Buying Ads on Amazon: A Complete Guide for Beginners
Hi everyone, welcome to another article on online advertising. In this article, we will explore everything you need to know about buying ads on Amazon, one of the largest and most popular ecommerce platforms in the world.
Amazon has over 300 million active customers worldwide, and many of them start their shopping journey on Amazon. This means that advertising on Amazon can help you reach a huge and engaged audience of potential buyers who are ready to purchase your products or services.
What is Amazon Advertising?
Amazon Advertising is the name of the advertising platform that Amazon offers to sellers, vendors, authors, app developers, and agencies who want to promote their products or brands on Amazon and beyond. Amazon Advertising follows a pay-per-click (PPC) model, which means that you only pay when someone clicks on your ad.
Amazon Advertising offers a variety of ad products and formats to suit different goals and budgets. You can choose from sponsored ads, display ads, video ads, audio ads, custom ads, and more. You can also create a free Store to showcase your brand and products in an immersive shopping experience.
Why should you advertise on Amazon?
Advertising on Amazon can help you achieve many benefits for your business, such as:
- Increase visibility: Advertising on Amazon can help you boost your brand awareness and product discovery by placing your ads in prominent and relevant locations on Amazon and other websites.
- Increase sales: Advertising on Amazon can help you drive more traffic and conversions to your product pages or Store by reaching customers who are actively looking for products like yours.
- Increase loyalty: Advertising on Amazon can help you build long-term relationships with your customers by providing them with personalized and engaging experiences across their shopping journey.
How much does it cost to advertise on Amazon?
The cost of advertising on Amazon depends on several factors, such as the type of ad, the competition, the keywords, the bidding strategy, and the budget. However, here are some general guidelines to help you estimate your advertising costs:
- Sponsored Products, Sponsored Brands, and Sponsored Display are cost-per-click (CPC) ads, which means that you pay only when someone clicks on your ad. The average CPC for these ads is $0.81, but it can vary depending on the category and the seasonality.
- Display ads, video ads, and audio ads are cost-per-thousand impressions (CPM) ads, which means that you pay based on how many times your ad is shown to your target audience. The average CPM for these ads is $4.00, but it can vary depending on the format and the placement.
- Custom ads are tailor-made solutions that require a minimum spend of $50,000 and are managed by an Amazon account executive. The cost of these ads depends on the scope and the complexity of the project.
- Stores are free to create and maintain. You can use them to showcase your brand story and products in a multi-page website.
How to get started with Amazon Advertising?
To start advertising on Amazon, you need to have an active seller account or vendor account. If you don't have one yet, you can register here. Once you have an account, you can access the Amazon Advertising console and choose the ad products that suit your goals and budget.
Here are some steps to help you create your first campaign:
Choose your ad product
The first step is to decide which ad product you want to use for your campaign. You can choose from:
- Sponsored Products: These are CPC ads that promote individual product listings on Amazon. They appear in shopping results and product detail pages. They are ideal for driving sales and visibility for specific products.
- Sponsored Brands: These are CPC ads that feature your brand logo, a custom headline, and multiple products. They appear in shopping results and help drive discovery of your brand among customers shopping for similar products. They are ideal for increasing brand awareness and consideration.
- Sponsored Display: These are self-service display ads that help you reach and engage audiences across the shopper journey, on and off Amazon. They use audience or product targeting to deliver relevant messages to your potential customers. They are ideal for retargeting and cross-selling.
- Display ads: These are display ads that run on Amazon properties and devices, as well as third-party websites and apps. They use various targeting options to reach your desired audience segments. They are ideal for growing brand awareness and driving traffic to your website or Store.
- Video ads: These are video ads that run on Amazon properties and devices, as well as third-party websites and apps. They use various targeting options to reach your desired audience segments. They are ideal for showcasing your brand story and products in an engaging way.
- Audio ads: These are audio ads that run on Amazon Music and other streaming audio services. They use various targeting options to reach your desired audience segments. They are ideal for reaching customers in the connected home and beyond.
- Custom ads: These are tailor-made solutions that create personalized customer experiences across Amazon's online and physical stores. They are designed by Amazon's global team of storytellers and innovators. They are ideal for launching new products, creating buzz, or driving loyalty.
