If you're a seller, there's one path you can't overlook: Amazon Sponsored Product Ad Placement.

This article aims to decipher the complexity of this ad placement model and offer insight into its critical role in the success of an Amazon-based business.

What is Amazon Ad Placement Sponsored Product?
Sponsored Product is the ad you create to promote your product and Sponsored Product Ad Placement is where that ad appears. You can think of Sponsored Product as the "what" and Sponsored Product Ad Placement as the "where."
When you create a Sponsored Product campaign, you have the option to set your ad placements manually or automatically. Placement is crucial because it determines how visible your ad will be to potential customers. For example, a Sponsored Product ad at the top of the search results is more likely to be seen and clicked on, but may also cost more per click than ads in "Rest of Search Results" or "Product Page" ads.

Types of Amazon Ad Placements

Top of Search Placement
Being at the top of the search results in ad placements on Amazon offers significant benefits, but also comes with some challenges. Ads in this coveted spot are the first thing customers see when they initiate a search, giving your product high visibility. This placement is particularly effective for attracting customers with high buying intent, as they actively search for specific products. The top spot also helps build positive brand awareness, as customers often equate products that are at the top with quality and relevance.
However, the cost of securing this top position can be high, with higher cost-per-click (CPC) rates compared to other ad placements. Furthermore, to maintain this top position, a well thought out keyword strategy is necessary, otherwise you risk wasting your ad budget on terms that do not convert.

Top of search and rest of search ad placement

Rest of Search Placement
Rest of Search placements offer a visibility advantage over relying solely on organic search results, even with a lower click-through rate compared to top-of-search placements. These placements generally come at a lower cost per click (CPC), making them a cost-effective option for gaining some level of visibility without a significant investment.
While engagement is limited by their location below the fold or on subsequent pages, they do capture "tail-end conversions" from users who scroll down for more options, making these placements especially useful for niche or unique products. This means you can still attract sales from customers who approach their purchases more deliberately and are willing to search beyond the first search results.

Product Page Placement
Placements on product pages provide targeted exposure by appearing on pages with products similar to yours, attracting the attention of customers already interested in a similar product. This setup encourages comparison shopping, as customers can easily weigh the features and price of your product against those of the product they are currently viewing. If you offer a range of products, these placements also serve as a tool for upselling and cross-selling, potentially expanding the customer's shopping cart.
Product page placements are usually less expensive than 'Top of Search' placements, making them a cost-effective way to reach targeted audiences. However, it is important to note that customers viewing these ads are often in the 'consider' stage, rather than the 'buy' stage, and therefore may be less inclined to make an immediate purchase.

Product page ad placement

How to Adjust Bids Based on Amazon Ad Placement.
In Amazon's Sponsored Products campaigns, search placement bid modifiers, also known as placement multipliers, allow advertisers to adjust their bids for Amazon product placements. These modifiers work in percentages and are in addition to your base bid for specific keywords.

How Product Placement Multipliers Work.
For example, if you set a base bid of $1 for a keyword and then apply a placement multiplier of 50% for 'Top in search,' your bid for that particular placement would be $1.50. In contrast, if no multiplier is set for 'Page with product details,' your bid for that placement would remain at the base bid of $1.

How Different Bidding Strategies work with Ad Placement multipliers
Placement multipliers can work with Amazon's different bidding strategies such as Fixed bids, Dynamic bids only down and Dynamic bids up and down.

Fixed Bids
With a fixed bid strategy, if you set your base bid at $1, Amazon will use this $1 bid for all auctions you participate in, regardless of where your ad will appear (Top of Search, Product Page or Rest of Search).
Example: If you set a placement multiplier of 50% for Top of Search, your bid for that placement will be $1.50. Amazon does not adjust this bid; it remains fixed unless you manually change it.

Dynamic Bids - Down Only
With this strategy, Amazon can lower your bid based on the likelihood that your ad will convert. Suppose you set a base bid of $1 and a placement multiplier of 50% for Top of Search, making the bid $1.50 for that placement.
Example: If Amazon's algorithm predicts that the click is less likely to convert, the bid is reduced to $0.75. The placement multiplier is applied first, so the bid that can be reduced is the $1.50, not the base $1.

Dynamic Bids - Up and Down
In this adaptive strategy, Amazon increases or decreases your bid based on the likelihood of conversion. You start with a base bid of $1 and set a placement multiplier of 50% for "Top of Search," making the bid $1.50 for that placement.
Example: For 'Top of Search,' Amazon can increase your bid of $1.50 by up to 100% if it thinks the click is likely to convert, raising the potential bid to $3. Conversely, if the algorithm thinks the click is less likely to convert, it can lower your bid of $1.50.
Bidding strategies and placement multipliers in Amazon Sponsored Products campaigns work together to optimize the performance of your ads for different Amazon product placements.
Let's say you sell hiking boots and set a base bid of $1. You also decide to use Dynamic Bids Up and Down with a 50% placement multiplier for Top in Search.

Initial bid: Your base bid for "Top of Search" will be $1.50 after applying the 50% multiplier.
Dynamic adjustment: Amazon's algorithm can increase this bid to $2.50 if it thinks a conversion is very likely or decrease it to $1.25 if a conversion is less likely.

The synergy between bidding strategies and placement multipliers offers advertisers both control and flexibility. By using both effectively, you can not only compete more aggressively on high-value placements, but also save budget in areas where conversions are less likely, maximizing your overall ROAS.

Maximize Top-of-search ad placements.
When a keyword performs well, increasing its bid can indeed improve its ranking in organic search results. In this case, expensive top-of-search ads may no longer be as necessary. Moreover, if not managed carefully, an over-reliance on top-of-search ads can cannibalize sales that would otherwise come from natural search results. Therefore, extensive consideration of multiple factors is required when employing this ad strategy to achieve the optimal balance between ad spend and sales revenue. Here are some situations where you should stop high bidding to achieve top-of-search placement.
It's also important to track both ACOS and TACOS statistics; a drop in ACOS without a corresponding TACOS drop could mean your ads are undermining organic sales. If an ASIN already ranks high in organic results, consider reallocating your ad spend to boost other products.

Other Sponsored ads Strategies
Amazon Video Ads Format Guideline: Everything you need to know about Amazon video ads
A complete guide (2023) to creating Amazon Sponsored Video ad campaigns
How to run efficient Amazon PPC Ads campaigns.