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How Much Does Amazon Advertising Cost You in 2022?

By Anastasiia Lavrova | 7 June 2022 | 9 mins read

Amazon spent over $11 billion in 2020 to advertise its eCommerce site to people worldwide. And this is billions of dollars marketing a platform that most consumers are already acquainted with. In that case, it seems sensible that sellers advertise their products too. But how much does advertising on Amazon cost, and is it worthwhile?

Amazon Advertising Fees

The cost of Amazon advertising is determined by several factors. Competition among advertisers, for example, might influence prices for specific keywords or product categories. The overall budget of a seller impacts how much they pay for each click.

Ad Bidding Process

Sellers should learn about the ad bidding process to better grasp how much advertisers pay for ads on Amazon. Advertisers compete for the top spot of a search phrase on Amazon using an auction mechanism. On the other hand, the second-highest bid determines the cost-per-click for all other advertisers.

Consider the case when the successful bidder is willing to pay $2 per click. On the other hand, the second-highest bidding vendor will only accept $1.60 per click. Rather than paying $2 each time a buyer clicks on their ad, an advertiser will only pay 1 cent more than the second-highest bid, which in this case is $1.61.

How Much Does Amazon Advertising Cost You in 2022?

Average Rate of Amazon Cost-Per-Click (PPC)

While purchasers pay $0.81 per click on average, the price is anticipated to rise due to the expensive advertising options. According to one survey, retailers usually pay more than $0.35 for each click. Amazon advertisements are more cost-effective than Facebook, Google, and Bing ads at this price.

Overall, answering the question “how much does it cost to advertise on Amazon?” is difficult because certain sellers cannot access many types of ads, making creating a diverse set of dynamic ads difficult. And anything from the level of competition to the keywords or items you choose might impact the price you pay.

However, placing Amazon advertisements is generally inexpensive and yields more sales for vendors. One thing to keep in mind is that your company does not have to handle the ad production process independently. A team of professionals like GrowAMZ can do the heavy lifting for you.

Keyword Bids

The amount you’re willing to spend when somebody clicks on the ad is a keyword bid. When you bid, you’re competing for ad placement against your product’s competitors. If you set the keyword bid to $0.50, that’s the most you’ll ever spend for a click on your ad. Your opponent will have higher ad placement if they have a greater bid for that particular term. This does not mean that consumers will not see your ad; it means that your competitor’s ad will show first.

Let’s pretend you’re the second sponsored ad from the left, and you’re bidding $0.50 per click. In this case, the rival ahead of you (in the red box) could be bidding $0.55, which could explain why they’re in the first place — a spot where consumers will see them first.

For each term, Amazon will also provide you with recommended bid amounts. Following Amazon’s advice will usually result in one of the top ad placements in the search engine results. Use these Amazon recommendations as a starting point, but remember that you can change the bids at any time. Increase or decrease your bids, make modifications, and monitor the performance of your entries.

Setting your maximum offer to $0.50 does not guarantee that you will pay $0.50 per click all of the time. Your CPC could be lower depending on the next highest bidder’s choice. You will only pay $0.31 per click if your nearest competitor bids $0.30 per click.

You can bid less than the recommended amount, but doing so to save money has significant drawbacks. Suppose you bid lesser than your competitors, for example. In that case, your advertising may not appear in the top spots in the search results. The lesser your bid, the less likely your ad will display. Your ad has a better chance of occurring at the top of the search results if you bid at least the recommended amount.

Your advertising may not appear if you bid far lower than other merchants in your niche. This is why it’s critical to test and understand how much a click or a keyword might cost.

How Much Does Amazon Advertising Cost You in 2022?

Amazon Advertising Costs FAQ

What Should Brands Spend on Amazon Ads?

The company’s objectives determine the marketing budget. Sellers can calculate how much they should spend to attain their goals by working backward from the income they want to create from their ads.

Is Amazon ad optimization possible?

Yes, without a doubt! You can reduce advertising expenses and enhance product sales by targeting the proper goods, categories, and keywords. There are even more complex strategies, such as targeting businesses that sell similar products to give your company an edge over the competition.

Is it possible to lower Amazon advertising fees?

There are various strategies to save money on advertising and minimize your CPC. To begin, locate inexpensive keywords with lower competition than the average. After that, review which keywords create the most sales for the best price and monitor and optimize campaign success.

Which type of advertisement should a company create first?

Most sellers can build Sponsored Product advertising as their initial ad type. As a result, it’s a good place to start for most vendors. You can make Sponsored Brand and Product Display advertising if your company is already a member of the Amazon Brand Registry program. It’s up to you to decide which ads to create initially in this scenario.

How much should I spend on advertising each day?

Experts recommend starting with $50 to $100 per day for your PPC advertising. Still, you may easily start with $5 to $10 per day and make adjustments over time. While your ads are running, collect data so you can make informed judgments about which keywords to target and what keyword bids to make — and optimize your listings. Keep an eye on your budget: your campaigns will be put on hold if it runs out too soon. If your daily budget is running short, simply increase it if you’re profitable, or remove/change expensive keywords that aren’t translating into sales.

It doesn’t matter what your daily budget is as long as it’s successful and generates a positive return on investment.

How Much Does Amazon Advertising Cost You in 2022?

Different Types of Amazon Ads You Can Use

On Amazon.com, sellers can market their brand or items in various ways. Non-Amazon sellers can advertise both on and off the e-commerce platform.

While most sellers choose ads that appear in search results and category pages. It is also available to advertise on Amazon’s display network, consisting of thousands of online websites.

That isn’t to say that everyone can start advertising on Amazon.com right away.

For different objectives, two unique ad categories are useful. First, self-serve advertisements, which most sellers can buy without the help of a salesperson, work as a middleman.

