Like Facebook and Google, the e-commerce behemoth Amazon is quickly becoming its own ecosystem. However, instead of social media or search, it consists of buyers and sellers.
Amazon uses thousands of third-party sellers to help move more inventory — and these sellers need a way to make themselves stand out. This is where Amazon’s PPC (pay-per-click) advertising system comes into play.
If you plan to start selling on Amazon, you’ll want to become very familiar with this system. To help out, we’ve covered the basics below. Let’s look at which types of Amazon PPC ads are right for your business.
What is Amazon PPC?
Amazon Pay-Per-Click is Amazon’s advertising model. When it comes to digital advertising, Google and Facebook generally reign supreme. However, Amazon has an incredibly robust advertising service as well.
If you’re familiar with Google’s model, Amazon’s is fairly similar. When you search for something in Google, your first two or three results show the word “Ad” next to it. Google makes its money by selling advertising space in its search results.
Amazon does the same thing. When you run a search on Amazon, your results include the best products according to Amazon’s algorithm. However, it also pulls up products that are “Sponsored.” These “sponsored products” are products being advertised by sellers.
Amazon incorporates an auction process in its advertising system. It’s a little more nuanced than just paying a flat fee. Let’s dive into how this auction process works.
How does Amazon PPC work?
Amazon has optimized its advertising network to help sellers by creating a system where sellers only have to pay when the ad is clicked on — this is known as “pay-per-click” or PPC.
It’s different from other services that charge per “impression,” or the number of times your item is seen.
Amazon allows sellers to bid on advertising space, and the highest bid wins the spot. However, the highest bid is not necessarily what you’ll pay. For example, suppose you bid $1.00 on a specific keyword. The bid ends, and the second-highest bidder has only bid $0.75. You’ll win the ad spot, but you only pay one cent higher than the next highest bid, or $0.76.
The Amazon PPC management system allows advertisers to control their costs and maximize ad spend.
3 ways for sellers to advertise on Amazon
In terms of maximizing ad spend, Amazon allows sellers to advertise in three ways: sponsored products, sponsored brands and sponsored display ads. What’s right for you depends on your Amazon PPC strategy.
Sponsored Products
Sponsored Product ads are the most common type of advertisement. It puts your products in front of other similar products that appear in a buyer’s search results. Your items also show up in the image carousel towards the bottom of the product page.
These ads generally perform well because they display amongst the organic search results. If a shopper is scrolling quickly, they may not realize they’re clicking on an ad.
To set this type of ad up, you’d create an Amazon PPC campaign around the product you want to promote. From there, you choose the keyword term that best matches your product, and your item will display in those search results. Then it’s just a matter of allocating the budget you want to spend.
Sponsored Brands
Amazon’s Sponsored Brands ads are better for advertising your brand as a whole, rather than focusing on a single product. Sponsored Brands ads are more versatile because they take shoppers to different locations, depending on what they click.
For example, if a shopper clicks on your logo, they’ll be taken to your store. But if a shopper clicks on one of your products, they’ll be taken to that product page.
Sponsored Brand ads appear right below the “Add to Cart'' button on Amazon product detail pages. You’ll also find them next to or below search results and on third-party websites and apps (depending on the targeting method that you choose).
Sponsored Display Ads
Sponsored Display ads are another style of Amazon PPC strategy. With this option, your ads are shown in the "similar products" section on a competitor’s product page. Sponsored Display ads can help your small business reach new audiences or shoppers looking for similar products to yours.
Is Amazon PPC right for your business?
Advertising on Amazon can generally give you a much better return on investment (ROI) than other small business marketing options. This is because people searching on Amazon already have “buying intent.” If they’re searching on Google, they might be looking for more information on a product. However, if they visit Amazon’s site, they’re generally looking to buy.
How NEXT helps Amazon e-commerce sellers
Amazon PPC ads are an excellent tool to help market your business. When you pair that with Amazon sellers insurance from NEXT Insurance, you have an excellent foundation to grow your e-commerce business.
NEXT Insurance partners with Amazon sellers like you to protect your business and meet Amazon seller insurance requirements. Apply online to get an instant quote, buy coverage and share your proof of liability insurance in under 10 minutes.
Our licensed, U.S.-based insurance professionals are ready and waiting to help if you have questions.
