Wayfair sponsored products from A to Z: run your ads like a pro

Want to successfully promote your products on Wayfair, but can’t get a solid grasp on how Wayfair advertising works?


Mi amigo, you are in the right place.


In this article, I’m gonna show you how to use Wayfair Sponsored Products to advertise your listings and generate a positive ROAS (Return On Ad Spend).


You will learn how to navigate the different reports and use them to your advantage.


Like a pro.


When switching from the advanced Amazon marketing ecosystem, you realize how difficult and complex things are.


Wayfair is no exception.


For this reason, I want to share with you a few tricks to make it a little bit easier. Happy reading!



Table of contents:

  1. Wayfair advertising options: Products vs Shops;

  2. Wayfair Sponsored Products: Product Based Sponsorship;

  3. Wayfair Sponsored Products: Keyword Based Sponsorship;

  4. Wayfair reporting and campaigns optimization.


Wayfair Sponsored Products guide
Ultimate guide to Wayfair advertising by Alberto Carniel.




WAYFAIR ADVERTISING OPTIONS: PRODUCTS VS SHOPS




In Wayfair partners’ console, you have two tools to advertise your products: Wayfair Sponsored Products and Wayfair Sponsored Shops.


While the first option is designed to promote single items, the latter allows you to advertise an entire product category or portion of your catalog.


If you have a background in Amazon Advertising, you may compare Wayfair Sponsored Products with Amazon Sponsored Products campaigns and Wayfair Sponsored Shops with Amazon Sponsored Brands.


The image below represents an example of sponsored products:


Wayfair Sponsored Products ad example
Wayfair example of Sponsored Products ads. Note the text "Sponsored" beneath the search results.

You may see this ad type on a product detail page too, but the concept is still the same: one-item promotion.


The image below shows sponsored products and shops together:


Wayfair Sponsored Products and Shops example
Wayfair example of Sponsored Products and Shops ads. Note the text "Sponsored" beneath the search results.

Wayfair Sponsored Shops can also appear in different locations (like at the end of a search feed page) or have various creative formats (for example, instead of depicting just a brand image, they can showcase a series of products).


Wayfair Sponsored Shops on search feed
Example of Wayfair Sponsored Shops ad at the end of a search feed page.

Wayfair Sponsored Shops with multiple products
Wayfair Sponsored Shops example with multiple sponsored items..

Wayfair Sponsored Shops with ad blocker
Example of Wayfair Sponsored Shops publicity blocked by a Chrome ad blocker extension.


KPIs and sales attribution

You may want to use these two advertising options for different marketing objectives.


Sponsored products campaigns work better for the final part of a buyer journey, therefore your KPIs (Key Performance Indicators) should focus on conversion-related metrics.


The first part of the marketing funnel is covered by sponsored shops which aim at brand awareness objectives.


While tackling all stages of a buyer journey including different ad types is usually recommended, you must test the campaigns yourself and adjust the advertising strategy according to your performance.


In general, Wayfair advertising is pretty expensive, so don’t spread your budget over too many campaigns.


You rather want to start with sponsored products and then eventually expand with sponsored shops.


The concerning news about Wayfair ads is that it applies a staggering 14-day sales attribution model on both campaign types.


Daang… 14 days.


An attribution model of 14 days is a lot, and you should consider it while analyzing your ad reports. Such a broad conversion window tends to inflate Wayfair ads performance.


Usually, a 7-day lookback window is more accurate for sales attribution.





WAYFAIR SPONSORED PRODUCTS: PRODUCT BASED SPONSORSHIP




The easiest targeting option for Wayfair Sponsored Products is Product Based Sponsorship.


It basically is a hands-off solution where all the time-consuming optimizations are left to the AI.


For this reason, Product Based Sponsorship is recommended for inexperienced advertisers.


It allows you to pick a product category and select single items from your inventory. Once your products are in the campaign, you can attribute a specific bid to each and this is actually the main optimization feature available (keep reading to learn more).



How to create a Product Based Sponsorship campaign

To create a campaign, select Wayfair Sponsored Products from the left menu.


Wayfair Partner Home screenshot
From Wayfair Partner Home page, use the left menu and click on Wayfair Sponsored Products.

Then, click on Add New Campaign in the How Do I Get Started box.


Add New Campaign Wayfair Sponsored Products
From Wayfair Sponsored Products console, click on Add New Campaign to create a new sponsored ad.

The next step is to name the campaign.