- Stores: These are free, multi-page websites that showcase your brand and products in an immersive shopping experience. You can use them to tell your brand story, highlight your product features, and drive sales. They are ideal for building your brand identity and credibility.
Set your campaign budget and duration
The next step is to set your campaign budget and duration. You can choose between two types of budgets:
- Daily budget: This is the average amount you are willing to spend per day for your campaign. Your actual spend may vary depending on the demand and the competition, but you will never spend more than your daily budget multiplied by the average number of days in a month (30.4).
- Lifetime budget: This is the total amount you are willing to spend for the entire duration of your campaign. Your campaign will stop running once you reach your lifetime budget or your end date, whichever comes first.
You can also choose between two types of durations:
- Start and end date: This is the specific time period you want your campaign to run. You can set a start date in the future or start your campaign immediately. You can also set an end date or leave it open-ended.
- Continuous: This is when you want your campaign to run continuously until you manually pause or stop it. You can still edit or cancel your campaign at any time.
Select your targeting method
The third step is to select your targeting method. You can choose between two types of targeting:
- Manual targeting: This is when you choose the keywords or products that you want to target with your ads. You can also set different bids for each keyword or product, depending on how relevant they are to your campaign goals.
- Automatic targeting: This is when Amazon chooses the keywords or products that are relevant to your ads based on your product information. You can also set a default bid for all the keywords or products that Amazon targets for you.
Create your ad creative
The fourth step is to create your ad creative. Depending on the ad product you choose, you may need to provide different elements for your ad, such as:
- Product ASIN: This is the unique identifier for each product on Amazon. You need to provide the ASINs of the products you want to advertise with Sponsored Products, Sponsored Brands, or Sponsored Display.
- Brand logo: This is the image that represents your brand on Amazon. You need to provide a brand logo for Sponsored Brands or Stores.
- Headline: This is the text that appears above or below your ad. You need to provide a headline for Sponsored Brands or Display ads.
- Creative: This is the image or video that showcases your product or brand on Amazon. You need to provide a creative for Display ads, Video ads, Audio ads, or Custom ads.
- Landing page: This is the destination where customers are directed when they click on your ad. You need to provide a landing page for Sponsored Brands, Display ads, Video ads, Audio ads, Custom ads, or Stores.
Launch and optimize your campaign
The final step is to launch and optimize your campaign. Once you submit your campaign for review, Amazon will check if it meets their advertising policies and guidelines. If approved, your campaign will start running according to your budget and duration settings.
To optimize your campaign performance, you need to monitor and analyze your campaign metrics, such as impressions, clicks, conversions, sales, cost-per-click (CPC), return on ad spend (ROAS), advertising cost of sales (ACoS), and more. You can use these metrics to identify what is working well and what needs improvement in your campaign.
You can also make changes to your campaign settings at any time, such as adjusting your budget, changing your bids, adding or removing keywords or products, updating your ad creative, or pausing or stopping your campaign.
A Breakdown of Amazon Advertising Costs by Ad ProductA Breakdown of Amazon Advertising Costs by Ad Product
As we mentioned earlier, the cost of advertising on Amazon depends on several factors, such as the type of ad, the competition, the keywords, the bidding strategy, and the budget. However, to give you a better idea of how much you can expect to spend on each ad product, we have prepared a table that shows the average costs and ranges for each ad product based on our research and experience.
| Ad Product | Average Cost | Cost Range |
|---|---|---|
| Sponsored Products | $0.81 CPC | $0.20 - $3.00 CPC |
| Sponsored Brands | $0.97 CPC | $0.30 - $4.00 CPC |
| Sponsored Display | $0.46 CPC | $0.10 - $2.00 CPC |
| Display ads | $4.00 CPM | $2.00 - $10.00 CPM |
| Video ads | $6.00 CPM | $3.00 - $15.00 CPM |
| Audio ads | $8.00 CPM | $5.00 - $20.00 CPM |
| Custom ads | Varies by project | Minimum $50,000 per project |
| Stores | Free to create and maintain | N/A |
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