Amazon Advertising is one of the main ways for sellers to promote and attract traffic on the site. It is very important to Amazon’s operations, and Amazon advertising has always been a problem that has plagued many Amazon sellers. How much budget does it take to advertise on Amazon? How to estimate the click cost?
1. What is the budget for advertising on Amazon?
The cost of advertising on Amazon depends on several different factors: the type of ad the seller chooses, the daily budget, the type of ad targeting, and the bids for each keyword.
When it comes to advertising costs on Amazon, there is no one-size-fits-all formula. But once sellers properly optimize their listings and advertising, sellers will get higher conversion rates and RoAS.
1. What is my daily advertising budget?
We recommend sellers start their PPC campaigns from $50 to $100 per day, but sellers can also start from $5 to $10 per day and adjust accordingly.
Be mindful of your seller's budget: if it is used up early, your campaign will be suspended. If the seller finds that the budget is insufficient, simply increase the seller's daily budget if it is profitable, or delete/change high-cost keywords that do not convert into sales.
Example: A seller's ad runs for 7 days with a daily budget of $10. At the end of 7 days, sellers will spend $70 on ads. If those ads only generate $100 in sales after deducting Amazon fees and the seller's cost of goods, then the seller's advertising is not profitable. Sellers need to look at the keywords they are targeting and find out why they are not converting.
But if those ads bring in $500 in sales, the seller is doing it right. Use these earnings to increase your daily budget so that sellers' effective ads run for longer, increasing sales.
2. How does keyword bidding work?
A keyword bid is the amount a seller is willing to pay when bidding against product competitors for ad placement. If a seller sets a keyword bid of $0.50, that's the maximum amount the seller will pay each time someone clicks on the seller's ad. If a seller's competitors bid more for that particular keyword, they'll have better ad placement.
Let's say the seller is the second sponsored ad above (second from left) and bids $0.50 per click. In this example, a competitor in front of the seller (in the red box) might bid $0.55, then the seller's competitor's product would be displayed first—a position that is easier for the seller to see first.
Amazon will also provide sellers with suggested bid amounts for each keyword. Following Amazon's recommendations often puts sellers in one of the higher ad placements in search results. Use these Amazon recommendations as a guide, but sellers can change their bids at any time. Bid higher or lower, make adjustments, and see how sellers' items are performing.
2. How to estimate the seller's CPC?
Before investing in a product, it's important to understand the cost of PPC advertising for a seller's primary keywords in your niche. If the PPC advertising cost per keyword is very high, it means that the niche market is very competitive and it is difficult for sellers to get impressions in their ads and listings.
Sellers can expect to pay anywhere from $0.05 to $10 for a PPC ad campaign. That's a pretty broad range, but the amount a seller ultimately pays depends on how competitive the seller's niche is. For example, an estimated exact bid cost of $7.50 per click for a competing product like "travel k-cup machine" and $4.57 per click for broad match.
If you compare this to less competitive products, the estimated cost of exact match is $0.35 and the estimated cost of broad match is $0.25. (Amazon Advertising Tools Free Registration Link:)