The Amazon PPC refers to the pay-per-click advertising model when an advertiser pays for a click on an ad rather than for showing the ad (as in pay-per-impression). PPC has two models: flat rate and bid-based. If you need to set up an ad for Amazon, you’d better go to the amazon ad agency.
- Flat rate PPC is a “flat”, fixed rate. That is, there is a standard price per click, which always remains at the same level. It is not affected by anything, it cannot be changed.
- Amazon (like Google Ads) uses bid-based PPC – i.e. bid-based betting system. It is also called a competitive system. It is not fixed at one level, but can change depending on the competitiveness and frequency of the key, geotargeting, time of display of ads and other factors. Given the settings of bids, advertisers go to auctions.
Bidding Auction Amazon
- The auction allows advertisers to compete for the most advantageous place to display advertising.
- The Amazon Auction works in the same way as the Google Ads, based on the Wickery Auction. It’s all tied up at the highest bid.
- The advertiser in the Bidding settings specifies a bid – the maximum amount that he is willing to pay for displaying the ad.
- The system holds an auction between similar advertisers (i.e. those who compete for the same advertising space).
- Wins the advertiser with the highest rate – he gets the highest position of the ad (ie, the rating of the ad number 1) and pays the highest CPC. This CPC will only be $0.01 more than the next (second) size bet.
Where are the ads shown?
Places where Sponsored Product is shown with key targeting:
- search results;
- Amazon product information page;
- external sites, if they use the Extended Ad Network (Beta);
- Display to retargeting users outside of Amazon who have viewed the product card but have not converted (Beta).
The Amazon Extended Ad Network is a kind of Google Ads analogue designed to enhance the Amazon advertising experience. For a long time, advertising space was limited by the marketplace itself. Amazon Extended Ad Network looks like a logical step to compete on equal terms with the advertising giants Google and Facebook. It was first launched in early 2017. The idea is to show ads on independent sites, their mobile and desktop versions, app versions.
- product page with information about the product;
- to the right of the search results;
- at the bottom of the search results;
- the customer testimonials page and the “Read all reviews” page;
- at the top of the offer listing page (OLP);
- in Amazon-generated marketing letters (e.g., references).
Sponsored Brand is shown on the Amazon search results page:
- on the first screen, which can be seen without a scroll down;
- on one of the 3 locations after the “fold”.
How much does it cost to advertise on Amazon?
CPC on Amazon usually ranges from $0.02 to $3, depending on the category or subcategory of products sold and the competitiveness of the niche. According to AdBadget, the average CPC on Amazon is $0.97. To calculate the campaign budget, you need to do a few things. First, to calculate the profitability ratio before advertising expenses, i.e. to find out the ACOS at the break-even point. This is important to understand how much you can afford to spend on ads to keep them profitable. Secondly, run a test campaign (or several) to evaluate the results at the selected level of bidding. If the campaign is set up correctly but receives few displays, try to increase your bids consistently until you find the ideal cost/scope ratio.