How Much Does It Cost To Advertise On Amazon In 2021?
June 13, 2021
What Is Amazon PPC?
With Amazon PPC, advertisers only pay a fee to Amazon when a user clicks on their ad. The advertiser chooses the items to advertise, identifies the keywords to use, and enter their preferred cost-per-click (CPC).
Amazon offers a variety of products to meet different needs. As different companies and individuals seek to market their products, you expect you expect stiff competition.
Amazon provides sellers with several ways to advertise their products. Let us first go through the different ad formats you can use before looking at how much does it cost to advertise on Amazon.
Generally, Amazon ads fall into two different categories:
Self-serve ads function the same way as Google search ads. When you search for products, these ads will feature in the search results.
Premium ads tend to be more of display ads, using graphic impressions to capture users’ attention. Whereas self-serve ads are text-based, these ads come as visual banners, and at times, sidebar ads.
Three types of ads fit into the two categories:
Sponsored products ads
Product display ads
Sponsored Product Ads
Sponsored product ads aim at reaching the most number of relevant leads possible. The majority of sellers use sponsored product ads, making them the most commonly used ads on Amazon. These ads appear on the results page of relevant search queries.
A notable characteristic of these ads is that they rely on keywords, and the most relevant keywords will make your ad appear in the product search results. Usually, you will see the tag “sponsored” or “ad,” which indicates paid content, differentiating it from organic listings.
You can use these ads to increase the visibility of your business. Additionally, you determine your budget because charges will only apply when someone clicks on the ad.
When choosing keywords, there are two options to consider:
Automatic targeting – driven by your products’ content. The information you provide in your product listing determines whether the ad will appear in the results for relevant searches. Amazon matches relevant search terms with the information accompanying your listing.
Manual targeting – allowing you to pick a list of keywords to target for your ad. Although it has a higher cost-per-click (CPC), you target specific keywords, resulting in more conversions.
Initially, these ads were known as headline search aids. They allow you to promote three or more products using one ad. They target keywords that fall in between the specific and general keywords.
You will notice that sponsored brands appear at the top of the results page before any other sponsored ads or organic results. They also use the cost-per-click (CPC) method, with the minimum bid per keyword being $0.10.
Product Display Ads
The pricing of these ads follows the cost-per-click method, and the ads do not target any keywords. The ads target users depending on their interests. Product display ads can appear as products you may be interested in, which you have been considering or may consider buying.
The ads tend to drive traffic to the product detail page, creating more interest in your product.
The Average Cost Per Click On Amazon
The cost-per-click varies based on the specific business you conduct. However, the average cost-per-click on every ad is $0.81. Besides the budget you set aside, the competition for particular keywords determines how much you spend on your ad campaign.
Note that if the keywords are highly competitive, you will pay more. You are more likely to engage in bidding wars with your competitors, pushing the price up even further. The prices will rise far beyond the average cost-per-click.
Before setting up the CPC, consider the amount of money you have set aside for the campaign and what you want from it. Setting a high CPC does not guarantee you fast returns on your investment.
For instance, if you have only $300 to spend on your ad campaign, the best decision would be to set the CPC at $1 rather than $3. $1 will land you 300 clicks, while #3 can only gather 100 clicks. Remember that a higher number of clicks can generate more conversions. Therefore, think about the number of clicks before deciding on the CPC.
Every seller wants to have an advertising campaign that is both effective and profitable. As such, they would need to lower the CPC for every ad. Here are a few ways to lower the CPC:
Research The Keywords
The keywords you choose can help to drive more leads. You want the most relevant keywords for the products in your industry and at a low CPC. Conducting keyword research will enable you to identify the most appropriate keywords to use for your ad.
The good thing is that Sunken Stone can help you carry out keyword research. We have a dedicated team of experts who will assess your products then conduct keyword research for your ad campaign. The keywords we find will help you generate more relevant leads, boosting your sales.
Optimize Your Product Listings
Optimizing your Amazon listings enables your products to earn more valuable leads. Generally, your product listing needs to be informative and catchy to capture the attention of your potential customers. When consumers find your product listing informative, they will most likely buy it.
Optimization involves including relevant information and showing how useful the product can be to consumers. It should solve the problems consumers have. It also involves choosing the right keywords, product titles, descriptions, and several other factors.