The other alternative is to develop premium advertising, which sometimes necessitates a large ad budget and requires a company to collaborate with its own sales representative who oversees the ad design process.

Premium and Self-Service Ads

Two distinct ad categories are beneficial for different aims. First, self-serve advertisements act as a middleman because most sellers can purchase them without the assistance of a salesman.

The other option is to create premium advertising, which requires a high ad budget and collaboration with a company’s salesperson who oversees the ad design process.

On the other hand, Premium ads are identical to the traditional advertisements that people see on the internet’s most popular websites. Premium advertisements are visual banners, whereas self-service ads are usually less configurable.

Premium advertisements allow merchants to deploy unique creative displays across Amazon.com and its partners instead of featuring a product or set of products.

Amazon also provides advertising services to companies that do not sell products on Amazon.com. Non-Amazon vendors, for example, can build personalized displays, videos, audio, and other ads that show across the internet on partner websites and apps. Of course, when it comes to Amazon advertising fees for personalized ad campaigns, advertisers should expect to pay a lot more.

While discussing Amazon advertising prices, we generally focus on self-service and premium solutions that display immediately on the e-commerce marketplace. Custom solutions can cost thousands of dollars, with expenses dependent on a company’s advertising campaign scope.

If you’re a new Amazon seller, start with self-service marketing to establish yourself as a trustworthy shop for international buyers.

So, what are the many sorts of self-service and premium ads that Amazon sellers can use? Let’s look at the top three initiatives that sellers should think about implementing to boost sales, brand exposure, and product listing search rankings.

Sponsored Product Ads

The most common sort of ad campaign among Amazon merchants is Sponsored Product advertisements. On product search pages, buyers frequently see Sponsored Products before organic listings. Additionally, consumers will discover them near the bottom of product pages.

Sponsored Product ads are attractive since they fit in with other product listings. Buyers may be unaware that paid advertisements appear on search or product pages. Despite the words “sponsored” or “ad” appearing on Amazon to denote paid advertisements, Sponsored Product ads appear to be identical to other product listings.

What Are Amazon’s Sponsored Product Ads Advertising Fees?

The amount marketers spend to promote their items is determined by the targeting options chosen by the seller. Automatic and manual targeting options are available. Advertisers place bids on keywords, and their Sponsored Product adverts show up whenever a buyer searches for those phrases.

Amazon uses information from seller product listings to determine which keywords should activate the ad using automatic targeting. As a result, before creating Sponsored Product advertising, merchants should focus on improving their product listings. Working on Amazon SEO is an excellent idea for any marketing campaign, but it’s especially important when sellers let Amazon target their ads automatically.

How Much Does Amazon Advertising Cost You in 2022?

Manual Targeting

Sellers can also choose to manually target keywords via which they want their products to appear. While designing their ads, sellers can upload a keyword list. When a customer searches the eCommerce platform for certain keywords, Amazon displays the seller’s advertisement.

Let’s take a look at the Amazon advertising costs for Sponsored Product adverts. Sponsored Products are pay-per-click advertisements in which marketers only pay when customers click through to the product page. But how much does it cost to advertise on Amazon using Sponsored Product advertisements, and which option is the most expensive?

The answer is that manual targeting raises the average cost of a click for advertising. Manual targeting, on the other hand, generally results in greater sales since vendors may select keywords they know will convert consumers. Furthermore, sellers have complete control over the amount of money they spend on each campaign, allowing advertisers to be as creative as they want while staying under budget.

Sponsored Brands

While most skilled Amazon sellers can convert their listings to Sponsored Product ads, this is not the case for merchants who want to establish Sponsored Brand ads. Sponsored Brand advertisements are only available to Amazon Brand Registry retailers, vendors, and agency account holders. This ad type is less common than Sponsored Product ads since fewer vendors participate in Amazon Brand Registry.

However, just because certain advertisements aren’t as well-known doesn’t mean they’re ineffective. Sponsored Brand advertisements are, after all, merely a version of Sponsored Product ads. Sponsored Brand ads differ in that they display as headline banners at the top of search result pages and contain three or more products.

Sponsored Brand advertising is ideal for merchants who have similar products that can be combined into a single ad. Buyers can choose from a variety of options in these advertisements. You may even create an Amazon Shop and utilize the ad to direct users to specific pages that feature things that are linked to the buyer’s search parameters.

Product Display Ads

Sponsored Product and Sponsored Brand advertisements have so far targeted specific terms that customers search for. But these aren’t the only options for attracting customers. Product display ads are another sort of ad that advertisers may employ to generate interest in their items.

Sellers can present their adverts to prospective buyers who have specialized interests via product display ads. These advertisements can be found on product pages, marketing emails, and review pages. If a consumer expresses interest in products similar to yours, Amazon will show her your product’s adverts in an attempt to persuade her to buy.

The PPC concept is used in all three ad types, although Sponsored Display advertising is only available to Amazon Brand Registry vendors. Furthermore, Sponsored Display advertising display on sites other than Amazon, making it simple for shoppers to find your goods while looking for information on similar products.

Bonus Tip: Understand the costs of Amazon advertising

If you take the time to research and learn how to calculate advertising expenditures, you’ll be well ahead of your competitors who haven’t. As an Amazon seller, especially as a beginning seller, it is critical to comprehend. If you don’t know how much your potential ads will cost, you could be spending your entire profit margin — and more — on advertising. You are already ahead of the game by reading this post!

How Much Does Amazon Advertising Cost You in 2022?

Takeaway

What are the advantages of well-planned Amazon advertisements? Increased sales, increased visibility, fewer advertising expenditures, and money in your pocket. With this guide, you’ll have a better understanding of how Amazon ads work and how properly using them can be instrumental in growing your business tenfold.

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