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Is Amazon PPC Worth It? Or Do Amazon Ads Waste Money?

by | Jul 14, 2022

One of the most nerve-racking decisions when it comes to selling on Amazon? Deciding whether or not you should invest your time and money into scalable advertising – even though most Amazon sellers agree it’s (often) necessary to grow your business.

Early on, almost every single Amazon seller wonders at some point – is Amazon PPC worth it? Or do Amazon ads waste money?

In this article, we’ll outline the factors and considerations you should put into Amazon PPC ads before you decide to launch them – along with the pros and cons to the advertising platform as a whole. So if you want a confidence boost before you dive into this endeavor, keep reading and you’ll have more clarity by the end of this article. Let’s get started!

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What is Amazon PPC?

Amazon PPC (Pay-Per-Click) advertising is a service that allows businesses to place ads on the Amazon website. The ads are displayed in the search results and on product detail pages, and they can be targeted to specific keywords or products. When a customer clicks on an ad, the business pays a fee to Amazon. 

PPC advertising can be a fast and effective way to reach customers on Amazon, and it can be used to supplement other marketing activities such as organic search and sponsored product ads. 

Amazon sellers that are new to the platform (or who want to increase their visibility on the site) can use PPC ads to reach their target audience… without needing to build-up a search engine presence or develop outside marketing campaigns that can take several weeks or months to see a return on. When used effectively, PPC advertising can be a powerful tool for driving sales on Amazon.


How do Amazon ads work?

PPC advertising lets sellers pay to have their products appear as sponsored results on the first page of Amazon search (for the keyword in your product title and description – along with targeted keywords in your campaign). 

Pay Per Click ads are text-based ads that show up on Amazon when customers search for keywords relevant to your products. Ads are targeted to customers based on their search history and Amazon buying habits. When a customer clicks on your ad, they are taken to your product detail page, and you are charged a fee (bid amount) for the click. 

The aim of an Amazon PPC campaign is to increase sales by getting your products in front of potential customers who are already interested in what you’re selling –  as opposed to regular ads like Facebook ads, social media influencers and TV commercials that blast-out advertisements to a general audience (many of whom are not already interested in your product).

Getting started

When setting up an Amazon PPC campaign, you’ll first need to choose which products you want to advertise. You’ll need to research relevant keywords and match them to your products – otherwise buyer intent won’t match your product and you’ll waste large amounts of capital. 

You’ll set a bid amount for each keyword – which is the amount you’re willing to pay per click. You can calculate this based on your average conversion rate and cost-of-goods-sold (which helps you formulate an ideal cost per click that drives an acceptable profit margin).

Finally, you’ll need to set a budget for your campaign. The budget is the total amount you’re willing to spend on your PPC campaign per day – which heavily depends on the total search volume on Amazon for your target keywords, and how fast you want to sell through inventory.

Amazon PPC can be an effective way to increase sales and get your products in front of potential customers. However, it’s important to remember that you’ll need to continually monitor your campaign and adjust your keywords and bids as needed. Let’s dive into whether Amazon ads are worth it.


Should I use Amazon PPC ads? Are they worth it?

Amazon ads are a tool that can be used to drive sales and grow your business. However, whether or not they are worth the investment depends on a number of factors:

  • First, consider the products you sell. If you have a niche product that is not easily found elsewhere, then investing in Amazon ads may help you to reach a wider audience and boost sales. On the other hand, if you sell a commodity product that is widely available from many different sellers, it may be more difficult to stand out from the competition with Amazon ads. 
  • Second, take into account your cash flow situation. If you have the funds available to invest in ads, then it may be worth doing so in order to grow your business. However, if you are tight on cash, then you may want to hold off on investing in Amazon ads until your financial situation improves. 
  • Finally, consider your financial standing as a business. If you are a well-established company with a strong track record of growth, then investing in Amazon ads may help you to accelerate your sales. 

