October 19, 2022

Did you know that Amazon has taken out Google and Facebook in growth for the recent quarter? Where the e-commerce market and the advertising arena are experiencing some initial turbulence due to the rising inflation, Amazon seems to have it all worked out. In 2021, Amazon dominated 14.6% of the US digital ad market, coming very close to the top players like Google (26.4%) and Facebook (24.1%). In the face of a recession approaching, Amazon’s ad revenue has taken a jump of 18% in this quarter. Businesses are concerned about the vulnerability of advertising opportunities offered by social media giants like Facebook. So, they are allocating more of their budget to Amazon where there is a lesser impact of scrutiny and a higher return on investment.  Currently, Amazon is being viewed as the best place for brands to buy ads. It has a wealth of data on what consumers are buying, allowing advertisers to target their ads at the ideal prospects they’re trying to reach. Another reason is its growing advertising presence on non-marketplace platforms. Amazon is selling ads on other properties like its Freevee video streaming service and its Twitch gaming site. It also sells ads on websites it doesn’t own, just like Google does.  Advertising Cost on Amazon in 2022 Amazon advertising is super popular and an essential part of selling on Amazon. The cost of these ads will depend on factors like the ad type, the CPC (cost-per-click), the bidding strategy, the keywords that you choose, the competitor brands, etc.  Amazon Advertising follows a PPC model, so an Amazon seller only pays when an ad is clicked on(CPC). CPC is the amount that Amazon charges Amazon sellers or advertisers for every click that their ad gets. The average CPC is $0.81. But this is not fixed. Fab On Go PPC specialists can analyze and give you insights on CPC.<Get in touch> with them and they will take care of every advertising move determining your PPC success. Where are Advertisers and Sellers Allocating Most of the Budget? The amount that advertisers want to spend on Amazon ads begins with thinking about what goals they want to fulfill and the objectives they want to achieve. Every ad format on Amazon serves a different purpose. Amazon sellers have three different ad types to work with- Sponsored Products, Sponsored Brands, and Sponsored Display. Out of those, Sponsored Products are the most popular they’re easy on the pocket and offer a simple setup to advertise your products.   But even this outlook of only considering the cost factor is changing. Today, one has to take note of all the benefits that ad choices can bring- exposure, brand awareness, sales, etc. Let’s take a look at Sponsored Brands. These have the brand logo, tagline, and a range of products for advertising in that ad (all customizable). You can make these Amazon ads look impressionable and redirect shoppers who click on them to a designated landing page or Amazon storefront. All of this results in the highest RoAS among the three of them. Sponsored Display has gained massive popularity though it is slightly more expensive. This is where brands are looking to boost their visibility and grow their presence on Amazon. This is where they are spending. These Amazon ads have a lower RoAS but they come with the advantage of promoting your products and targeting customers both on and off Amazon. Rising Costs, Ad Spend and Amazon Sellers CPC is indeed on the rise. The CPC  on Amazon’s US site has increased by 22% from 2021 to 2022. But these ads on Amazon still cost lesser than Google and Facebook ads. Moreover, these ads have first-party sales data and are thus immune to the loss that comes with the deprecation of the 3rd party cookie as experienced with Facebook and Google. With more than 40 percent of online sales taking place on Amazon, companies are already spending between $100 to $50,000 per month on Amazon advertising. And, this is going to increase because of their decreasing trust in other advertising platforms and more economic and robust advertising options available on Amazon. BOOK A FREE CONSULTING CALL Get Free Consultation Amazon Service Management

What is Amazon Dynamic Bids?  Launched as a part of Amazon’s $15 billion investment into third-party seller tools in 2019, these allow Amazon to adjust your Sponsored Product bid in real-time according to the probability of conversion. There are three bidding options available: Down only: Your bids will be decreased by a maximum of 100% when it is likely to lose the auction. You consider historical campaign data into account for this. Up and Down:  Amazon will increase or decrease your bid(max by 100% in each case), depending on the competitors’ bids and your higher possibility of winning. Fixed: These bids don’t allow Amazon to alter bids on the likelihood of them converting. It will utilize the exact bid you have set and any other manual adjustments made by you. How do Dynamic Bids on Amazon Work? Amazon has access to such a massive amount of data that turns finding the probability of a website visitor clicking your ad and converting a child’s play. Machine learning analyzes the data on product niche, buyer behavior, previous ad performance, time of day, and all sorts of other data to decide in real-time whether your ad will result in a purchase. Do Amazon Dynamic Bids Boost Sales? Well, Amazon believes so. And, here’s something you practically do. Use Relevant and Profitable Keywords Use an Amazon keyword tool and reverse ASIN search to find keywords that determine the search results getting targeted in your advertising campaign, directly influencing the amount you need to bid and the chances of conversion.  Refine Your Listing  It is undeniable that how your listing presents itself to potential buyers converts them. They click when they take note of the high-resolution product photographs and informative product descriptions. This, in turn, improves your feedback rating on Amazon. Leverage Amazon Prime Amazon Prime, with its two-day deliveries at no extra cost, has been impacting customers’ mindset and buying behavior for some time now. Jump on this bandwagon as quickly as you can. Just qualify for Amazon Prime through FBA or Seller Fulfilled Prime and get the blue Prime badge. This badge will allow you to appear in fast shipping-filtered search results. Plan a Robust Advertising Strategy Your advertising strategy justifies your bidding tactics. Have your mind set on your business goals and stand by a strategy that you think can influence the turn of events in your favor. Types of Amazon Dynamic Bid Strategies  1. Cost reduction Ideal for newly created advertising campaigns. Features Involves decreasing your advertising costs while you are just learning about Amazon’s advertising system, trying out keywords, collecting data, and improving your listings. Saves you from overspending on advertising through the option of the ‘Down only’ bids. Allows Amazon’s computers time to collect vital information on your ad’s performance so that it can accurately predict the likelihood of conversion likelihood when you later move to ‘Up and Down’ bids. 2. Sales Ideal for currently running campaigns that are well-optimized and ready to scale to create a flywheel effect Features Involves maximizing your ad costs using competent keywords that have been tested and given results. Gives you the best opportunities to increase conversions and expand your brand’s presence on the platform through the option of The ‘Up and Down’ bid  It also allows Amazon to gather data on your ad’s previous performance and predict conversions to increase your chances of achieving success  3. Impressions Ideal for launching brand products and creating brand awareness.  Features Involves maximizing the number of times your potential customers get to see your ad, irrespective of whether they choose to click or not Gives your ads the exposure they deserve in all the relevant searches through the option of a ‘fixed’ bid  Once you have successfully launched your product or have generated desired brand awareness, you can then always switch to a sales strategy using an ‘Up and Down’ bid. It is important to remember to never run any of these campaigns together, at the same time, or for the same product because the campaigns will start bidding against each other. BOOK A FREE CONSULTING CALL Get Free Consultation Amazon Service Management