The Truth About Amazon Advertising Costs
Amazon is a fantastic place to sell your products and attract more buyers. Millions of shoppers head to the platform every day to purchase items in almost every category imaginable.
There is a lot of competition for sellers, which drives up the costs of Amazon ads unless they have been properly optimized.
By taking advantage of Amazon’s advertising options, you can maximize visibility on your products and reach a wider range of people who are interested in what you’re selling.
If you’re new to selling on Amazon or your business is still on the smaller side, you might be worried about how much advertising will cost and whether it’s really worth it. The truth is, Amazon advertising costs can vary wildly depending on several different factors.
At Urtasker, we’ve worked with brands of all sizes that sell all manner of products, so we know that the cost of ads truly depends on what you’re selling, who you’re targeting, and what budget you have in mind.
Amazon ads work in a similar way to Google Adwords in that the higher you bid (or the higher your budget is per click), the more likely it will be that your product shows up in a relevant search.
How much you spend on your campaigns is entirely up to you, and you can set your budget to be as much or as little as you like. Obviously, a seller who has a huge budget will experience different results from a seller that has a much smaller amount to spend, but it can still be a fruitful way to generate leads.
Product type is a huge cost indicator, too.
For example, if you’re selling something like a t-shirt or television, you’ll experience a much higher rate of competition than if you were selling something a little more obscure. The general rule is that the more listings there are competing for attention, the higher the price will be to advertise similar items.
Amazon Advertising Costs: The Average
Despite there being many different factors that go into determining how much your Amazon ads will cost, there are some guidelines you can go by.
Research has been carried out to identify the average costs of ad campaigns on Amazon, as well as the average cost per click and the average daily ad spend.
Here are some of the most important findings:
The Average Cost Per Click (CPC) is $0.97
The average cost for a click across the board is almost $1. CPC refers to how much it costs when a customer actually clicks your ad, not when a customer simply sees your ad in their feed and scrolls past it.
Amazon CPC is an auction-based process, which means the price that you end up paying is always just a cent higher than the next bidder. If your bid can beat $0.97 per click, there’s a high chance you’ll see good results.
Again, this cost will also be determined by the product you’re selling and its competition. Some products might see an average CPC that’s much lower than this, while others might be much higher.
The Average Daily Ad Spend is $381.48
This is the average for high volume Amazon sellers who advertise on a daily basis. If this seems high, don’t panic – you can always set your budget to a much lower amount and measure your results from that.
Your daily spend is completely determined by you and it can be measured in a number of different ways, including by base keyword cost or by ad groups.
The Average Number of Daily Conversions is 35
Amazon sellers that run daily ads see an average of 35 conversions a day. That’s a pretty decent number, although we can safely assume that this is based on the average daily ad spend listed above. If your daily ad spend is lower, you’ll likely experience fewer conversions and if your ad spend is higher, you’ll probably enjoy a lot more.
Amazon Advertising Costs Aren’t Set in Stone
There is no one-size-fits-all rule for Amazon advertising costs. Here, we’ve simply listed the averages that research has shown, but this can vary dramatically depending on the categories you’re selling in and the keywords you’re targeting.
The amount of competition you have and the budget you can set aside for ads has a huge impact on how much money you’ll spend and the results you’ll reap. If you want to compete with big-name brands for highly-competitive keywords, the cost is going to reflect that. It’ll essentially lead to a bidding war between brands, which will eventually drive up the average CPC.
If you have a limited budget, it can be a wise idea to lower your CPC and target less competitive keywords. For example, if you just have $500 to spend on a campaign, you can set your bid to $1 instead of $5. This means you’ll get 500 clicks at $1 per click or 100 clicks at $5.
It really depends on the goal of your campaign, too. If you simply want to boost brand visibility, going for a higher amount of clicks can work well. However, if you want to get more sales, you’ll need to target keywords that are further through the sales cycle which are often more expensive.
Our team at Urtasker are an expert at running and optimizing successful Amazon advertising campaigns. Our thoughtfully designed Amazon PPC services help individual sellers reach the right people and sell more products without spending over the odds. To find out more about how we can help, book a free 30-minute chat with us at a time that suits you.