Amazon sellers are paying 46% more per click than they did five years ago. The average cost-per-click jumped from $0.71 in 2020 to $1.04 in 2025, according to Ad Badger’s 2025 Amazon advertising statistics.
But some sellers crack the code and pay far less than their competitors.
The secret? Understanding relevancy scores.
If you’re an Amazon seller looking to cut advertising costs while maintaining sales momentum, learning how to improve relevancy scores and reduce CPCs on Amazon will transform your PPC strategy from a money pit into a profit engine.
What Are Amazon Relevancy Scores?
Here’s the secret Amazon doesn’t advertise: relevancy scores are quietly controlling your Amazon PPC costs behind the scenes. Think of relevancy as Amazon’s way of measuring how well your product matches what customers are searching for.
The platform calculates these scores using multiple signals:
- Click-Through Rates: The most important factor. Amazon pauses keywords with super low CTR.
- Conversion Rates: How often clicks turn into sales.
- Product Page Content: Keywords must appear in your title, bullets, or backend terms.
- Customer Reviews: Both ratings and keyword content within reviews.
- Sales History: Consistent performance on specific keywords.
Amazon uses an enhanced second-price auction where your final cost equals (Next Competitor’s Ad Rank ÷ Your Quality Score) + $0.01.
High relevancy can cut your CPC by 15-25% below what competitive bidding would suggest. Low relevancy forces you to pay close to your maximum bid as a penalty.
Why High CPCs Happen Even With Good Products
Good products don’t automatically get good relevancy scores.
Amazon judges relevancy through data signals:
- Market Saturation Drives Baseline Costs Higher: Over 51,000 US sellers generate $1+ million annually on Amazon. And 43% of all US marketplace sellers earn $100,000+. They are all competing for limited ad space. Bidding wars are inevitable. According to current CPC industry data, competitive categories like Health & Fitness average $1.30 CPC, while Food & Beverage hits $1.25.
- Well-Funded Competitors Distort Pricing: Venture-backed brands and aggregators can operate at a loss in the short term to grab market share. They bid aggressively without immediate profit concerns, inflating CPCs for everyone.
- Seasonal Spikes Crush Budgets: Q4 brings obvious CPC increases. Prime Day, Black Friday, and Cyber Monday represent peak competition periods when even good products pay premium rates.
- Placement Premiums Multiply Costs: Top-of-search positions cost more than other placements. Amazon’s dynamic bidding can increase your bids up to 100% when it detects conversion probability, creating unexpected cost spikes.
Hidden algorithmic factors also matter more than product merit:
- New products lack performance history for quality scoring
- Poor listing optimization tanks conversion rates
- Wrong product categories block impressions entirely
- Broad keyword targeting forces competition with high-volume, expensive terms
The combination means excellent products often face high CPCs until they build the algorithmic signals that Amazon’s system rewards.
These complex optimization challenges are exactly why hundreds of sellers partner with specialized agencies like IG PPC. They specialize in hands-on Amazon PPC management for CPG brands, Amazon sellers, and aggregators.
Our holistic approach focuses on your organic ranking to help products appear in relevant searches even without ads.
With a 95% client retention rate, we’ve proven our strategies work long-term.
Ready to stop overpaying for clicks? Schedule your free audit to discover your optimization opportunities.
How to Improve Relevancy Scores and Reduce CPCs on Amazon
In our experience managing $3B in annual sales, we’ve found that “No bidding strategy overcomes a listing Amazon perceives as irrelevant.”
Start with listing optimization before running any ads:
Product Title Optimization
Front-load your highest-value keywords at the beginning. Amazon assigns higher relevance to keywords appearing earlier in titles.
Use all 200 characters with this formula:
Brand + Product Name + Key Features + Size/Color/Quantity
Mention each keyword only once in the title. Additional uses don’t increase the indexing value according to Amazon SEO strategists.
Bullet Point Strategy
Use all five bullets in priority order:
- Primary benefit and unique selling proposition
- Most important features
- Common questions and objections
- Usage, quality, and craftsmanship details
- Warranty or guarantee information
Naturally incorporate keyword variations while creating persuasive copy that improves conversion rates.
We’ve seen dramatic results when sellers align their listing content with keyword research properly.
For one health and household brand we worked with at IG PPC, we discovered their product served multiple demographics – elderly, kids, and pets.
After redesigning their listing to target all three groups and A/B testing the main image multiple times, we achieved over 30% conversion rates.