If you follow my blog articles, you should know I’m particularly fixated with proper naming. Especially if you work with a team.


I usually label ads with a Product Based Sponsorship target by using “P -”.


“P” stands for “Product” (= product based targeting).


Product targeting step 1
Product Based Sponsorship, step 1.

In this example, the campaign’s name is “P - Patio Tables”, because I’m going to sponsor patio tables.


I usually don’t set an end date unless the campaign is functional to specific limited promotions.


An AI needs time to fine tune a campaign and so do advertisers with their constant optimizations.


In marketplaces such as Wayfair, Target or Amazon, long term campaigns usually perform better than short term ones.


In general, I recommend setting up ongoing campaigns and eventually reducing the budget instead of stopping them.


The second step is to select the marketplace.


In the example below, I selected wayfair.com which represents the US market. If you want to sell in Canada, select wayfair.ca.


Product targeting step 2
Product Based Sponsorship, step 2.

For the reasons explained before, you should prefer a daily budget rather than a lifetime cap.


According to Wayfair best practices, the minimum suggested daily budget is $50.


Did I tell you advertising on Wayfair is expensive?


Leave Residential Customers as a customer type, unless you want to show your publicity to wholesalers and other businesses. In this case, select Professional Customers instead.


Bonus: if you sell B2B with discounted prices, there is the risk that those companies resell your products on Wayfair increasing retail competition.


If your marketing strategy is to sell retail, I recommend avoiding B2B.


As a target granularity, select Product Based Sponsorship. Wayfair’s algorithm will show your products while customers are browsing similar items.


How can the algorithm properly recognize similar products?


As with almost all algorithms, Wayfair uses keywords and other listing’s settings/signals to link your product with similar ones.


Be sure to do your on-page SEO optimizations before you advertise.


Product targeting step 3
Product Based Sponsorship, step 3.

Finally, select the product category you want to advertise your items in.


You will be able to choose only the categories in which your items are indexed.


For example, your patio tables will be automatically be indexed in the Patio Tables category, so you won’t be able to mix umbrellas with tables.


If you want to advertise products belonging to different categories (or “classes” according to Wayfair terminology), you should create different campaigns.


Product targeting step 4
Product Based Sponsorship, step 4.

Once you have added your products to the campaign, set their bids accordingly.



Bidding strategy

You can start by using Wayfair's suggested bid if you don’t have a specific number in mind.


Here, you can choose between two strategies.


If you have ambitious KPIs, meaning high ROAS expectations or other efficiency-related objectives, you may want to start with low bids and then increase them over time according to the campaign performance.


If you are more focused on sales and less constrained by efficiency-related KPIs, you can start with a bid above the average and then decrease it according to the campaign performance.


I personally prefer to start with a high bid and eventually decrease it over time.


I feel it’s easier to understand when and how much a bid should be decreased after I analyze the campaign report.


However, I’ve been working for a company that requires a ROAS close to 10. The only way to achieve such an ambitious goal is to be cautious with the ad spend (and bid adjustments).


Disclaimer: bidding strategies may vary according to specific internal marketing objectives. For example, if you want to start off a product launch with a bang, you may want to be aggressive with bids.


If you want to know how to optimize a Product Based Sponsorship campaign, read the related section.





WAYFAIR SPONSORED PRODUCTS: KEYWORD BASED SPONSORSHIP




Savvy advertisers may want to use a more advanced campaign type based on keywords targeting.


A Keyword Based Sponsorship allows you to attribute bids to keywords instead of products.


It requires more maintenance, but it gives you greater targeting control and optimization options.


This time, when you create a new sponsored product campaign, use “KW -” to label it.


“KW” stands for “Keyword” (= keyword based marketing).


In the example below, I named the campaign “KW - Patio Tables”.


Keyword targeting step 1
Keyword Based Sponsorship, step 1.

Pick a daily budget starting from $50 and proceed to the targeting granularity section.


Now, it’s time to select Keyword Based Sponsorship.


Keyword targeting step 2
Keyword Based Sponsorship, step 2.

Pick the product category that you want to sponsor (Wayfair uses the word Class) and add your items to the campaign.


The next step is to insert the target keywords in the campaign.



Keyword match types

Before I tell you my two best strategies to select your keywords, you should understand what match type Wayfair uses.


