Amazon PPC Basics – What it is and How The Auction Works

written by Carlos Alvarez
6 · 02 · 22

Amazon pay-per-click (PPC) advertising is a popular and cost-effective way for Amazon sellers to advertise their products on the leading online marketplace. When you are spending money as a small business owner, you need to ensure that every cent is going towards something that will see a return. With Amazon PPC, cost-effective advertising on Amazon is easy. This overview of Amazon PPC advertising will help you create successful campaigns that will take your small business to the next level, without spending more than you have to.

What is Amazon PPC?

Amazon PPC, which is also referred to as “sponsored ads,” is a well-known advertising platform to help sellers increase their product sales on Amazon marketplace. With the pay-per-click (PPC) model, retailers only have to pay Amazon when a viewer clicks on their small business’ advertisements. This means that when an advertiser is running Amazon PPC campaigns, they do not have to pay for impressions, and you are paying for clients who are interested in your product.

How does the Amazon PPC Auction work?

The Amazon PPC Auction process is simple. Advertisers submit a default bid and compete against each other for ad spots. However, the bid set by the highest bidder is not necessarily the cost-per-click. Advertisers will only have to pay $0.01 more than the second highest bidder. This means that the cost-per-click (CPC) for a keyword or targeted ASIN will depend on the highest bid, but it isn’t always the highest bid.

Why use Amazon PPC?

The main reason to use Amazon PPC is the high return on investment. Since Amazon is a retail platform, the users entering a search term are already looking to buy a product. They are active buyers looking to make a purchase. Your ads are more likely to convert when the customer is already in the market for the product. Additionally, you are only paying for advertisements that have been clicked on. When a PPC campaign is managed and optimized well, it can significantly boost the product’s visibility and sales. This will also boost the product’s organic ranking, thereby ensuring long-term success.  It can also help create brand awareness for new product launches, to avoid competitors snatching top positions and sales, and to increase the visibility of products for seasonal trends.

In Summary

While there is a ton of information to know as a seller about Amazon PPC, knowing the fundamentals is a great way to begin. Amazon PPC is a well-known advertising platform to help sellers amplify their product sales on Amazon marketplace. PPC advertisements are priced through an auction. By using Amazon PPC, you are able to ensure you’re paying for each view and not wasting any money that could be profit. Click here to learn more about selling online.

Carlos Alvarez

Alvarez sums up his mission to help online sellers with a quote he heard early on in his career. New sellers constantly compare their Chapter 1 to another seller’s Chapter 20. They see what other veteran sellers are doing and they judge their success and failures by this benchmark. His goal is to show sellers a realistic path to success, and how they can enjoy every chapter of their own, unique journey.

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