Amazon Comparison
Sponsored Products vs. Sponsored Brands – Amazon PPC Comparison
Overview
Amazon offers sellers multiple PPC (Pay-per-Click) advertising formats to increase product visibility. The two most important campaign types are Sponsored Products and Sponsored Brands. Sponsored Products are keyword-targeted product ads that appear directly in search results and on product detail pages – they target shoppers who already have a clear purchase intent. Sponsored Brands, on the other hand, are brand-focused ads featuring a custom headline, brand logo, and the ability to showcase multiple products simultaneously. They appear prominently at the top of search results and are excellent for brand building. Both formats complement each other perfectly: Sponsored Products for direct lower-funnel conversions, Sponsored Brands for upper-funnel brand awareness and visibility. Finding the right balance between both campaign types is essential for a successful Amazon advertising strategy.
Sponsored Products
Sponsored Products are the most widely used advertising format on Amazon. These ads promote individual product listings and appear directly within organic search results and on product detail pages. They operate on a CPC (Cost-per-Click) model and can be managed through automatic or manual keyword targeting. Sponsored Products are available to all seller types – both Sellers and Vendors – and do not require Amazon Brand Registry enrollment.
Pros
- +Available to all sellers: No Brand Registry required – any seller with a Professional account can start using Sponsored Products immediately.
- +High conversion rate: Since these ads are shown directly to shoppers with purchase intent, Sponsored Products typically achieve the highest conversion rate of all Amazon ad formats.
- +Lower average CPC: Compared to Sponsored Brands, click costs for Sponsored Products are often lower, making it easier to get started with Amazon PPC.
- +Automatic targeting available: Amazon's algorithm can automatically identify relevant keywords and products, simplifying campaign setup and providing valuable keyword data.
- +Diverse placements: Ads appear in search results, on product detail pages, and across various other placements within the Amazon ecosystem.
- +Simple setup and management: Sponsored Products require no creative assets like logos or headlines – the ad is automatically generated from the existing product listing.
Cons
- -No branding element: Ads display only a single product without a brand logo or custom message – brand building is significantly limited.
- -Only one product per ad: Unlike Sponsored Brands, only a single product can be promoted per ad, which limits cross-selling opportunities.
- -High competition in contested categories: In popular product categories, CPC costs can rise quickly as many sellers compete for the same keywords.
- -No link to Brand Store: Sponsored Products direct shoppers exclusively to the product detail page – redirecting to your own Brand Store is not possible.
Sponsored Brands
Sponsored Brands (formerly Headline Search Ads) are brand-focused ads placed prominently at the top of Amazon search results. They feature a custom brand logo, a customizable headline, and the ability to showcase up to three products simultaneously. Sponsored Brands can link to the Brand Store, a custom landing page, or a product list. This format is exclusively available to sellers enrolled in Amazon Brand Registry.
Pros
- +Premium placement at the top of search results: Sponsored Brands appear above organic results and are the first thing potential buyers see.
- +Strong branding opportunities: With a custom logo, headline, and multiple products, sellers can clearly communicate their brand identity and differentiate from competitors.
- +Showcase multiple products simultaneously: Up to three products can be displayed in a single ad, promoting cross-selling and highlighting the product range.
- +Link to Brand Store possible: Shoppers can be directed straight to your Brand Store, strengthening the brand experience and increasing time on site.
- +Sponsored Brands Video: In addition to the classic format, video ads auto-play in search results and achieve significantly higher click-through rates.
Cons
- -Brand Registry required: Only sellers with a registered brand in Amazon Brand Registry can use Sponsored Brands – this excludes many smaller sellers.
- -Higher average CPC: The premium placement and larger ad format typically result in higher click costs compared to Sponsored Products.
- -Lower direct conversion rate: Since Sponsored Brands focus more on brand awareness, the immediate conversion rate is often lower than Sponsored Products.
- -Higher creative requirements: Creating Sponsored Brands requires a brand logo, a compelling headline, and the selection of suitable products – the effort for campaign creation is significantly higher.
- -Longer approval process: Sponsored Brands go through a manual review process by Amazon, which can take several days and during which ads may be rejected.