Wayfair uses two keyword match types for ad delivery:

  • Smart Phrase Match: includes search terms that contain your keyword, plus any text before or after. For example, if you bid on Smart Phrase Matches for the keyword “patio table”, your sponsored product ad will appear in search results for “black patio table” or “patio table black”;

  • Smart Exact Match: includes just your keyword and not words before or after. For instance, if you bid on Smart Exact Match “patio table”, your sponsored ad will appear in searches for “patio table” or “patio tables”, but not for “black patio table”.


You should use a Smart Phrase Match to explore the market for new keywords.


It returns a broader variety of results that can be profitable or unprofitable.


In other words, you can see the phrase match as an investment that you must monetize in the future.


How can you monetize your investment?


Well, with a Smart Exact Match.


Once you are sure that a keyword is profitable, you should use it as a target with an exact match.


There is also another case when you should prefer Smart Exact Match over Smart Phrase Match.


If you are selling a very technical product that is described by very specific keywords, you should use a Smart Exact Match to minimize ad waste.


Since your product is very technical, a keyword’s variations may be irrelevant.


Why does Wayfair use the term “Smart”?


You should know that a Wayfair keyword targeting doesn’t only match your keyword with search terms, but also with categories and filters.


To further explain this concept, Wayfair FAQ says that if you bid on the keyword “red rug”, the Smart Match Technology will match it to “red area rug”. In the same way, “farmhouse sink” will match to “farmhouse kitchen sink”.


And this is incredibly annoying.


In my opinion, this is the stupidest and most counterproductive feature ever invented for a keyword based targeting.


I will explain why in the keyword optimization section.



Wayfair keyword research

For most sellers, the best approach to keyword targeting is to start with a Smart Phrase Match and then monetize the investment with a Smart Exact Match.


The first method to find your seed keywords for your phrase match targeting type is to use keyword research tools.


While every keyword research tool is fine (for example, Ubersuggest or Google Keyword Planner), I personally prefer to use Amazon as a keyword benchmark.


According to an eMarketer research published in June 2021, Amazon is estimated to capture 41.4% of the US retail ecommerce market share. While Wayfair is stuck at 1.5%.


Top 10 US ecommerce retailers 2021
Top 10 US retailers ranked by retail ecommerce share. eMarketers, June 2021.

This is the reason why I like to use Amazon customers’ search terms in Wayfair campaigns.


Read my ultimate guide on Amazon keyword research, apply the concepts and then paste the list of keywords in Wayfair advertising console.


With this technique, you should be able to find a list of 20-40 keywords to insert in your Keyword Based Sponsorship campaign.



How to use Wayfair Search Term Research Report

After a while that you are selling on Wayfair, the AI should be able to generate a list of search terms related to your products using organic and ads data.


Wayfair Search Term Research Report
Example of Wayfair Search Term Research Report.

When you download the Search Term Research Report, apply a filter on the Class column.


In this way, you can select a specific product category and check all the associated search terms without the risk of mixing them with terms related to other classes.


Read carefully each search term listed in the Keyword column.


If those search terms are relevant for your products listed in that specific product category (class), you should use them as keywords in the related Keyword Based Sponsorship campaign.


I recommend adding these keywords with a phrase match until your next campaign optimization.





WAYFAIR REPORTING AND CAMPAIGNS OPTIMIZATION




After some time that your campaigns are running, you surely want to check their performance and optimize eventual inefficiencies.


After how much time should I optimize a campaign?


My answer is: it depends.


The higher the ad spend, the more often you should optimize a campaign.


In fact, the more you spend, the faster the campaign generates data.


You want to optimize a campaign as soon as you have enough data to analyze.


In Wayfair Sponsored Products page, click Reporting on the top menu.


Wayfair ads reporting
From Wayfair Sponsored Products console, use the top menu and click on Reporting.

Use the filters to select the campaigns to analyze and a proper time frame.


Wayfair reporting filters
Select all campaigns with the same targeting method and choose a time frame. Then, click on Submit Filters.

Once you submit the filters, the performance graph and table beneath will populate with data.


This represents just a real-time overview of your campaigns’ trend.


If you want to deep dive into specific KPIs, Wayfair makes available a series of reports that help you understand what’s going on with your campaigns.


​Report

Campaign Targeting Type

Report Definition Case

Campaign Report

Product/Keyword

High level metrics for all products in a given campaign rolled up together.

Product Report

Product

SKU level performance metrics for products in your campaigns, that can be used to optimize bids at the product level.