At Sunken Stone, we will help you optimize your product listing to generate more meaningful leads, leading to more conversions. We guarantee you results when you partner with us.
Tracking The Performance Of Your Ad Campaign
One way to ensure that your ad campaign is effective is through monitoring its performance. Nobody wants to spend money on an ad campaign that does not generate returns. Tracking the ad campaign allows you to check for optimization, ensuring that you take every step to make the ad drive meaningful leads.
Some of the metrics to use when monitoring the effectiveness of your ad campaign are click through rate and the number of conversions. You can contact Sunken Stone to monitor the performance of your campaign. If it is not effective, we will devise a strategy to improve it and help you generate more sales.
How To Choose A Strategy
Before you choose a PPC strategy to work with, you want to be sure that it will be profitable. You want an effective ad campaign strategy that will help you get more conversions. So what do you do for an effective ad campaign?
Negative-Match Irrelevant Keywords
Sometimes, your ad may appear on searches that are not relevant to the product you are offering. You can direct the algorithm to avoid showing your ad on the search results of certain search terms. It will help your ad become more accurate.
However, be careful not to negative-match keywords that are relevant. It is better to lower the bids for such keywords.
Lower Bids On Relevant, Yet Low-Performing Keywords
If you notice some keywords are not performing well, it is good to check their relevance first. Do not negative-match relevant keywords that are performing poorly. It leaves your competitors with one more keyword to drive traffic from, putting you in a disadvantaged position.
You can try lowering the bids for such keywords. They usually perform better with lower bids. Such keywords are usually broad search terms that are highly competitive since many sellers bid on them. Many buyers search for related products from these keywords.
You can lower the bid by 25%, then check a week later for their performance.
Use Various Match Types In Your Strategy
There exists no rule for which keyword match type to work with; thus, we can use all available keyword match types. They include
Broad Match – your ad shows when someone searches for your keyword terms and related variants. Such variants include abbreviations, synonyms, plurals, and several others.
Exact Match – the ad only shows when one searches for the phrase exactly how it is written.
Broad Match Modified – only for sponsored brand ads (usually Amazon Brand Registered brands). This allows you to specify the words that must appear in the search term for the ad to show. You will add a + symbol before the word.
Phrase Match – this allows the ad to show for the exact keyword amongst several other words.
How To Optimize Your Ads
For an effective ad, optimization may involve the following:
Create Specific Ad Campaigns
Here, you will have to create well-structured ad campaigns. You can classify them by product category, i.e., have distinct ad campaigns for the various product categories, and then have more specific campaigns in each category. You have to ensure that the individual ad campaigns contain all the specific information for distinct products.
Use Popular Brands
If your competitor is a popular brand selling similar products, you can bid on it. It will help you pursue some users and make them buy from your less popular brand.
Being open-minded will allow you to experiment with all three ad types. It will allow you to identify the best performing ad type for your product, after which you can reallocate your budget based on the statistics.
Frequently Asked Questions
How Does Amazon Ad Auction Work?
Amazon advertising works in a unique way, referred to as the second price auction. When bidding, the seller bidding the highest price wins the auction. Subsequently, their products will be displayed at the top of the results page. However, that does not mean that advertisers will pay what the winner of the auction bids. They get to pay what the seller who grabs the second spot bids. For instance, if the winner bids $3 and the second bids $2.70, the winner only pays $2.70.
What Is An Impression On Amazon?
An impression happens when your ad gets displayed for given search terms. Generally, the impressions metric will measure how frequently your ad gets displayed when shoppers search for specific terms. By searching for given keywords, the shoppers trigger the search terms. Remember that no seller pays for impressions but only pays when someone clicks on the ad. The impressions share provides sellers with valuable insights which they can leverage.
How Do I Deal With Fluctuations In My Ad Campaign Metrics?
You can manage your ad campaigns through: • Monitoring the ad performance within seven says to optimize based on recent results. • You can use ‘dynamic bids – down only’ or ‘dynamic bids – up and down for sponsored products campaigns.’ The strategy will lower your id in real-time when the ad seems less likely to make conversions. • Evaluate the keywords leading to more conversions and increase bids on them. Lower bids on poorly performing keywords.