Understand why Amazon Ads are getting more expensive

With Amazon becoming the biggest online shopping platform in the entire world, advertising is the essential point of it overall. As per the current status of Amazon CPC, the advertising cost on the platform is presently costing $1.20 almost on every click. This has shown an upward rising stats with every year to year, 30% from $0.93 at the beginning of the year and over 50%.

Why are Amazon Ads becoming more Expensive?

The rising demand for advertising on Amazon is increasing at a higher rate, which is inflating the price of advertising as well. Here are a few reasons why Amazon CPC is on the rise:

●    Return on ad spends

The rising need for Amazon ads is giving certain regulators of the platform to find their momentum in the effort that is required by Amazon to pay higher taxes. With an increased number of consumers preferring online shopping these advertisers are taking pretty good advantage of this step. Almost 3-4 consumers have started their research for a product through Amazon itself which is the biggest reason for the sellers as well the brand holders to make use of the powerful advertising tool that is being provided by Amazon.

These sellers are already using Amazon advertising generated by Amazon because research says that in this current year of 2021, more than $26 billion shall be generated by Amazon in its advertising revenue. Amazon has turned everything upside down with the profit incentive by changing most of the widgets on their website and turning their app into the “Paid for advertising inventory”.  Most of the ads spends on the Amazon platform have caused the Amazon CPC to rise up as more brands are advertising on Amazon itself.

●    Tougher competition among sellers

The sector of advertising is becoming competitive with each passing day as 62% of the Amazon sellers are mostly concerned about increasing their ad costs on Amazon. On Amazon, it doesn’t matter if you are selling a new and one of its kind product, or a known product, as advertising is the essential need to the success of every seller. You can grow awareness and sales through Amazon ads.  Thus, Amazon CPC increases with the presence of multiple sellers.

●    Improved ROI on ads

Sellers on Amazon get the option to choose among three types of PPC ads. According to some of the data sights, sponsored products are the most preferred types by the sellers and brands on Amazon. Every brand is finding it easy to earn through the leading price of every Amazon CPC through the sponsored products. These are yielding the highest number of returns on their ad spends which is called RoAS. The sponsored brand ads provide you with customization of the headline as well as the logo, even using videos that create multiple ads at once. If you wish to partner with an expert agency on using Amazon CPC, you can do so to maximize your ROI. Work with Growisto today to optimize your Amazon ad campaigns and generate more sales.

●    Preference of established brands towards Amazon CPC

Established brands are turning towards their advertising budgets to Amazon as they can afford to compete for better ad space as compared to the rising prices which are only to increase in the coming future. With the example of the other two leading platforms, Google and Facebook, they themselves have put up with better advertising tools with the help of CPC. Every aggregate firm that is acquiring Amazon sellers is in the same position as that of an established brand as they are out sizing their advertising budgets that hold the capacity to be even unprofitable for some sales.

●    Rise in customer acquisition cost

The advertising adds to the CAC that is the customer acquisition costs. This is because before advertising gained prominence in the field, the CAC was the only 15% that had the transaction fee that was charged for each sale. The competition is also deep-rooted in the pockets of the sellers and brands when it comes to advertising as investors are ready to buy Amazon brands which are the biggest sources of growth and profit in advertising. Advertising on Amazon has its own factors that depend on the ad types you choose, your daily budget, ad targeting, and bids at every keyword.

There are multiple factors that come into play while advertising on Amazon. You as a seller get to decide the amount you wish to spend on Amazon CPC but there are other elements as well. Spending even a minimum amount for every campaign of yours can be fruitful to your product but at times cannot be profitable too. Not all the sellers fit the entire description of a perfect ad cost setting when it comes to Amazon, so it is going to be difficult to keep within the expected range of the cost. However, to make the best use of Amazon ads, you should constantly optimize your campaigns to get the best returns on your Amazon marketing investments.

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