Product-Keyword Report

Keyword

SKU level performance metrics for every product in your keyword campaign. The report shows entire SKUs on Wayfair, the part numbers in the campaign will roll up to the SKU level.

​Part Number Performance Report

Keyword

This gives suppliers the ability to view individual part number performance for KWT campaigns. Some of these metrics are weighted based on the number of orders the part number generated. This also includes performance for part numbers in the same parent SKU that were not sponsored to highlight the residual effect.

Search Term Research Report

Keyword

​List of frequently searched terms by customers in the last 30 days for classes that the supplier has had orders in in the last 30 days. This list helps suppliers identify which keywords to include in keyword targeting campaigns. Suppliers do not need to participate in WSP to access this report but they need to have products sold in that class.

Keyword Optimization Report

Keyword

​Shows the roll up performance metrics of each keyword to help the supplier optimize keywords and match types. This also shows what customers searched or filtered to that matched to suppliers keyword.


Bonus: Wayfair expresses the ROAS in percentage. That’s why you may see high numbers like 400, 800 and so on.


In other platforms and internal reporting, ROAS is usually expressed in decimals, therefore dividing the number by 100.


For example, if your ROAS is 400%, divide it by 100 (= ROAS 4). You will have a more understandable data view.



How to optimize Product Based Sponsorship campaigns

If you have more Product Based Sponsorship campaigns, you may want to select them all before you submit the filters.


In this way, you can download just one report that includes data from all of them.


The Download Report button right above the table allows you to select different detailed insights.


The one I recommend downloading for this campaign type is the Product Report.


Wayfair Product Report example
Example of Wayfair Product Report.

Create a filter for the Campaign Name column, so you can analyze each item belonging to the same ad.


As I mentioned before, you don’t have much control on Product Based Sponsorship campaigns.


The only thing you can do is to adjust a product bid according to its KPIs.


For example, if you have a high CTR (Click Through Rate) and low sales, it means your product detail page must be optimized.


In other words, people are finding your listing and landing on the product page, but they are not completing the purchase.


Usually, the main product image (or cover image) and title are good. If they weren’t, you wouldn’t have observed a high CTR.


So, you must find issues in other sections of the product page or review the SKU merchandising.


Another common scenario is when your ROAS is profitable and you want to increase the ad spend for that item.


In this case, slightly increase the bid, so that the AI will show the ad more often.


Increase the bid progressively unless the ROAS stops increasing.


If the ROAS decreases, it means that your bid is too high.


During a product launch, you might be interested in Impressions over sales (Attributed Orders). At least for the first period of time.


If you don’t have enough impressions, increase the bids.


Do you need assistance with your Wayfair advertising? Explore the opportunity of doing business with me, schedule a free digital marketing call!


In my opinion, the Product Report is the only real useful option offered by Wayfair to optimize Product Based Sponsorship campaigns.


The Part Number Performance Report breaks down the direct performance of all of the part numbers in your campaigns and the indirect sales of other part numbers within the same SKU.


A part number is usually a variation of the product.


However, you can’t control the bid of your product variations and you can just generate this report from Keyword Based Sponsorship campaigns.


The only use that comes to my mind is to check this report when you want to skim your inventory.


You can eventually stop selling unprofitable part numbers after they have underperformed for prolonged periods of time.


Please, if you think that you can actually use the Part Number Performance Report to optimize your ad campaigns, let me know in the comments below.



How to optimize Keyword Based Sponsorship campaigns

The first high level optimization is to periodically adjust the bids of your keywords.


To do so, you can download the Product-Keyword Report which shows the performance of your keywords according to products and match type.


Wayfair Product Keyword Report
Example of Wayfair Product-Keyword Report.

Optimization tactics vary according to your internal marketing objectives, but there are a few general rules you can follow.


The first advertising pillar is the correlation between bids and ROAS.


When ROAS decreases, bids should also decrease to stop ad waste.


When ROAS increases, bids should slightly and progressively increase until ROAS growth stops.


Another general rule regards impressions. When they are too low, you should raise the bids to show your ads to more people.


But keep in mind that low impressions are not only affected by bids.


If a keyword is too specific or simply not popular enough, it won’t generate many monthly searches to be relevant and, consequently, it will have low impressions.


Bonus: while exact match keywords can be profitable or not profitable without a doubt, the profitability of a phrase match keyword is more difficult to define.


As I said before, phrase match keywords represent an investment to find new profitable search terms.


For this reason, bid adjustments must be minimal, especially when decreasing the bids.