Amazon makes a lot of money. This hardly needs to be said, and yet much of Amazon’s money comes from sources that the average user might not understand well. For example, did you know that Amazon makes more money from Amazon Ads than it does from Prime? Amazon Ads now take up a huge proportion of screen real estate and sales on Amazon. This means that for many businesses that aren’t making proper use of ads, they are not making proper use of Amazon at all.
Amazon now makes more than $31 billion a year in revenue from ads – a growth of more than 58% from the previous year. This is the third largest revenue for digital ad sales in the US. Amazon is putting more and more of its attention into encouraging vendors to use Amazon Ads, discouraging people from listing products in the traditional method.
So – what are Amazon ads, and how should you use them?
Amazon Ads are a means of advertising a product on Amazon. When you search for a particular type of product on Amazon, you will likely see a range of related products. At the top of almost every search result is likely to be a series of sponsored products – items where Amazon has been paid to place the listing higher in the order.
Amazon ads work in a similar way to the more commonly understood Google Ads. The fundamentals are much the same – you bid on particular search terms, in competition with fellow bidders. Then, the winner of the auction is placed higher or lower on the search result page.
Maximise Amazon Sales
Amazon Ads are increasingly becoming the only way to approach sales effectively on Amazon. When you view the top of a top of a search result on Amazon, you see a host of paid ad space before you see an organic result. Taking advantage of this allows you to reach more customers and increase your product visibility directly, while representing an often cheaper option than equivalent Google Ads. Amazon ads enable you to access a purchase ready audience. People don’t use Amazon in the same way that they use Google or another search engine. They are not at the top of the funnel, they are at the point of actively looking to purchase a product. Amazon ads get your product directly in their line of site immediately.
Compete on Amazon
One of the most important reasons to use Amazon ads is to compete. If your business model works on selling through Amazon, then your competitors are probably already taking advantage of the advertising options available to them – meaning Amazon Ads. According to research, the average click-through rate for the three main types of Amazon Ads is:
- For Sponsored Products, it’s about 0.42%.
- For Sponsored Brands, it’s about 0.38%.
- For Display Ads, it reaches approximately 1%.
Compared to the overall click through rate for a typical Amazon product, this is actually very high.
Amazon or Google Ads?
Amazon Ads and Google Ads do not overlap exclusively. They cover different aspects of online advertising, and fulfil different stages of the buyer cycle. However, there are clear reasons to use each type of PPC advertising. Google Ads are more suitable for customers at an earlier stage of the buying process. Google offers businesses of all sizes to access online advertising. However, this is not necessarily suitable for all types of businesses. If you are an eCommerce site, you don’t just need to get your name out there. Instead, you need to get your specific products in front of the people who might buy them. For eCommerce sites, Amazon Ads are often the more profitable and straightforward option to consider.
At Gumpo, we’re experts in both forms of online advertising. We can help talk you through the ways that either Google Ads or Amazon Ads might benefit your company – or if you’re already running campaigns, we can run an audit for you and let you know how your campaigns could be improved.