However, if you are a new and unproven business, then you may want to proceed with caution before investing in Amazon ads. Whether or not Amazon ads are worth it depends on your individual circumstances – and you should evaluate the following pros and cons:


Amazon PPC ads: Pros

Generates instant sales

The main benefit of Amazon PPC ads is that they generate instant sales. Unlike SEO, which can take weeks or even months to produce results, Amazon PPC can get your product in front of customers right away – since your products are displayed to shoppers who are already interested in purchasing.

Because of this, Amazon ads are a great way to quickly boost the visibility of your product – especially if it’s new to the market. By bidding on keywords and phrases, you can ensure that your product appears at the top of search results, increasing the likelihood that potential buyers will click through to your listing. 

Plus, since Amazon is the world’s largest online marketplace, with millions of active users, you can reach a vast audience with your PPC campaign (depending on how popular and highly-searched your product category is). So if you’re looking for a quick and easy way to boost sales, Amazon PPC is a great option.

Studies have shown that Amazon ads can result in a significant increase in sales for sellers – even for products that wouldn’t seem to be in high demand (such as relatively-unknown kitchen gadgets or niche kid toys). For these reasons, Amazon Ads is an essential tool for anyone looking to sell products online. Without the advertising platform, it would take a long time to begin generating sales. 

Quick data to optimize

Any marketing strategy to grow your Amazon FBA business requires rigorous testing and optimization in order to be successful. This is especially true for ecommerce businesses, where the competition is fierce and the margins are slim. Amazon PPC ads offer a unique opportunity for businesses to quickly gather data and optimize their campaigns accordingly. 

By split-testing elements like images, descriptions, and titles… Amazon sellers can rapidly improve their results with minimal financial risk – allowing them to make adjustments and rapidly turn unprofitable campaigns into successful money makers that run on autopilot. In a highly competitive marketplace, Amazon PPC ads can give businesses the edge they need to succeed.

Is Amazon PPC Worth It? Or Do Amazon Ads Waste Money?

Consider bringing in help

When it comes to Amazon PPC ads, you have a few different options. You can hire an employee, pay a freelancer who specializes in Amazon PPC ads, or partner with a marketing agency that has experience with Amazon PPC ads. Each option has its own set of pros and cons. 

  • Hiring an employee gives you the benefit of having someone dedicated to your Amazon PPC ads full-time. However, it also means that you might need to provide training and manage the employee’s work. 
  • Paying a freelancer can be a less expensive option, but you may not get the same level of dedication and expertise as you would with an employee. However, freelancers tend to bring more talent and results.
  • Partnering with a marketing agency gives you access to a team of experts, but it may be more expensive than the other two options – and there’s never a guarantee the investment pays off.

Ultimately, the best option for you will depend on your budget and your needs. The easiest option is to try a freelancer – since you can hit the ground running on day 1 without needing to go through the hassles of hiring an employee or waiting for a marketing agency to onboard you and launch your advertising campaigns.

You’re in control

There are many benefits to Amazon PPC ads, chief among them is that you’re in full control of the campaign. You can set your own budget and you don’t have to sign any contracts or make any large commitments. This allows you to tailor the campaign to your specific needs and goals.

You can also make adjustments on the fly as needed, ensuring that your campaign is always optimized for maximum performance. And because you’re in complete control, you can be sure that all of your marketing efforts are aligned with your overall business strategy. In the end, the benefits of Amazon PPC ads are numerous and offer a great deal of flexibility and control to businesses of all sizes – and there’s very few products that can’t be successfully sold with Amazon ads.

Prevents lost inventory

If you’ve ever been in the position of having too much inventory, you know how frustrating it can be. Not only do you have to pay storage fees on the excess product, but it can be difficult to move items that have been sitting around for a while. 

In these cases, running Amazon PPC ads can be a lifesaver. By increasing your sales volume, you can quickly get rid of excess inventory and avoid accruing storage fees. And since Amazon PPC is a pay-per-click system, you’ll only be paying for the ads when they actually drive clicks to the listing – instead of other advertising strategies like radio ads which don’t guarantee any traffic or customers. 

