Are Amazon Ads Worth It?

Most people only think of Amazon as an online retailer (and who DOESN’T spend half their paycheck on prime anymore?) but did you know that it’s also the third-largest digital ad platform in the world – only topped by Google and Facebook? There are over 300 million Amazon users worldwide and more American households have an Amazon prime account than own a gun or attend church every month…which is saying something. 

It’s time to consider Amazon ads.

How do Amazon ads work?

Similar to Google ads, Amazon ads are served based on keywords in a user’s search. Advertisers can bid on specific keywords to increase the visibility of their ads. Think of Amazon ads as the platform’s version of AdWords.

If I was a shopper fully embracing my new work-from-home set up, I might be searching for my new professional attire – a snuggie. The brand Catalonia that pulls up first is a Sponsored Brand ad, and the individual listings in the first row are Sponsored Products. They look just like every other product minus the grey “Sponsored” indicator at the top of the headline.

Sponsored Products

Sponsored Products are the easiest way to get started with Amazon ads. They’re pay-per-click (PPC) ads that are strategically placed to give your products more visibility and purchase opportunity. Because they’re served on a PPC system you only pay when a user clicks through to your product. 

Sponsored Products are visible on individual product pages as well as the search results page. Notice how some of the listings include all of the color options on the image? The goal here is to entice a buyer to leave their current listing to check out your product.


How much do Amazon Sponsored Product ads cost?

Amazon PPC is an auction, but your cost per click (CPC) will only be a penny more than the next highest bidder on a keyword, no matter your starting bid. To clarify, if you bid $2 and the next highest bid was $1, your CPC would be just $1.01 even though your bid – the highest bid – was $2.

While a high bid increases your chance of winning, a lower CPC means a higher ROI. The average CPC on Amazon Ads is $0.71. If you can get a lower CPC than the average CPC of $0.71, you’ll be in a great position with your campaign.

Are Amazon ads right for you?

Do you have a tangible product that people can purchase online? If so, Amazon ads are worth the investment. If you don’t already sell on Amazon, don’t feel pressured to import your entire product line. Do a test with one product you already know sells well on your site. If you start seeing traction with your Amazon ads, you can expand from there.

Amazon Ads 2.0

Amazon Sponsored Brands and Amazon Display Ads are powerful ad tactics as well, but we recommend getting your Sponsored Products dialed in so you can identify your most powerful keywords before you dive in. For Sponsored Brands, we recommend doing this as a secondary tactic after you’ve fully built out your seller presence on Amazon. 

Running a Sponsored Brand ad to a brand that only has a handful of products and even fewer reviews won’t end in conversions. Think of Sponsored Brand Ads like trying to get customers into your physical store. If you don’t seem to offer much, they’ll bounce. 

Amazon Display ads are the only Amazon ads that are served off-platform. Similar to Sponsored Brand ads, you’ll get better traction if your brand is well established on Amazon before you start pointing to it off-site. 

If you’re considering running Amazon ads but aren’t sure how to approach the platform or where to begin, get in touch with us. We’re always here to help.