Should You Be Using Pay-Per-Click Ads on Amazon?

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The goal of pay per click ads is to sell your products online, and one of the biggest online sales platforms is Amazon. The question for many is whether or not you should join the two. Should you be running ads on Amazon? For example, Amazon FBA sellers are earning a living selling on the platform. They want to know if PPC can have a positive impact on their sales and when it has a good return on the investment.

pay per click

Amazon Paid Ads

Amazon paid ads are run on an auction-based model. You’re paying for your products to be advertised or promoted on the site. The higher the bid, the greater the odds that the ad is displayed. However, the less you pay, the lower your visibility. This is true for Amazon PPC bids, too. In the case of Amazon paid ads, you pay for every click on the link. This advertising model is ideal for retail shoppers. However, the most economical model for marketers is PPC advertising on Amazon.

Amazon PPC

In one survey, a third of marketers said PPC was one of the most effective marketing strategies available but was too difficult for most people to utilize. Traditional PPC ads show your ads in relation to search engine results. The upside of traditional PPC is that your potential audience is everyone searching via the search engine. The downside is that you’re competing with every other marketer for the same audience.

Amazon PPC presents your ads in response to customer searches on Amazon. You may not get the most visibility, but it tends to correlate better with your most likely prospects. For example, it is using both organic search and the sales history to determine when your ad appears. You want to structure campaigns and bids to maximize your return on investment.

Amazon PPC typically has a higher return on investment than conventional PPC ads because it increases the visibility of your products to people who are further down the sales funnel. The marketing strategy requires balancing keyword match types to ad types. Amazon allows you to sponsor products, sponsor brands or show product display ads.

There are many benefits to using Amazon PPC. Their ads have global visibility. Every ad is visible on all Amazon apps and Amazon websites. It increases the organic rankings of competitive keywords. You could end up on the first page of search results, dramatically increasing your sales.

An Overview of the Amazon PPC System

Amazon’s PPC goes to the highest bidder. You submit the most you’re willing to pay per click, and if you win, you’re given the highest ad position. The greatest benefit of Amazon PPC is that you’re increasing the visibility of your product. This increases the odds they’ll buy then and that they’ll remember your product when they are done researching options. This is why PPC can and should include your brand name and product names, especially when a new product launches.

A good rule of thumb when determining the right PPC bid is to multiply the advertising cost of sale by the product price by the conversion rate times 1.4. The advertising cost of sale or ACoS is a metric measuring the performance of Amazon sponsored product sales. ACoS is found by dividing ad spending by sales. If you want to learn more about how to manage your ACoS and get optimal results, this case study will give you some actionable tips for your Amazon PPC management.

Amazon doesn’t charge more than the maximum bid you entered. Amazon adds up the total PPC ad costs and withdraws the money from your account. The minimum daily budget for ad spending is a dollar, though Amazon recommends ten dollars so that the ads are seen often enough to be worth it. Amazon doesn’t charge activation costs or subscription fees, and you can kill the campaigns at any time.

Amazon offers in-depth reports to help you measure the success of your various PPC campaigns and help you adjust it to maximize the return on investment.

Conclusion

Advertising on Amazon is an excellent way to dramatically increase sales for relatively little money. The best Amazon PPC campaigns will build brand awareness and keep competitors at bay while moving your product.

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