Why Brands should invest in Amazon CPC campaigns
Updated: Jul 8, 2021
When contemplating whether or not to implement CPC (Cost Per Click, also known as PPC or Pay Per Click) ads for your Amazon business, lets talk about what the benefits are. The simple answer is that it’s proven to produce the most ROI (Return on Investment) of any paid ad on the Amazon platform. So, if you’re looking to increase your sales in the most sustainable way possible, and organic SEO is just not doing the trick, then CPC ads are the best option. The rest of this article will go over some of the more nitty-gritty details of why CPC could be the right move for you.
Before we get in too deep, let’s go over what CPC on Amazon is. Amazon has a program called Sponsored Products, which is their version of CPC for a single product or variation. There are other CPC ads on Amazon, such as Sponsored Brands and display ads, but today we are focusing on the importance of Sponsored Products. Sponsored Products are ads that display at the top of the search engine results page, blending in with organic product listings. By bidding on relevant keywords Amazon's algorithm places ads based on your bid, relevancy, and other factors like conversion rate. The number of sponsored products on any given SERP depends on how broad the keyword is, but you’ll typically see upwards of 10+ ads for the first few pages, and then it tapers off from there.
The main reason that the vast majority of sellers implement Sponsored Products on Amazon is to generate more sales. If you’re struggling with sales because your product is not getting enough visibility, and you’ve already expended all efforts of improving the SEO of your listings, then you should seriously consider implementing a new strategy to get more eyes on your product and increase your discoverability. Less than 10% of shoppers go past the third page on Amazon, making placement extremely important for impressions and therefore, conversions.
Once you start to get the ball rolling with Sponsored Products, you can typically see a 30% increase in total sales of advertised SKUs. That is obviously a substantial number and there frankly is just no other tactic you can use on Amazon that will increase your sales so effectively. But, Sponsored Products won’t just help you by getting some paid advertising sales, it will help you a lot with your organic sales as well. Amazon’s algorithm organically places products for any given search based solely on the relevance to that keyword and the likelihood that it will convert. Every single Sponsored Product sale you get will in turn help out your organic placement on the SERP.
One of our partners saw a 40% increase in orders in the first 60 days of implementing search, compared to the previous 60 days. They also added $15k in search-driven sales alone at a sub 10% ACOS during that same period, all while spending less than $1,000 in ad spend.
Another benefit of implementing Sponsored Products is that it gives you more insight into what your customers are searching for, what keywords are effective, and what keywords aren’t working. By understanding this, you have more internal information about how to improve your listings. Understanding these important pieces of info is crucial to your campaigns running more effectively and can help increase organic sales.
By implementing Sponsored Products on Amazon, you can potentially increase your sales while learning more about the products you sell and the customers who are buying them.
If you have more questions about CPC campaigns, or how to set them up, give us a wing at (509) 765-2229