How Much Should You Spend on Amazon PPC Ads?

Amazon customers seek new products on a regular basis. To ease their search, it’s crucial that merchants rely on Amazon PPC ads. This is the key tool to showcase your items in the marketplace. 

You may also know them as sponsored campaigns. They are paid ads that target specific users on Amazon, and they only charge per impression. 

That means you can increase visibility and conversions, without breaking the bank.

Today, we’ll take an inside look into Amazon PPC ads. We’ll tell you how they work, and how much you should invest to enhance your revenue.

Let’s dive right in.

What are Amazon PPC Ads?

PPC Ads is short for “pay-per-click advertisements.” When using PPC ads, sellers only pay a fee when a user clicks on their ads.

Amazon PPC ads are among the top marketing strategies for sellers. That’s because sellers can create unique digital billboards to showcase their catalogs.

Once a user clicks on your ad, they’ll go directly into your sponsored listing. You’ll just need to pay a small fee.

The marketplace features 3 types of PPC ads. They can reach target audiences on and off Amazon, and at any stage of the sales journey.

Sponsored Products

The most basic PPC ads target a single item from your catalog. You can find them within product listings, or alongside search results.

One of their key perks is that they offer great control for sellers to target customers.

Sponsored products are available for both kinds of professional sellers. These PPC ads use keywords to target specific items from a seller’s catalog. 

Here are a few interesting sponsored product strategies:

• Catch-all. Use targeted keywords and publish as many product ads as possible. The idea is to leave little space in the search results for the competition.
• Top item defense. This one is about defending your ASIN. Here, you’d focus your ad spend on your best-selling offers. That way, users have fewer chances to find ads from your competitors.
• Substitution. Make your products stand out from similar offers. This strategy pairs up ads promoting related products, such as accessories or new models, with your own listings.

Sponsored Brands

These are customizable ads that highlight up to 3 products in a single banner. 

They are a bit more expensive than sponsored products. But they also come with unique perks:

• Sponsored brands are customizable. You can include unique headlines and your logo to attract followers.
• You can set up carousels to display three offers on a single page. So, you get more ad space and stop other sellers from profiting off your listing space.
• Use them to redirect users into your Amazon store, where they can look at your entire catalog.

Note that Amazon takes 72 hours to approve sponsored brands. 

Other than that, you can set up these ads in the same way as you would with sponsored products.

Sponsored Display 

This is how you can advertise your complete catalog. 

They appear below the Amazon Buy Box, right under the “Add to Cart” button. Plus, sellers can also use Sponsored displays to advertise off-Amazon.  

Sponsored display ads are not keyword-focused. Rather, they’re designed to track a user’s online behavior to improve their conversion rate.

When a customer clicks on your ad, you can then keep promoting your item using the “Amazon Display Network.” 

This means you can ‘follow’ the customer, and showcase new ads on Amazon listings, or third-party sites.

It’s a good idea to pair up display ads with your other sponsored campaigns. This way, you won’t deal with the legwork, and you’ll also double your visibility rate.  

Also, note that sponsored display ads are exclusive to merchants enrolled in Amazon Brand Registry.

Should You Invest in Amazon PPC Ads?

In a word, yes, because Amazon PPC ads not only target general customers. They can also convert users who are ready to buy your products.

Amazon PPC ads rely on keywords to work their magic. These are search terms you can use to target a specific audience online. Here’s the process in a nutshell: 

1. Go to the Campaign Manager in Amazon Seller Central.

1. Select a product you want to highlight with a PPC ad.
2. Choose some relevant keywords to include within the campaign.
   1. For sponsored display ads, submit your target audience.
3. Set up a PPC bid for each keyword.

When a user searches a specific keyword, your sponsored ad will show up on Amazon

search. From here on, customers can click on the image and go to your store.

But the best part about Amazon PPC ads is that sellers get full control of the ad fees. You set the budget, ad placement, and keyword bids. It’s all in your hands!

Amazon PPC Ads Fees

All Amazon PPC ads charge on a CPC (cost-per-click) basis. As we said, that means you’ll only pay for each user that clicks on your ads.

But how does the marketplace set the CPC for each ad? Each seller can submit an ideal price for each click. Amazon then takes those bids to run a pricing auction.

As you can imagine, the highest bid earns the best ad placement. However, said merchant will also pay the highest cost-per-click. The final bid only needs to be $0.01 over the second-top bid.

Such auctions take Amazon’s average CPC as a set reference. Most CPCs go from $0.02 to $3.00. The pricing changes depend on product categories and the ad type you want to run.  

Dynamic Bidding

Amazon PPC ads also feature dynamic bidding. This means the marketplace can modify your CPC bids. Here are the three options available:

1. Down Only. The bid goes down if a bid is not likely to convert users. In rare cases, bid deductions can go as low as 100%
2. Up and Down. Bids with high-conversion potential go up. The rate is up to 100% in Amazon search results, and 50% on other ad placements.
3. Fixed. Amazon deactivates dynamic bidding, so your CPC stays the same.

[Please embed this video from Seller Central]

Seller ads are set to down-only bids by default. The marketplace then adjusts the bid, based on customer behavior and item performance.

Adjust Bids by Placement

The “Adjust bids by placement” can boost a CPC bid (as much as 900%) to three different categories:

1. Top of Search. Sponsored ads appear on the first row of Amazon search results.
2. Product Pages. Ad placements appear alongside product listings or outside search queries. For example, Amazon can also place your ads on the “add to cart” page.
3. Rest of Search. You’ll get placement in Amazon search, but below the “top of search” results.

 

Let’s say you have a $1 bid. In case you select one of the first 2 options, your bid can go up to $10 to earn the placement you want. 

Final Thoughts

Amazon PPC ads are the key to setting up successful marketing campaigns. With these unique tools, you can boost your visibility and sales on and off Amazon.  

Take the time to design unique Amazon PPC Ads. Start off with your best-selling ASINS to reap better results. Then, work your way up to category targeting.

PPC ads are quite the tool for marketing on Amazon. Each type offers a unique chance to reach customers, at any point of the sales journey.

First off, they’re ideal to draw the interest of new users. But most of all, such ads can drive customers to make the purchase they’ve wanted to make for a while.

Such a full-fledged tool will surely drive your conversions, while generating brand awareness. And you’ll get to do it with minimal investment. If you require more help managing your PPC campaign, consider an Amazon PPC management expert“

Best of luck!

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About the Author:

Esteban Muñoz is an SEO copywriter at AMZ Advisers, with several years’ experience in digital marketing and e-commerce. Esteban and the AMZ Advisers team have been able to achieve incredible growth on the Amazon platform for their clients by optimizing and managing their accounts and creating in-depth content marketing strategies.