Comparison Table
| Criterion | Sponsored Products | Sponsored Brands |
|---|---|---|
| Average CPC | Lower – typically EUR 0.20 to 0.80 depending on category and competition | Higher – typically EUR 0.50 to 1.50 due to premium placement |
| Conversion Rate | High – averaging 7-15%, as shoppers with clear purchase intent are reached | More moderate – averaging 3-8%, as the focus is on brand awareness |
| Ad Placement | Within search results (between organic listings), on product detail pages, and other placements | Premium position at the top of search results (above organic results), sometimes also below results |
| Eligibility Requirements | Professional seller account – no Brand Registry needed. Available to Sellers and Vendors. | Professional seller account plus active enrollment in Amazon Brand Registry required. |
| Creative Options | Limited – ad is automatically generated from the product listing (image, title, price, reviews) | Extensive – custom logo, customizable headline, selection of multiple products, video format available |
| Targeting Options | Automatic and manual keyword targeting, product targeting (ASIN targeting), category targeting | Manual keyword targeting, category targeting, no automatic targeting available |
| Typical ACOS Benchmark | 15-30% depending on category – tends toward lower ACOS due to higher conversion rate | 20-45% depending on category – higher due to branding focus, but long-term ROI through brand equity |
| Brand Building Potential | Low – focused on individual product performance without brand elements in the ad | High – logo, headline, and link to Brand Store enable targeted brand building and customer loyalty |
| Ad Formats | Single format: individual product ad with image, title, and price | Three formats: Product Collection, Store Spotlight, and Video ads |
| Recommended Funnel Stage | Lower funnel (Bottom of Funnel): Ideal for shoppers with concrete purchase intent and for maximizing direct sales | Upper funnel (Top of Funnel): Ideal for brand awareness, new customer acquisition, and showcasing the product portfolio |
Our Recommendation
For most Amazon sellers, we recommend a combined approach: Start with Sponsored Products to generate immediate sales and collect valuable keyword data. Once you have a solid data foundation and are enrolled in Brand Registry, add Sponsored Brands to your portfolio to increase brand awareness and differentiate from competitors long-term. As a rule of thumb, we recommend a budget split of 60-70% for Sponsored Products and 30-40% for Sponsored Brands. Sellers without Brand Registry should initially focus on Sponsored Products while simultaneously pursuing brand registration. As an experienced Amazon EU agency, SpaceGoats supports sellers in developing the optimal advertising strategy for their specific market and product category.
Frequently Asked Questions
Can I use Sponsored Products and Sponsored Brands simultaneously?
Yes, absolutely – and that's exactly what we recommend. Both campaign types complement each other excellently. Sponsored Products drive direct conversions, while Sponsored Brands strengthen brand awareness and trust. Combined, they cover the entire purchase funnel and maximize both short-term sales and long-term brand equity.
Do I need a registered trademark for Sponsored Products?
No, Sponsored Products do not require Brand Registry or a registered trademark. Any seller with a Professional Amazon seller account can use Sponsored Products. Sponsored Brands, however, require active enrollment in Amazon Brand Registry, which in turn requires a registered or pending trademark.
Which campaign type has the better ACOS?
Sponsored Products typically achieve a lower ACOS (Advertising Cost of Sales) because they target shoppers with direct purchase intent and have higher conversion rates. Sponsored Brands may have a higher ACOS but provide additional value through brand building that isn't fully reflected in the ACOS. We recommend considering ROAS (Return on Ad Spend) and TACoS (Total Advertising Cost of Sales) as complementary metrics.
How does Sponsored Brands Video work?
Sponsored Brands Video is a sub-format of Sponsored Brands where an auto-playable video is displayed directly in search results. The video (6-45 seconds) promotes a single product and plays automatically when it appears in the visible area of the screen. Video ads typically achieve significantly higher click-through rates (CTR) than static ads and are particularly well-suited for visually communicating complex products or unique selling points.
What is the minimum budget for Amazon PPC campaigns?
Amazon requires a minimum daily budget of EUR 1 for both campaign types. However, for meaningful results, we recommend a daily budget of at least EUR 10-25 per campaign for Sponsored Products and EUR 15-30 for Sponsored Brands. This ensures you collect enough data to make informed optimization decisions. The optimal budget depends heavily on the product category, competitive intensity, and your margins.
Can Sponsored Brands link to my Amazon Brand Store?
Yes, this is one of the biggest advantages of Sponsored Brands. You can direct shoppers straight to your Brand Store, where they can discover your entire product range – without distraction from competitor offers. The Store Spotlight format was specifically designed for this and displays various Store sub-pages within the ad. Sponsored Products do not offer this capability – they link exclusively to the product detail page.