Is Amazon PPC worth it in 2024?

Here is a question that sellers have been asking more and more in the past few years: are Amazon PPC ads worth it? With bidding prices on the rise, achieving successful advertising campaigns is getting harder than ever. Nevertheless, here is our answer: Amazon ads can be an excellent investment or a budget drainer, depending on your skills and approach. Regardless, you cannot compete in your Amazon market niche if you’re not using ads. With 75% of Amazon sellers using PPC advertising, taking the time and effort to study this method has become crucial.

There are many types of Amazon Ads: Sponsored Products, Sponsored Brand Ads, Display Ads, DSP, Video and Amazon Stores. Each ad type works towards different campaign objectives, but on average, the click-through-rate (CTR) for an Amazon ad is .34%. If you’re familiar with Google or Facebook Ads, you probably want to know what’s the difference with PPC on Amazon. Well, people who click on Amazon Ads are already at the bottom of the marketing funnel, which means they are significantly closer to the purchase. There is an average of 14 sales in every 100 clicks. Of course, CTR and conversion rates will vary a lot depending on the industry.

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Amazon Ads can seriously scale your business

Here are a few reasons why Amazon Ads can help increase your sales.

You only pay for leads: With PPC, you only pay when someone clicks on your ad. Your product will be visible to many people, but only those genuinely interested in learning more will cost you.
Fast results: Building an organic search campaign on Amazon is vital, but building momentum takes a long time. With Amazon PPC ads, you can see results in the first few weeks.
Non-invasive visibility: PPC search ads are placed above organic search results. They are not as invasive as Facebook or Instagram ads because they display products people seek. Winning those spots at the top will give your brand lots of visibility without being annoying for potential buyers.
Shopping-oriented targeting: Amazon campaigns allow you to specify the audience for your ads based on keywords, products, or shopping habits.This will show your ads to the right people, increasing the probability for conversions and a positive return on investment.

Amazon Ads might burn out your profit

Now that we’ve seen the bright side let’s take a look at the risks you undertake when using Amazon Ads:

Not getting enough clicks. Sadly, this is not an uncommon problem when running Amazon Ads. There are many reasons why you might not be getting enough clicks. You might have over-segmented your audience, or your target is just wrong. It might also be due to unoptimized product titles, descriptions, and images, which can hinder visibility and affect a product’s overall performance.

Lots of clicks and no conversions. Not getting clicks is bad enough, but at least you’re not wasting money. Paying for clicks that don’t convert is a problem many sellers have faced. This might be due to insufficient keyword research, poor targeting and ignoring negative keywords. This might cause ads to be displayed to the wrong audience, reducing clicks and sales while consuming the ad budget.
Spending all your time optimizing campaigns with no success. Very often, sellers spend several hours optimizing product listings and refining their bid strategy. And still have no success! Remember that you need to consider these hours when calculating your Average Cost of Sale. Spending more time at the beginning is normal, but if you keep spending too much on ads with no results, you might be killing your profit. Actually, according to our research, 80% of managers properly manage only 20% of all keywords, which leads to more than 30% increase on the average ACoS.
Your ad spend has made your business unprofitable. You’re spending so much time writing copy for your products, refining target audiences and bid strategy, plus the ad spend is higher each month as your niche gets more and more competitive. Suddenly, your ad campaigns stop making sense: you’re spending more than what you’re making. In the best-case scenario, you end up even, but you’ve worked a full-time job with no profit.

How to be successful with Amazon Ads

Still with all these risks, Amazon Ads can help you when using the right approach. You can thrive with your Amazon Ads campaigns in many ways. We list here what we consider to be the five top priorities to improve your campaigns.

1. Check your listings

Ads attract more people to your listings, so it’s important to have quality product descriptions and images to aid conversions.
The product name should include brand, product, material, color, and quantity within 100 characters. Include your keyword to rank, but keep it sounding natural.
Product descriptions should consist of short paragraphs and, if possible, 5-point lists. The text should be detailed, with both emotional and rational appeal. Use a clear CTA and insert keywords without forcing it too much.

Images should be high resolution, at least 1000 pixels wide and high, with a white/transparent background.
You can use automation tools to enhance your listings without taking forever, like Sellesta’s Listing Optimization.

2. Keep an eye on your stock

Having available stock is vital to your brand’s reputation on Amazon. For Amazon FBA users, set up notifications for timely product replenishment. If not, you can look for an inventory management platform, especially if your sales extend beyond Amazon. Mark items as “Temporarily out of stock” promptly to avoid bad reviews that can affect your ranking.

3. Collect Product Reviews

One-third of consumers won’t buy a product with no reviews. On top of that, reviews and stars influence Amazon’s algorithm. If you don’t have reviews yet, ask your buyers to write a few words, encouraging them with some goodies. If you need help with this one, Sellesta’s Amazon Ads offers a team of experts that will help you get reviews better and faster.

4. Try to get the Featured Offer (Previous Buy Box)

Amazon describes the Featured Offer as “offers for new products that we display on a product detail page with an Add to Cart button that customers can use to add items to their shopping carts.”The featured offer is placed on the right side of the listing, making buying easier for your customer. It contains the “Add to List”, “Buy Now” and “Add to Cart” buttons, price, shipping details, and product availability info. Without this feature, the buyer will see your competitors’ products.

5. Optimize your campaign

Regularly monitor the campaign’s performance, analyzing metrics like click-through rates, conversion rates, and return on ad spend. Use this data to adjust your bidding strategy, refine your targeting options, and allocate your budget effectively. Conduct A/B tests with different ad variations to find the most effective message and image. You can learn a few tips for manual bidding in this article. Also, many tools on the market currently help you with campaign design, optimization, and monitoring.

Leverage AI: 2024 trend for managing Amazon PPC

In 2024, a significant trend will be the increased integration of artificial intelligence in PPC management. Around 80% of advertisers utilize AI for programmatic bid optimization, signaling the growing importance of machine learning automation in paid search endeavors.

At Sellesta, we’ve created a full-cycle management service that leverages machine learning algorithms to automate Amazon Ads campaigns.

Unlike other tools, Sellesta puts a team of experts at your service:

A designated success manager
An Amazon PPC expert
Machine Learning and Analytics team
Software development team.

Our growth program gives you:

A customized strategy depending on your business goals.
Bi-weekly performance updates and monthly check-in calls.
Personalized reporting through custom dashboards.

Partnering with Sellesta Amazon Ads has boosted our clients’ sales dramatically. Some sellers have increased sales 3.7x, exceeding expectations and cutting down their ACoS.