns.
Product Attribute Targeting (PAT) campaign is a form of manual sponsored products campaigns that allows sellers and vendors on Amazon to target specific ASINs and/or categories which can be further refined by brand, price, and rating. These campaigns enable shoppers to find a seller’s product by searching categories, products, brands, or features related to their ASINs. These campaigns are very competitive but an effective way to increase impressions, defend and capture market share.
Product Detail Page or PDP
Product Detail Page – the product page on which you land after engaging with a Sponsored Product ad or organic listing. This has all the product’s information, including bullets, images and enhanced brand content, as well as the Buy Box. PDP is also referred to as the product listing.
Phrase match keywords are more restrictive than broad match and will generally result in more relevant placement of your ads. The search term must contain the exact phrase or sequence of words, but it will still target variations added before or after the exact phrase. For example, if your keyword is “mens raincoat” the customer search term will match for “large mens raincoat”, “mens raincoat winter”, “blue mens raincoat large”.
Phrase match types often help you discover relevant long-tail keywords and perform more efficiently than broad match keywords.
Pay-Per-Click or PPC
Pay-per-click is a model of internet marketing in which advertisers pay a fee each time one of their ads is clicked. This is commonly used to drive traffic to product listings and sites, rather than attempting to earn visits organically. Sponsored Products, Sponsored Brands, and Sponsored Display use the PPC model.
A type of automated ad buying based on specific parameters set by the seller. Programmatic advertising uses data to decide which digital advertising spaces to buy and how much to pay for them.
The number of unique Amazon users shown the same ad on any page or screen.
In order to be retail-ready on Amazon, a listing must have all necessary information needed by consumers to make an informed purchase, this includes photos, measurements, titles, bullets and other key information found on a product detail page. This is also referred to as listing optimization.
This stands for Return on Advertising Spend it represents the ratio of your spend to sales. This ratio tells you how much you made in ad sales for every one dollar that you spent on advertising, helping you judge your return on investment. ROAS is the inverse of ACOS. It is calculated by dividing your advertising revenue (sales) by your total ad spend.
A search term is the explicit string of text that a customer enters into the Amazon search bar when searching for a product in the marketplace.
Self-service Amazon ad products can be used by the seller or brand directly, or the seller or brand can work with a provider that offers managed services.
Brands that sell their goods directly to consumers using Amazon’s platform are referred to as Sellers. See Third Party (3P) for more information.
Seller Fulfilled Prime or SFP
SFP is a Prime program that allows sellers to deliver directly to domestic Prime customers from their own warehouse. SFP sellers receive the prime badge and Amazon will handle all customer service inquiries, but the seller is responsible for handling the shipment of all orders.
SFP is desirable because it reduces fees charged by Amazon and allows more control over inventory. However it can still be costly as sellers are responsible for paying all shipping and storage costs, and they must have a warehouse capable of shipping same day orders.
Ships in own Container – FBA sellers or vendors with odd shaped products are required to provide the container for Amazon to ship the product.
Stock Keeping Unit – a unique identification number assigned by retailers to track each individual product.
Subscribe and Save (SnSS) is an Amazon service that allows customers to sign up for recurring, scheduled deliveries of products they frequently use and can receive a discount of up to 15%. To participate in the program sellers must have an FBA account in good standing, Amazon will determine if products are eligible based on product category, selling price, sales performance, and fulfillment history.
Amazon’s self-service display advertising solution that allows brands to target and retarget shoppers both on and off Amazon with auto-generated, product focused ads. You can choose targeting options to allow your ads to run on Amazon desktop and mobile, both on detail pages and other Amazon pages. Ads can also be configured to reach audiences off Amazon across third-party publishers. While similar to DSP, SD offers less customization for audience targeting.
SD ads can be used to build mid-funnel awareness based on interest segments as well as retargeting high-intent shoppers that viewed specific product ASINs. These are often prioritized over SP ads above the fold and are a type of PPC, cost-per-click.
Sponsored Brands ads are designed to increase brand awareness. These ads typically appear at the top of the page on search results and feature a custom headline, the brand’s logo, and one or more products. When a shopper clicks on the ad can be directed to a specific product listing or the Brand’s storefront. Available for brand registered sellers and vendors alike.
Sponsored Products ads are designed to promote individual products on Amazon. Advertisers use SP ads to boost the visibility of their products by targeting specific search terms used by buyers. Depending on the targeting used, ads appear in search results and within product detail pages. Available for sellers and vendors alike.
TACOS stands for Total Advertising Cost of Sale. It provides insights on how your ad spend is impacting your total sales and is an indicator of how heavily your business relies on advertising. It is calculated by dividing your ad spend by your total sales.
While ACoS will give you insight on the effectiveness of your ad spend, it offers a limited scope when evaluating the overall performance of your Amazon business. Shifting your focus to trends in TACOS provides insights on how the actions you’re taking are influencing your long term business goals.
Measuring and understanding your TACOS is relative to your business objectives. If you are launching your brand or a lot of new products, you might see higher, or an increase in, TACOS due to an intentional investment in advertising. If your products are mature you’d expect to see a lower or decreasing TACOS.
When a brand partners with Teikametrics, we take the guesswork out of Amazon advertising in order to ensure success on the Amazon marketplace. Start your Teikametrics Flywheel 30-day free trial or book a demo today.
Third-party or 3P sellers use Amazon’s platform to sell their products directly to consumers. To utilize the platform sellers are required to pay a referral fee or commission to Amazon, typically 15%. Unlike with first-party (1P) brands have full control over product pricing, inventory management, flexible logistical options, and have access to high-quality performance analytics. However, Sellers typically face competition with the buybox. Everyone is eligible to sign up to be a third-party seller. This is one of two ways Brands can sell on Amazon, the second way is first-party (1P).
All sales made on the marketplace, including both ad-attributed sales and organic sales.
Brands that sell their goods wholesale to Amazon for them to sell to the consumer are referred to as Vendors. See First Party (1P) for more information.
A Vickrey auction is a type of sealed-bid auction. Bidders submit bids without knowing the bid of the other people in the auction. The highest bidder wins but the price paid is the second-highest bid. See Amazon Advertising Auction for more information.