This works extremely well paired with an FBA prep center like ZonPrep – which is a service that reduces your supply chain, storage & prep expenses alongside helping you move inventory. So if you need to get rid of inventory fast, turning on Amazon PPC ads and pairing it with an FBA prep service is a great strategy.


Amazon PPC ads: Cons

Competitive

Anyone who’s ran Amazon sponsored ads will tell you: it’s extremely competitive. Each seller is fighting for the same product listing space and the customer’s attention – and in order to be successful with Amazon PPC, you have to have a well-thought-out strategy. 

This involves bidding on the right keywords, set your ad spend budget wisely, and continuously monitor and optimize your campaigns. If you don’t have a solid plan, you will quickly burn through your ad budget with little to show for it. But if you do it right, Amazon PPC can be a powerful tool to help you grow your business.

The good news is no Amazon sellers are willing to pay more than the “acceptable” amount per click – which means your margins will likely stay around that acceptable point of about 10-30% profit margins (unless your product listings are poorly optimized). This forces the average cost-per-click to stay low enough to drive a decent margin – since it’s a bidding system.

Is Amazon PPC Worth It? Or Do Amazon Ads Waste Money?

Pricey (sometimes)

Many people are unaware of the hidden costs of running ads on Amazon. In addition to the obvious costs of creating and managing campaigns, there are also numerous other expenses that can quickly add up. 

For example, you have to pay to optimize your listings so that they appear higher in search results. You also have to pay for tools to help you manage your campaigns and track your results. And of course, you have to pay Amazon itself for the actual cost of each click. As a result, the cost of running an Amazon ad campaign can be far higher than many people realize.

This is why we typically recommend starting with a freelancer – since there’s no large upfront cost, other than the direct payment to the freelancer. You don’t have to pay huge setup fees with a marketing agency, and you don’t have to pay additional expenses for an employee.


Amazon PPC advertising strategies

Want some quick tips to boost your advertising results? Here are 3 strategies you can use to get started on the right foot:

Invoke persuasive copywriting

In today’s competitive marketplace, it is more important than ever to have persuasive copywriting in your Amazon PPC ads. Your goal should be to convince shoppers to purchase your product by highlighting its unique features and benefits. Here are some tips to help you get started:

  • Make sure your headlines are attention-grabbing and relevant to your product. Your headlines should be clear and concise, and they should give shoppers a reason to click through to your ad.
  • Use strong images that show off your product in use. People are visual learners, so seeing your product in action will help them understand its value.
  • Use emotionally-driven language throughout your ad copy. Use strong verbs to highlight the benefits of your product, and be sure to address any objections that shoppers may have. By using these tips, you can create Amazon PPC ads that are more likely to convert browsers into buyers.
Is Amazon PPC Worth It? Or Do Amazon Ads Waste Money?

Enhance images as much as possible

The image you use for your product can play a big role in how well your Amazon PPC ads perform. Your image is one of the first things potential customers will see, so it’s important to make sure that it’s high quality and eye-catching. 

The best images are clear and sharp, with a white background and no extra text or clutter. They should also be close-up enough to show detail, but not so close that the product looks distorted. On top of that, using multiple images can be helpful in showing different angles or features of the product. With a little effort, you can improve your product images and boost your Amazon PPC ads results at the same time.

Constantly split-test your listings

In order to make sure that your ads are effective, always split-test and optimize them on a regular basis. Split testing allows you to try out different versions of your ad, so that you can see which one performs the best. And once you’ve found a winning formula, you can then start to optimize your ad campaigns for even better results. 

This allows you to run your ads on autopilot and drive sales without much further work – beyond small tweaks here and there. With a little effort, you can make sure that your PPC ads are working hard to generate more sales, instead of allowing inventory to sit in storage and losing out on opportunities to move inventory and grow your operation.

It’s time to boost your Ecommerce Business.

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