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[Short Answer] – Is Amazon PPC Worth It?

“Is Amazon PPC worth it?”  You’ve most probably asked yourself this quest

“Is Amazon PPC worth it?” 

You’ve most probably asked yourself this question at some point.

The short answer is YES. However, not all PPC campaigns will get groundbreaking ROI because all are not created strategically. 

Today, let’s explore the factors that will help you decide whether to invest in Amazon PPC and how to get maximum returns.

Need help getting started? Schedule a free audit with IG PPC today. We specialize in creating high-performing Amazon PPC campaigns that attract more high-intent shoppers and skyrocket your sales figures.

Short Answer – Is Amazon PPC Worth It?

Yes, Amazon advertising is worth every dollar spent ― only if you know how to spend it. 

Whether you’re doing it right or wrong depends on several factors, including your product profit margins, competition intensity, marketing budget, campaign goals, PPC expertise, and product lifecycle stage.

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What is Amazon PPC and How Does it Work?

Put simply, it’s just the common term used to describe advertising on Amazon. 

But here’s the fun part: you only pay if a potential customer clicks on your ad! It’s entirely performance-based and provides total control over your advertising spend. Does it get any better?

Yes, it does! You can advertise on Amazon in three different ways (depending on your goals), such as:

  • Sponsored Products: Promotes specific product listings, perfect for driving sales and targeting particular keywords.
  • Sponsored Brands: This type of ad features your brand and numerous products, which is ideal for increasing visibility and attracting different customers.
  • Sponsored Display: Helps appear on third-party websites/apps, retargeting those who have previously expressed interest in your products.

Here’s how it works: Amazon holds an auction when a customer searches using one of your keywords. Your bid, along with the ad’s quality and relevance, plays a huge role in where you appear in the search results.

That said, you can start advertising by following these steps:

  • Step 1: Select relevant keywords that customers use to find similar products.
  • Step 2: Specify a maximum bid (the amount you are willing to pay) for each keyword.
  • Step 3: Pay when someone clicks on your ad (hence the name “pay-per-click”)

Is it anything like Google Ads, you ask? Let’s find out.

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Amazon PPC vs. Google Ads

For those wondering if Amazon PPC is worth it or whether you should advertise on Google instead, here’s a brief comparison between the two:

Amazon PPC Google Ads
AudienceAmazon customers searching for products (near the point of sale)Larger audience (at different stages throughout the buying journey)
Ad PlacementAmazon search results, product pages, etc.Google search results, Display Network websites, YouTube, etc.
Keyword FocusProduct-specific, transactional Wider range (informative and business-specific)
CostsDifferent for list-view and grid-viewDepends on bidding strategies and keyword competition
Conversion RateAround 10% (higher due to shoppers’ high purchasing intent)Around 3.75% (depends on ad placement, targeting, and niche)
Best Used ForOptimizing sales and product visibility on the platformBrand awareness, website traffic, lead generation

Sources: Ad Badger, dashthis

Note: You don’t have to choose between the two; leverage both to your advantage. 

Use Amazon PPC to target high-intent shoppers active on the platform and Google Ads to broaden your reach and attract new customers.

Advantages and Disadvantages of Advertising on Amazon

Do you know how long it takes a customer to decide what to buy on Amazon?

The answer is less than 3 minutes! Nobody likes scrolling too long while browsing for products. This purchasing behavior gives sellers who actively invest in Amazon ads a huge competitive advantage. 

That said, here are a few reasons why you should start running ads, too:

  • Beginner-friendly: Amazon PPC is surprisingly easy for inexperienced sellers to start with. You can design campaigns and see results in days, literally!
  • Sales accelerator: PPC can boost sales dramatically and help your brand gain traction quickly in competitive niches.
  • Warm lead magnet: With ads, you can easily reach a large pool of high-intent customers already looking for your offer.
  • High ROAS: The average Amazon seller can earn a 4.5x ROAS by investing in Amazon PPC, which is significantly higher than Google Ads.

However, there are some downsides to Amazon advertising that you should be aware of:

  • Pretty competitive: With over 9.7 million sellers actively fighting for the top spot, bid prices for high-performing keywords on Amazon can skyrocket anytime.
  • High stakes: If not managed, PPC can burn a hole in your ad budget. Monitor your campaigns regularly, and tweak your budget as needed.
  • Time-consuming: While Amazon PPC is fairly easy to use, remember that good ads take constant optimization and attention.

Here’s what we’ve learned: It’s best to invest in Amazon ads only if you have a clear strategy, a reasonable budget, and sufficient time to continually optimize ad campaigns.

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Detailed Answer – Is Amazon PPC Worth It?

Long story short: YES. But is that all you need to know? Nope. Let us explain.

In reality, various factors influence how much your organization benefits from investing in Amazon PPC advertising, such as:

1. Product Profitability Margins

As we know, pay-per-click is costlier than other platforms. That said, achieving a good ROAS could be more difficult if your product margins are already pretty slim. 

That’s why we always suggest doing a thorough profitability analysis of your products before running ads.

2. Product Competition Intensity

79% of sellers agree that PPC helps stand out and gain market share in highly competitive product categories.

Note that if your niche is not overcrowded, organic search rankings should mostly suffice. However, even in less competitive markets, PPC can still boost growth.