The client eventually overtook a competitor with 20,000+ reviews to claim the Best Seller badge!
Backend Search Terms
Use the full 249 bytes for synonyms, long-tail terms, and common misspellings.
Never duplicate front-end keywords – it wastes character space.
Instead of “yoga mat, eco mat, green yoga mat,” use “sustainable pilates gear thick non-slip TPE floor mat home gym.”
Campaign Structure for Relevancy
Create three campaign tiers based on proven optimization frameworks:
| Campaign Tier | Focus | Match Types | Bidding Strategy | Expected Performance |
|---|---|---|---|---|
| Tier 1: Defensive | Branded keywords and variations | Exact match for maximum control | Higher bids ensuring 100% impression share | Lowest CPC and highest conversion rates |
| Tier 2: Performance | Proven high-converting keywords | Separate by match type (exact for top performers, phrase for moderate ones) | Moderate bids based on historical performance | Balanced cost and volume |
| Tier 3: Discovery | Automatic targeting and broad match manual campaigns | Auto and broad match | Lower bids focused on data gathering | Learning phase before moving winners up |
Advanced sellers recommend even more granular control.
As u/vadimsoin explains in Amazon PPC discussions on Reddit:
“The answer: single keyword campaigns targeting 1 product in 1 keyword in 1 match type. You want maximum control for the reason being is that placement adjustment would apply to ALL keywords in a campaign, which behave differently on different placements depending on the keyword.”
u/SellerPeople adds practical advice about campaign evolution:
“Auto campaigns typically are very expensive and you want to hone down to exact match as much as possible. When you find the winners in an auto campaign get them into and exact match campaign.”
Smart Bidding Strategies
Calculate starting bids instead of using Amazon’s suggestions:
Target ACoS × Product Price × Conversion Rate = Starting Bid
Real sellers emphasize this approach in Amazon seller forums based on hard-learned lessons:
“Do not use Amazon’s suggested bid, but you do want to consider the range. If it suggests, for example, 1.30 bid but the range is 0.75 – 2.95, you want to start low. I would set my sights around 0.55 and move from there.”
For a $27.95 product with a 25% target ACoS and a 10% conversion rate:
0.25 × $27.95 × 0.10 = $0.70 starting bid.
Rule of thumb: CPC shouldn’t exceed 2.5% of the product sale price.
Use Dynamic Bidding (Down Only) for cost protection. Amazon lowers bids up to 100% when conversions seem unlikely.
If you’re managing multiple campaigns simultaneously, automated bid optimization software can help maintain these calculated bid ranges across hundreds of keywords without constant manual adjustments.
Long-Tail Keyword Strategy
Long-tail keywords deliver much lower CPC with higher conversion rates.
This strategy works across platforms, as confirmed in keyword optimization discussions on Reddit where one marketer notes:
“Long-tail targeting is a proven strategy. You obviously need a lot of long-tail keywords, and you need to use ones that match what you’re writing.”
Target problem descriptions, not just product names.
Instead of only “beef jerky,” also target:
- “low carb snacks for athletes”
- “high protein portable food”
- “keto-friendly travel snacks”
This captures searchers earlier in their research with lower competition.
Advanced Strategies for Competitive Amazon Markets
High CPCs and tough competition require smarter strategies to stay profitable while growing sales.
These advanced tactics need more effort but work better in competitive markets:
- Rank-Based Bidding Strategy: Adjust your approach based on current organic position. Products on:
- Pages 6+: Focus on converting keywords only with modest bids
- Pages 3-5: Moderate strategy on top-performing keywords to build momentum
- Pages 1-2: Aggressive bidding on keyword variations using phrase match
- Competitor Product Targeting: Place ads strategically on competitor listings who invest heavily in external traffic from Google, Facebook, and influencers. This piggybacks on their visibility efforts while capturing traffic they’ve brought to Amazon at a lower cost than driving your own external traffic.
- Match Type Experimentation: Run parallel campaigns with identical keywords across all match types – Automatic < Broad < Phrase < Exact – to find each keyword’s “sweet spot.” The same keyword often costs significantly less in automatic campaigns versus manual exact match.
- Placement Optimization: Analyze placement reports to identify where conversions actually happen, then adjust multipliers accordingly. If top-of-search delivers strong performance, increase multipliers by 100-200%. If product pages generate most sales, boost those placements while reducing spend on underperforming positions.
