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Beginners Guide to Amazon PPC

You see all these sponsored Ads on Amazon, but probably don’t exactly know how Amazon PPC (Pay per click) Advertising works.

In this article we will walk you through the basics of Amazon advertising.

  • What is Amazon PPC
  • How Amazon PPC Works
  • Amazon PPC Ad Types

Factors Affecting Amazon PPC Ads

What Is Amazon PPC?

Amazon PPC also known as Amazon sponsored ads are run through Amazon Seller Central – Amazon’s own advertising platform. Amazon Seller Central helps sellers increase their product sales online. Pay-per-click (PPC) advertising is a method wherein an advertiser pays only for the advertisement when a potential buyer clicks and views the product. 

How Amazon PPC Works?

Amazon PPC like every other ad platform has an auction based system to show ads.

The Cost Per Click (CPC) for every ad will always depend on the highest bidder. Each advertiser submits a default bid (the maximum they are willing to pay) for their ad. The highest bidder wins the highest ad position (ad rank #1) and will also pay the highest CPC but only ₹0.01 more than the next highest bid.

In the above scenario, Advertiser 3 wins the bid but only pays ₹35.01 for each click.

On Amazon your average CPC can vary greatly depending on the Amazon product category or subcategory you sell in, and how competitive your niche is.

Based on the user’s search, Amazon matches the right products to show to the user. The sponsored products are shown above the organic results differentiated by a small sponsored tag.

Amazon PPC Ad Types

PPC ads can be classified into three types:

  • Sponsored Product Ads
  • Headline Search Ads
  • Product Display Ads

Sponsored Product Ads

Sponsored Product Ads allow a business to advertise products based on keywords.

Sponsored product ads have the highest click-through rates and sales conversion. They are highly beneficial because they intermix with organic results.

To set up Sponsored Product ads, select the product you want to promote, choose the keyword term, and allocate a budget. Upon doing this, Amazon will target your sponsored ads automatically to the suitable audience.

The key to getting a high performing product ad is to do your keyword research right, and target the right keywords.

Research shows that many businesses have experienced better sales with Amazon Sponsored Product ads than Google AdWords. Moreover, they are three times cheaper than Google CPCs.

Headline Search Ads

A Headline Search Ad is limited to particular product categories. These ads appear on the top of the search results with the brand logo and are also called banner ads.

The headline ads are also keyword targeted, and can be used to promote 3 or more products together.

This Amazon PPC ad offers the largest range of customization. You can choose your brand pages, product pages, search result pages or a custom URL. You can also choose the ad copy and images shown in the ad.

Product Display Ads

These ads are not keyword targeted, but rather interest or product targeted display ads. They drive shoppers to the products detail page and are also priced by a cost-per-click method.

Advertisers can select from a long list of products (for example, similar products to what you’re selling) or interests (for example, if the shopper is interested in running) to target these ads to relevant shoppers.

It’s important to note that each campaign is limited to one target type. These ads can appear to the right or at the bottom of the search results, on the customer reviews page and at the top of the offer listings page.


Factors Affecting Amazon PPC Ads

If there is more than one relevant product for a specific search term, then it is obvious that you will be competing for an ad placement. In such cases, two vital factors decide for the ad placement:

  • Amazon CPC: The highest bid wins it, as he or she is willing to pay a higher CPC than the other advertisers.
  • Quality Factor: The quality of an Amazon ad is measured by the possibility of a potential buyer clicking on it. Now, this majorly takes the ad’s click history into account.

Keep in mind that higher the Amazon CPC bid, the greater are the chances of your ad being placed higher while competing with other advertisers of the same product. Also, “ad quality” plays a key role here. The higher the quality of your ad, the lesser you will have to bid for your ad to appear in the top position.

The Time Is Ripe

Covid-19 has fueled e-commerce growth exponentially. This presents a great opportunity for sellers to grow with Amazon. The novel mix of ad formats, targeting and available inventory makes Amazon a unique channel waiting to be explored and taken advantage of, especially when done right.