3. Marketing Budget

You’ll only see great results if you financially commit to your PPC campaigns. Our advice is to start small and stick to a realistic budget at first. 

Try things out, get the hang of it, and increase your ad budget once you begin to see actual results.

4. Campaign Goals

Here comes the big question: What do you want to achieve through the campaign? Increased sales? Brand awareness? Are you launching a new product?

Remember this: different goals call for different strategies and budgets.

5. PPC Advertising Expertise

Do you prefer optimizing your PPC campaigns by yourself or working with Amazon advertising experts?

It’s crucial, as your ability to optimize keywords, bidding strategies, and ad creatives will directly impact your campaign success. 

6. Product Lifecycle Stage

Are you launching a new product? If yes, it can profit tremendously from PPC’s initial visibility boost. 

For older products, try using Amazon ads strategically to maintain market share or target specific keywords.

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How to be Successful with Amazon Ads

So, have you yet decided to start running ads on Amazon? Great move! 

Here’s a reminder: a successful Amazon marketing campaign requires a lot more than just creating ad sets and pressing “launch.” 

Here are four essential tips to guide your PPC efforts toward success:

1. Precise Keyword Targeting

Planning things from a hardcore seller’s perspective? That’s not going to help. Start thinking like a buyer. 

What terms are they entering in the Amazon search bar? Use tools like Amazon Brand Analytics to find those out accurately. To reach a larger audience, target both high-volume and long-tail keywords. But don’t stop there: use negative keywords to avoid spending money on irrelevant searches.

2. Compelling Ad Creatives

First, write your advertisement copy in a way that quickly draws attention, conveys value, and motivates viewers to click. 

Then, make powerful calls to action and highlight your USPs. Experiment with different ad types (Sponsored Products, Sponsored Brands, and Display Ads) to see what works best for your target demographic.

3. Hybrid Campaign Mix

We always recommend using a mix of manual and automated campaigns to enjoy the best of both worlds. 

Automated campaigns are good for discovery, as Amazon’s algorithm automatically targets keywords and products it finds relevant, identifying high-traffic search terms you might have missed. Manual campaigns, on the other hand, give you more precise control to improve targeting with more specific keywords, negative keywords, and bid adjustments.

This hybrid strategy allows you to optimize reach while keeping control, which means more efficient ad spend and assured success on Amazon.

4. Monitoring and Optimization

Amazon advertising is a matter of regular monitoring, review, and improvement. 

Keep an eye on the Search Term reports and analyze the set KPIs for your campaign (impressions, clicks, conversion rate, etc.) to make data-driven decisions. Even the slightest bid revisions, keyword refinements, and creative modifications supported by real-time data can turn your poor-performing campaigns into successes in record time. 

Overwhelmed with Amazon ads or short on time? Work with us as your trusted Amazon PPC partner. 

At IG PPC, we bring years of Amazon advertising expertise and have helped countless brands optimize their campaigns for optimal ROI. Schedule a free audit with us to discuss how we can help you sell more sustainably on Amazon.

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Frequently Asked Questions (FAQs)

Let’s answer some more of your most frequently asked questions related to whether Amazon advertising is worth it:

What is the Expected ROI for Amazon PPC Campaigns?

Marketers generally strive for a 5:1 return on investment, which means they earn $5 for every $1 spent.

An ROI of 10:1 is seen as exceptional, and it’s not that uncommon on Amazon. However, anything less than 2:1 is typically considered unprofitable. This is because the production and shipping costs often lead to a break-even point, meaning the seller isn’t making any money.

What are the Common Mistakes to Avoid in Amazon PPC?

Here are some rookie mistakes you should avoid while planning your first Amazon PPC campaign:

  • Neglecting negative keywords: Not using negative keywords leads to your ads appearing for unrelated queries, wasting your budget.
  • Poor campaign structure: A disorganized campaign structure makes it difficult to track and optimize results.
  • Using just automated campaigns: Automatic campaigns have their uses, but depending only on them restricts your ability to optimize and maintain control.
  • Ignoring search term reports: Not analyzing these data reports can cost you key insights about which keywords mainly drive your ads and how well they work.

How Can Amazon PPC Impact Organic Rankings?

Here’s the thing: Amazon PPC has no direct impact on organic rankings. 

However, more revenue from PPC can increase your product’s visibility in organic search results over time. More sales tell Amazon’s algorithm that your product is relevant and popular, which could lead to higher organic placement.

How Quickly Can You See Results from Amazon PPC?

Although you shouldn’t expect overnight results, short-term results usually start showing within a few days to a week. 

This early performance data will be useful for evaluating campaign effectiveness and making changes. You’ll be guaranteed to witness significant medium-term results within 1-2 months and long-term gains after 3-6 months of continuous optimization.

Conclusion

Not only can a well-optimized PPC campaign maximize revenue, but it also can increase brand awareness, draw in high-intent buyers, and offer insightful target audience data.

Yet, managing Amazon PPC can become a nightmare if you don’t have an in-depth knowledge of the platform’s ever-changing algorithms. 

At IG PPC, our team of Amazon advertising professionals can help you optimize your campaigns for 10x results, eliminating costly mistakes and increasing ROI.

Let’s discuss how our personalized strategies can help your brand gain traction, boost sales, and grow organically on Amazon in the long run. Schedule a free audit call with us to get started.

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