Amazon is one of today’s most popular shopping platforms, with consumers across the globe logging on to browse, research, and purchase products. eCommerce businesses in virtually every industry are quickly catching on and signing up for seller accounts. This has created a lot of competition in the Amazon marketplace, which includes more than 12 million products. Therefore, sellers need to be strategic to maintain a competitive edge.
One of the best ways to ensure your brand and its products stand out on Amazon is through Amazon Pay-Per-Click (PPC) advertising. Below, we’ll discuss everything you need to know about Amazon PPC, so you can create campaigns that boost your sales and help you reach your business goals.
What Is Amazon PPC?
Much like Google and Facebook, Amazon offers an ad platform called Amazon Campaign Manager. This allows sellers to run paid ads to build brand awareness, generate sales, drive traffic to their Amazon Stores, and more. Amazon Campaign Manager is the third-largest advertising platform behind Facebook and Google, making it an essential tool for eCommerce businesses.
How Amazon PPC Works
When running an Amazon PPC campaign, advertisers pay each time a user clicks on and views the promoted product. To set up an Amazon ad, sellers must first choose between three ad types. These include:
Sponsored Product Ads
Sponsored product ads promote a single product and feature a “sponsored” notation above the product name to let shoppers know that the listing is a paid advertisement. These ads appear in four locations on the Amazon search results page:
- At the top of search results
- Alongside search results
- Within search results
- On product pages
Sponsored products perform well in terms of click-through rates and sales conversions because they look like organic search results. Plus, they target specific, product-related keywords, which help to ensure that ads are relevant to shoppers’ search queries.
Product Display Ads
Similar to sponsored product ads, product display ads allow sellers to promote a single item. However, they appear on product pages below the “add to cart” section. They can also show up on third-party websites and apps. Product display ads do not use targeted keywords. Instead, Amazon utilizes machine learning to automatically place ads based on relevant shopping activities and your chosen audience targeting. For example, ads can target shoppers who have viewed the sellers’ product pages or similar items in the last 30 days.
Sponsored Brand Ads
Formerly called headline search ads, sponsored brand ads promote up to three products as well as a brand logo and message. They appear above, alongside, and within organic search results. These types of ads are keyword-based, allowing advertisers to target shoppers who are actively searching for related products. This is a great way to build top of funnel awareness and drive users to your Amazon store.
Requirements to Run Amazon PPC Ads
Amazon is selective about who can run paid ads through the Amazon Campaign Manager platform. Therefore, it’s important to make sure you meet the following requirements before creating your campaign:
- Active Seller Account – Advertisers must have an Amazon seller account in place before running ads.
- Enrollment in the Amazon Brand Registry – Advertisers who want to run sponsored brand ads must register their company with the Amazon Brand Registry, which helps to protect intellectual properties and enhance user experiences.
- Shipping Capabilities – Sellers must be able to ship their products anywhere in the United States.
- Buy Box Eligibility – Advertisers interested in running sponsored product ads must meet the Buy Box eligibility requirements. These include having a professional seller account, showing metrics for cancellation rates, order defect rates, etc., and maintaining stock availability.
How Much Does Amazon PPC Cost?
Like other types of PPC campaigns, the cost of advertising on Amazon varies. This is because Amazon utilizes an auction format, meaning that you must outbid other advertisers to secure ad placement for a specific keyword. However, even if you bid much higher than other sellers, you won’t necessarily pay your winning bid. Amazon operates on a “second price” auction, which means that winning bidders pay $0.01 more than the second-highest bid.
Imagine this: Three advertisers (Advertiser A, Advertiser B, and Advertiser C) bid on one keyword. Advertiser A bids $3.50, Advertiser B bids $3.25, and Advertisers C bids $4.00. In this scenario, Advertiser C would win the auction. However, they wouldn’t pay $4.00 per click. Instead, they would pay $3.51 – one cent more than the next highest bid.
The cost of your Amazon PPC campaigns will also depend on the ad types you run. Sponsored products and sponsored brands both have a minimum budget of one dollar per day, while product display ads do not have a minimum daily spend.
Why Invest in Amazon PPC?
Thousands of new businesses open Amazon accounts each day, which means that you need to do everything you can to stay a step ahead of the competition. Amazon PPC ads are an effective solution, allowing you to increase visibility for your product listings, drive more sales, and build brand awareness.
Below are just a few benefits of Amazon PPC advertising:
- Wider Customer Reach – Amazon has more than 197 million monthly users. Therefore, when you run Amazon PPC ads, you can get your brand and its products in front of millions of potential customers.
- Cost-Effective – With Amazon PPC, you’ll only pay when a user clicks on your ads. This option can be much more affordable than cost per impression (CPM) advertising. Additionally, there are no activation costs or subscription fees required to run campaigns.
- Improved Organic Rankings – Unlike Google ads, Amazon PPC campaigns can influence your product’s organic rankings on the Amazon marketplace. Generally, the more sales you receive from PPC ads, the better your rankings will be.
Want to Boost Your Sales on Amazon? Zero Gravity Marketing Can Help
Amazon Campaign Manager can be a powerful tool for sellers looking to drive sales and increase brand awareness on the Amazon marketplace. However, running a successful campaign requires a well thought out strategy and a solid understanding of Amazon PPC best practices.
If you would like to start advertising on Amazon but aren’t sure where to begin, look to the experts at Zero Gravity Marketing for assistance. Our paid media team can create strategic Amazon PPC campaigns that help you reach your business goals.
For more information about our Amazon Marketing services, contact us today!