Businesses need exposure to grow, especially those just getting into the game, but some business owners hesitate to invest in their marketing budget. While paid ads on sites like Amazon can be expensive, they’re the quickest way to scale your business if you have the right strategy.

Everyone is feeling the weight of rising prices in 2022, and one of the most troubling hurdles for advertisers is the growing cost of pay-per-click ads. Given this inevitable inflation, are Amazon ads worth it?

Amazon Advertising in a Nutshell

Compared to its competitors, Amazon comes out on top in making sales from advertising. If you can learn the ropes of advertising on the biggest eCommerce site in the world, you can join the ranks of businesses growing and making a profit with their ads. Let’s look at the three main types of advertising on Amazon.

Sponsored Products

Have you ever noticed the first few products in Amazon search results have a little “Sponsored” tag next to them? Those are sponsored product ads. Sellers bid on keywords and only pay when someone clicks on their ad.

This method is known as pay-per-click (PPC) advertising. Customers who search keywords relevant to your products will see your ads, and you can set a budget to prevent overspending on PPC.

Sponsored Brands

Sponsored brand ads appear as banners in the search results for specific keywords. Instead of focusing on a single product like sponsored product ads, this ad features your brand’s logo, a custom headline, and a showcase of multiple products.

Sponsored Displays

Unlike the other two types of ads, sponsored displays aren’t keyword-driven. Instead, they analyze customers’ interests to decide where to show your ad. The ad’s content is typically an eye-catching image with copy that entices shoppers to click on the product.

Running Successful Ads on Amazon

Advertising on Amazon is worth it for most businesses, but you’ll have to do more than throw money at it. While Amazon’s ad management system is relatively simple, developing a sound strategy for your advertising campaign is crucial. Thoughtful planning ensures you’re spending money wisely and getting a respectable ROI.

Profit Margin

You could spend more than you earn from advertising if you’re not careful. When looking at your profit margins, factor in the product costs, Amazon service and fulfillment fees, and the advertising spend. Ensure that what you’re getting back outweighs what you’re putting in.

Budget

Many people want to know exactly how much to spend on Amazon PPC advertising, but it varies widely between sellers. If you’re new, it’s best to start slow and work your way up as you get more data.

When bidding on Amazon ads, choosing the dynamic bids (down only) option might be best. This allows Amazon to lower your bid if it’s unlikely to convert so you only spend money when there’s a better chance of getting a return.

Target Keywords

Part of building a good advertising strategy is identifying your target keywords. Amazon’s automatic targeting gives you plenty of data to start whittling down your list of keywords. It works by analyzing your product title and description to choose the best keywords for advertising your goods.

Keyword Analysis

Once your campaign has run for a while, you can check Amazon’s built-in advertising report to start nailing down a strategy. The report gives you the list of your keywords and a breakdown of impressions, clicks, conversions, and advertising cost of sales (ACoS). Analyzing this information allows you to decide which keywords get the highest-quality traffic and which ones hurt your ROI.

Negative Keywords

Making good use of negative keyword targeting can have a significant impact on the efficiency of your budget. When you add negative keywords, it tells Amazon to exclude them from your advertising. You can use this function to stop spending money on low-performing keywords that get low click-throughs and conversions.

How Amazon Ads Impact Your Marketing Strategy

It’s safe to say that advertising on Amazon adds considerable value to your brand’s marketing strategy. People who visit Amazon and search for products have the intent to buy, meaning they’re already halfway down the marketing funnel. This means higher click-through rates, more conversions, and increased revenue.

Boost Brand Awareness

You’ll be drowning in competition when you start selling on Amazon. With so many other businesses to beat, you need a way to get a leg up. Amazon ads put your products at the top of search results when you pay for sponsored product ads, giving you a massive boost in brand awareness.

Improves Product Ranking

The algorithm that Amazon uses to place your products in the search rankings analyzes your product titles, click rates, conversion rates, verified reviews, and descriptions. Since sponsored ads boost many of those factors, your ranking will naturally improve because of them.

Increases Revenue

Amazon ads perform extremely well for increasing sales since most people seeing your ads are searching with the intent to buy. The average cost of Amazon PPC advertising is $0.81, resulting in a daily spend that’s typically much less than your daily earnings.

Lighter Workload

Unlike Google PPC advertising, Amazon doesn’t require you to create new copy for your sponsored ads. The site uses your existing product description so you won’t have to spend more time and resources marketing your products. And because you can manage your Amazon ads in Seller Central, you won’t need to make a new account or download extra software.

Scale Your Business With Amazon Advertising Expertise

With the rising costs this year, are Amazon ads worth it? The answer for most businesses is a resounding yes. Sponsored Amazon ads can catapult your business by putting your products in the spotlight. Click Fluency knows the struggle of being a seller on Amazon. We want to use our knowledge of the system to scale businesses for everyone else getting lost in the eCommerce jungle. Schedule a free discovery call with us today.