- Sponsored Brands Leverage: For Brand Registry sellers, focus budget on Sponsored Brands vs Sponsored Products campaigns that appear at the top of search results with customizable logos and multiple products. These ads provide new-to-brand metrics unavailable in Sponsored Products.
Common Mistakes That Increase CPC and Lower Relevancy
Our account managers consistently find that avoiding these costly errors can save thousands in wasted ad spend while improving your relevancy scores:
- Poor Campaign Structure: Dumping all keywords into one campaign makes tracking difficult and lets high-volume keywords drain budgets from profitable low-volume terms.
- Blindly Using Suggested Bids: Amazon’s suggestions reflect competitive dynamics but ignore your specific economics. Start at 50% of the suggested bids and optimize from there.
- Running Campaigns Without Negative Keywords: Neglecting negative keyword management can waste ad spend on irrelevant traffic that never converts.
- Eliminating Keywords Too Quickly: Analyze performance over longer periods, checking for seasonality before removing terms entirely.
- Mixing Different Price Points in the Same Campaign: Products priced at $10, $15, and $50 with identical $5 CPC deliver 50%, 33%, and 10% ACoS, respectively.
Frequently Asked Questions (FAQs)
Here are answers to the most common questions about Amazon PPC relevancy and cost optimization:
What is the Ideal ACoS for Amazon PPC?
The ideal ACoS depends on your category, margins, and business goals. According to comprehensive benchmark data from Amazon sellers, top performers achieve 9-24% ACoS depending on category, while typical ranges span 14-33%.
u/ad_advance compiled data showing Electronics averaging 14% ACoS, while competitive categories like Baby products hit 33%.
However, as u/rawrtherapy points out in real seller discussions:
“Low ACOS doesn’t always mean you’re doing well at all – it may mean you’re leaving a lot of money on the table.”
Calculate your break-even ACoS using [(Sale Price – COGS) / Sale Price] × 100, then target below that threshold for profitable advertising.
Many successful sellers run higher Amazon ACoS temporarily for growth. u/ilurvefba reported 70% ACoS while scaling from $3M to $12M revenue!
What is the Difference Between CTR and Conversion Rate?
CTR shows how many people click your ad out of everyone who sees it:
(Clicks ÷ Impressions) × 100.
Conversion rate shows how many clicks turn into actual sales:
(Conversions ÷ Clicks) × 100.
The relationship determines optimization priorities:
- High CTR + High CVR = Optimal performance, scale aggressively
- Low CTR + High CVR = Ad creative problems despite good product fit
- High CTR + Low CVR = Listing audit and optimization needed
How Does Seasonality Affect CPC Performance?
Q4 holiday season brings significant CPC increases due to higher competition. Summer months typically show lower costs, making them ideal for testing new campaigns.
Real seller data from the Amazon Seller Central forums confirms this pattern. A perfume seller reported CPC jumping from £0.55 in December to £0.78 in January – a 42% increase.
As experienced seller Elliot noted: “We often find January to be the worst season for ads due to the post-Christmas and stock clearance.”
Seasonal PPC optimization requires different strategies throughout the year.
What Budget Should I Start With for Amazon Ads?
Start with $10-15 daily budgets per campaign for testing. Calculate total monthly budget as:
Monthly Budget = (Number of Target Keywords × Average CPC × 30 clicks per keyword)
For 20 keywords at $1 average CPC: 20 × $1 × 30 = $600 monthly budget.
Allocate using the 60-20-10-10 rule:
- 60% to the best-performing Sponsored Products
- 20% to other keyword campaigns
- 10% to product targeting
- 10% to Sponsored Brands
How Often Should I Optimize My Campaigns?
Check new campaigns daily for the first two weeks to catch issues early. Established campaigns need weekly reviews for ongoing Amazon PPC optimization and monthly strategic assessments.
Conclusion
Don’t let competitors capture more market share while your ad budget bleeds on irrelevant clicks.
Partner with IG PPC and transform your PPC strategy from a cost center into a growth engine. Our account managers will conduct a comprehensive, free audit, showing you exactly where your money is going and, more importantly, how to redirect it for maximum profitability.
We’ve helped hundreds of 7-9 figure sellers achieve an average 27% ACoS reduction and 34% TACoS improvements within three months. This is the reason we’ve been recognized as a top Amazon marketing agency by
DesignRush and the best PPC agency in NYC by Expertise.com.
Let us show you what’s possible for your brand.
Schedule your free Amazon PPC audit today. No contracts, no pressure, just actionable insights from experts who care about your success as much as you do.
