Let’s talk about Amazon. Amazon is quite the company. With so many different products, a competitive membership program and an ad platform for advertisers, what can’t they do?
While more customers are turning to Amazon and online websites in general to make a purchase, it makes sense that more advertisers want a piece of the profit pie. They are representing up to several brands after all.
Together, we’ll look at Amazon advertising costs and the process of the advertising process itself. So when you choose to advertise on this highly sought-after company, you’ll not only be able to better understand the costs but also be able to maneuver around the platform seamlessly.
Time to jump in!
This is How Amazon Advertising Works
Did you know that in 2017 the ad spend reached a total of $3.4 billion? And that number has only grown in the last three years.
First, it’s essential to know that there are several different ways to advertise on the platform. Let’s look at the main two.
Self-Serve Ads: These are area ads that actually function similarly to Google search ads. They’re great for seeing search results for products.
Premium Ads: This type of ad acts more like a display advertisement. They are able to appear as visual banners and sidebar ads.
With that said, let’s look into all of the different types of ways ads on Amazon are able to appear.
- Sponsored ad products
- Sponsored brand ads
- Product display ads
- Visual banners
- Sidebar ads
- Headliner ads
What is the Average Cost Per Click on Amazon?
Of course this is a cost bound to vary per advertiser. However, on average advertisers spend about $0.81 for every click on their ad.
For every advertiser one thing is certain. Each advertising cost will depend on the competition and budget. When competing for highly competitive keywords, advertisers can alway expect to pay more to secure their spot. A lot of time there will also be a bidding war that will definitely drive up the price. And with that, it can be pretty easy to go above and beyond the normal average.
Before doing this though, simply analyze and ask yourself if it’s worth it. If not, then make sure to revisit the campaign and keywords for more effective and profitable advertising.
These are the three ways to help lower the CPC.
- Choose the right keywords
- Optimize product listings
- Monitor your campaign’s performance
What is the Average CPM on Amazon?
This will also vary for advertisers too. However, what’s good to know is that on average there are a total of 101,265 impressions per user per day on Amazon.
With this, advertisers will be able to factor in the CPC and then determine the final costs. To drive up these impressions it’s vital to learn how to drive up both organic and paid traffic. When that traffic starts to mature, it’s best to move over to the mor organic side as paid will be less needed.
Amazon Advertising Minimum Budget
What gives Amazon such a competitive advantage is that there is no actual monthly fees or minimum ad spend required. They make it that simple!
Advertisers are only charged when customers click on the ads and are taken to the website. All are able to control the maximum prices that brands are willing to pay for that initial click and the overall daily budget. With this freedom, advertisers are able measure the return on investment and optimize the budget accordingly.
How Does Amazon Ad Auction Work?
So, how does it really work? Believe it or not, bidding on Amazon advertising is a second price auction. For advertisers this means that the seller who bids highest on a keyword will win the auction and ultimately have their ads displayed at the top of the search. Pretty cool, right?
Advertisers also only pay what the seller who came in second place bids.
For instance, if the winner bids $1.50 but the second place bidder bids $1.25, then the winning advertiser only pays that $1.25.
What Determines Amazon Advertising Costs?
Keywords. The more competitive a keyword is listed to be, the more money advertisers should plan on spending. To be able to fully control the budget for the advertising campaign, it’s essential to take a full look at the positioning of that campaign as well as the keywords chosen.
How Does Amazon Compare to Other Platforms
Let’s look at Amazon and Google as they are both the main competition for each other.
If we were to compare Amazon to Google, advertisements on Amazon will actually rank based on their total profit. On the other hand, Google ranks based on the click-through-rate of the initial ad.
Looking at similarities, however, Google and Amazon offer different services with the actual operations to be super similar.
Are Amazon ads going to be in your future?
Amazon has a huge influence in the industry, and it’s especially important to advertisers who are trying to get their products out to a mass audience for the opportunity to have a higher ROI. By considering this platform as a place to run a campaign, you’ll have access to a ton of resources as well as be able to bid how much you’re comfortable with spending.
This is a company perfect for expanding the target market and demographic. With so much exposure on a new or existing product and the right campaign execution, brands have a much higher possibility to increase their sales significantly.
Have you already used Amazon ads? Let us know what you think of the results and if the cost is worth the return on investment.