How the auction works
Every time a shopper searches, Amazon picks which ads to show and in what order. Your bid is the most you are willing to pay for one click. Amazon weighs it with how likely shoppers are to click and buy your product, so the highest bid does not always win, and a product that converts well can win with a lower one.
You usually pay less than your bid: the price of a click is set by what it takes to beat the next ad in line. That is why the console shows your bid and your cost per click as two numbers.
The three ad types
| Ad type | What it shows | Where |
|---|---|---|
| Sponsored Products | One product | In search results and on product pages |
| Sponsored Brands | Your logo, a headline and several products, or a video | Above and within search results; needs Brand Registry |
| Sponsored Display | One product, retargeting or by audience | On product pages and off Amazon |
Most sellers start, and most ad spend sits, in Sponsored Products. Sponsored Products vs Brands vs Display compares them.
How much Amazon PPC costs
There is no fixed price. You choose a daily budget per campaign and a bid per keyword or target, and the auction sets each click's cost. What matters is not the price of a click but the cost of the sale it brings:
Cost per click ÷ conversion rate$1.08 ÷ 9% = $12.00 per orderDivide that by the order value and you have ACOS. Hold ACOS against your margin before ads and you know whether the ads make money. Break-even ACOS calculator.
Starting your first campaigns
- Work out your break-even ACOS first, so you know what an ad sale can cost before you spend anything.
- Start an automatic campaign for each product, with a modest daily budget, to see which searches shoppers use.
- Add a manual campaign with the search terms that sell, as exact match. Match types.
- Wait for a full attribution window before judging: 7 days for Sponsored Products.
- Run a weekly audit: negate searches that spend and never sell, raise what works. The weekly PPC audit.
Questions
- What does PPC stand for on Amazon?
- Pay per click. You pay when a shopper clicks your ad, not when it is shown.
- Do I pay my full bid for every click?
- Usually not. Your bid is a ceiling; the click costs what it takes to win that auction, which is often less.
- Is Amazon PPC worth it?
- It is worth it when the ACOS your campaigns run at is under your break-even ACOS, so each ad sale earns money. Work that number out first.