In terms of creating and managing advertising campaigns! Amazon Ads isn’t all that different from Google Ads. Amazon is a search engine itself and Promoted Products basically function in the same way text ads do in Google Search.
So the process is! more or less! the same: you create your ad! define your keywords and set your bids.
Once a user types in your target keyword
your ad enters into Amazon’s auction and dataset you compete against the other advertisers bidding on the same keyword. Much like Google Ads! having the highest bid on a keyword gives you the best chance of winning the auction but it’s not the only factor Amazon considers.
Amazon doesn’t publicly state which factors weigh into its auction algorithm but these are the key ingredients we’ve identified:
- Max bid amount: The maximum bid you’ve set for the keyword in question.
- Ad Quality Score: A multifaceted calculation Amazon runs to determine the quality of your ad campaign – including relevance! reviews! shipping speed and a range of other factors.
- Ad Rank score: A score calculated by multiplying your max bid by your Ad Quality Score (Ad Rank = max bid X Quality Score).
- CPC calculation: How much you’re expected to pay per click! based on Amazon’s calculations.
Much like Google Ads!
setting the highest bid doesn’t necessarily the furniture and decoration search mean you win the auction and the ad showing in position one doesn’t always pay the highest CPC. Once again! if you’re already used to managing campaigns on Google Ads! you’re in a good position to optimise your Amazon campaigns for the best performance! looking at the quality of your product pages! relevance of your keywords and the effectiveness of your bid optimisation strategy.
The good news is! it’s generally easier to optimise Amazon campaigns because everything takes place within the platform. When you’re advertising on Google! the performance of your website! the quality of your hosting service and a wide range of other factors – some of which you can’t identify within the Google Ads interface – can hurt campaign performance.
This is less of an issue with Amazon Ads because the customer journey begins and ends on the platform.
However! the biggest benefit of advertising on Amazon is that users go there to buy products. This is the only purpose of Amazon! meaning your ads are seen by people who are ready to pull the trigger on their next purchase. This is why ROI from Amazon campaigns is so high with 59% of brands selling on Amazon saying the platform generates their highest return on media spend of all platforms.
Source
That’s a telling statistic but it shouldn’t come as a major surprise! given the purchase intent that’s inherent in Amazon users. There are downsides to this too though. For example! Amazon isn’t the best platform for building brand awareness or capturing leads at earlier stages of the sales funnel and you don’t get the opportunity to bring visitors to your website.
In terms of ROI vs CPCs! though! Amazon is storming ahead of the other advertising platforms.
How much does Amazon advertising cost?
If Amazon generates the highest return b2b reviews on investment among the major advertising platforms! how much does it cost to get in on the action? Well! the first metric you might want to look at for this is the average CPC (cost per click) and! depending on where you get your data from! the average Amazon CPC in 2020 ranges from around $0.70 to $0.81! which translates to less than 60p in local money.
Now! the average Google Ads CPC ranges from $1-$2 but this drops all the way down to $0.66 for Google Shopping campaigns! which is the closest equivalent to Amazon Ads.