If you sell on Amazon, you’ve likely heard about Amazon pay-per-click (PPC) advertising. There’s a buzz around Amazon PPC and its immense benefits to ecommerce sellers if you know how to create profitable and effective campaigns.
PPC campaigns increase the visibility of your brand and drive more sales. But a few online retailers are still confused about its usage, “Does it actually work, or is it just a fad?”
Amazon is an ecommerce giant, and its services are endorsed by top sellers and brands globally. It offers authentic strategies to help businesses grow and thrive in the growing digital world.
Amazon PPC is yet another advertising model that offers sellers an opportunity to reach their target audience and drive sales utilizing relevant keywords that accurately describe their product.
What Is Amazon PPC?
Amazon PPC is an advertising technique that allows retailers to create and run ad campaigns for their products. This, in turn, boosts their brand visibility and generates sales. Any third-party seller wanting to utilize the service pays Amazon when a buyer clicks the ad.
It’s safe to say that running ads allow sellers to “purchase” the visibility of their products in the top search results on Amazon. That is why there are “Sponsored” product listings and even Sponsored brands who pay extra for top visibility.
Many online sellers who do not build their own websites turn to online marketplaces. Amazon, being a massive ecommerce site, offers an opportunity to upload products and begin selling right away.
Therefore, many sellers join the platform in hopes of driving sales. Unfortunately, not everyone benefits from it due to lack of foresight and poor planning.
The sellers on Amazon are leveraging each passing day. Therefore, it’s incredibly challenging for you to achieve your business goals without an effective PPC plan.
Common Amazon PPC advertising types include:
- Sponsored brands. Ads that allow brands to build and promote their company. It may include the brand logo, products, and a customer headline in top Amazon search results.
- Sponsored products. It enables brands to promote individual products in Amazon search results. Currently, they are the most popular ad types on Amazon.
- Sponsored display ads. These ads aim to direct customers to Amazon product detail pages. They send relevant ads to shoppers on Amazon and external sites who visit particular products on Amazon.
A well-managed and optimized campaign opens a gateway to amplify product visibility and sales.
How Does Amazon PPC Work?
The Amazon pay-per-click is pretty simple to understand. Each marketer looking to advertise their brand or product sets a bid and competes to get an ad spot. Nonetheless, note that the bid submitted by the highest bidder is not essentially the cost per click.
For instance, consider you have a $3.00 bid for a particular keyword, and the second-highest bidder has a $2.50 bid. Because you’re the highest bidder, you’ll likely win the ad spot, but you won’t need to pay $3.00.
Instead, you’ll only have to pay $0.01 more than the second-highest bidder. Simply put, you’ll end up paying $2.51 instead of $3.00.
This indicates that the CPC of a keyword depends on the highest bid, but it doesn’t necessarily have to be the one always.
Why Should You Use Amazon PPC?
Advertising is not the first thing that springs to our minds when we think of Amazon.
Nonetheless, the platform has become the hub of advertising in recent years. Data unfolds that Amazon generated a 58% revenue in 2021 on the value of 31 billion – more than 19.8 billion US dollars in 2020.
While Amazon certainly hasn’t outshone Facebook, Google, and Instagram, it has shown tremendous growth over the years.
What’s the reason behind this craze, and what magnetic force drives marketers to Amazon PPC? A closer look at its benefits will reveal the answer.
Return on Investment
Return on investment speaks volumes about your ecommerce business growth. Fortunately, Amazon PPC offers an excellent ROI. Amazon, being a search engine and a retail platform altogether, gives you active buyers.
Users typing search terms into the search bar are looking to buy items you sell. This indicates that they genuinely intend to complete a purchase. On finding the right product, they’ll buy it and may turn into your loyal customers.
So, a user searching for a product on Amazon is more likely to convert than anyone finding it on other search engines. Your ads play a vital role in encouraging customers to make a purchase.
Shifting Consumer Trends
COVID-19 shifted consumer trends tremendously. Today, customers seek greater convenience when it comes to online shopping. For this reason alone, retailers seek varying strategies and practices to keep up with the evolving consumer trends.
Amazon’s revenue from $69.98 billion in 2019 to $96.15 billion in 2020 – the pandemic year – is proof of changing consumer trends.
Luckily, Amazon PPC offers an opportunity to become more visible to customers online. A brand ad increases awareness and encourages customers to purchase from your company.
Targeting the Right Customer Base
Consumer trends change dramatically and aren’t expected to slow down anytime soon. The shift in consumer behavior has continued post-pandemic, and more customers prefer purchasing products online than visiting brick and mortar stores.
Amazon also has an active customer base that keeps growing every year. The Amazon PPC gives you a chance to target your ideal customer base. So, while you might need to pay a tiny amount to run a PPC campaign, it pays back significantly – if executed the RIGHT WAY.
But what’s the right way? Launching a PPC campaign when the time is right and gathering actionable data!
Keep in mind optimization takes time. So, you need to keep an eye on your Amazon PPC campaign(s) to experience positive results. Ads in your campaign can be altered as you receive more relevant data. For example, some keywords may be performing far better than others, and at a fraction of the cost per click. Allocate more of your PPC advertising budget to those optimal keywords.
A few sellers also question the appropriate time to launch the PPC campaign. Unfortunately, there isn’t a definitive answer to this. You should, however, run the ad immediately after creating a new listing, given you are happy with it and the listing is optimized with an SEO-friendly searchable product description, keywords, bullet points, and at least five product images.
Wrapping Things Up
There’s a lot to learn about Amazon PPC, but you must familiarize yourself with the basics as an Amazon seller. It is not easy to outpace competitors on an ultra-competitive platform like Amazon.
However, Amazon PPC gives a ray of hope, among other marketing efforts, to earn a spot in Amazon’s top rankings and convert customers.
Further, read blogs, articles, newsletters, and Amazon seller-related YouTube channels to get your hands on the latest Amazon PPC information and maximize your advertising efforts.
