How does the Amazon PPC auction work?

Amazon is a lot of things: the world’s largest online marketplace, a go-to for streaming and e-books, and a hub for unique and useful products that are hard to find anywhere else. Amazon also has a reputation as one of the most competitive marketplaces to sell on.

You’ve probably read somewhere that it’s nearly impossible to make it as an independent seller on Amazon without paying to play. If you want to sell on Amazon, you’re going to have to get familiar with Amazon Pay per Click (PPC).

What Is PPC?

Pay per click or PPC is an advertising strategy where you only pay when someone clicks on your ad. It’s used for everything from Google search results to Facebook and Instagram ads. You can use it to customize your ad campaigns, so they target specific keywords, audiences, and products. That means you can target people who are searching for what you’re selling by keywords they’ve searched or products they’ve viewed.

If you want to succeed as an independent seller on Amazon, you probably already know this:

There are over 5 million sellers listed on Amazon’s platform.

That means your product is going up against literally millions of other products in your category. The way the algorithm works is that the more clicks your product gets, the higher up in search results it will be placed.

 In this blog post, we’ll go over the concepts behind the Amazon PPC auction and how you can maximize your profit with that knowledge. Check out Urtasker’s amazon PPC management services.

Let us first have a look at some of the revenue figures of Amazon Ads.

Amazon Ad Revenues

Amazon is a titan of e-commerce and one of the leading online marketplaces in the world for both products and services. They have over $230 billion in annual sales and over 100 million Amazon Prime subscribers. They’ve become synonymous with customer convenience, selection, and fast delivery times, which makes them a go-to choice for many people who are making purchases online.

Let’s explore the revenue generated by advertising and what it means for your business. Amazon’s earnings reports show that ad revenue is growing rapidly.

In Amazon’s Q2 2018 earnings report, they reported $2 billion in ad revenue—a $1 billion increase from the same quarter in 2017.

In Q3 2018, Amazon reported $3 billion in ad revenue—nearly double the amount of ad revenue from the same quarter in 2017.

It’s clear that Amazon Product Listing optimization services are a growing source of income for Amazon, and it isn’t going to slow down any time soon. This is great news for sellers who want to make their products more visible to buyers on Amazon.

With so much competition on Amazon, you need to stand out if you want your products to be discovered. Advertising provides you with a way to be seen by more customers and make more sales on Amazon. With advertising, you can set up sponsored campaigns that target specific keywords related to your products or campaigns that target competitors on Amazon.

What is the Amazon PPC Auction?

Amazon PPC auction is a way for businesses to compete for the highest possible placement on Amazon’s search results page. When you’re selling products on Amazon, you want to get your items (known as listings) in front of as many eyes as possible. That’s because when someone clicks on your listing, then buys the product; you get paid.

To improve the odds of their customers finding what they’re looking for, Amazon employs a search algorithm that determines what products are shown on the results page. The goal of this algorithm is to show shoppers the best results first, but as a business owner, you want your products to be those best results.

That’s why Amazon lets businesses bid on how high they want to appear in search results, based on how much they’re willing to pay each time a customer clicks on their listing. This is called Pay-Per-Click (PPC) advertising. By paying more than other sellers and businesses, you can boost your own listing above theirs and give yourself a better chance of getting more sales.

Types of Amazon PPC Ads:

There are three types of Amazon PPC ads:

Sponsored Products – Advertise individual products on Amazon’s product detail pages.

Headline Search Ads – Advertise your brand or products on Amazon’s search results for specific queries.

Product Display Ads – Automated ads that appear on specific product detail pages and other relevant pages to promote your product.

All three ad types use a cost per click (CPC) bidding strategy, meaning you only pay when a shopper clicks on your ad. Your ad ranking depends on two factors: how much you choose to bid and the relevancy of the keyword to your product page. The CPC determines your ad placement, and the actual amount you pay per click is based on how competitive your bid is compared to other advertisers targeting the same keywords.

How to place bids on Amazon PPC?

Amazon PPC campaigns can be a great way to enhance your visibility and sales performance, but there are tons of different ways to bid. 

The good news is that Amazon has done some of the thinking for you. They’ve rolled out two different bidding strategies to help sellers determine how they’d like to allocate their budget, and both are designed to help sellers optimize their ad spend. The two strategies are:

Automatic Targeting: It is the default option and utilizes Amazon’s algorithms to find keywords that convert for your product and then automatically adjust your bids accordingly.

Manual Targeting: It lets you bid on specific keywords yourself, using whatever strategy you want.

The ad that’s displayed the most cost the least amount. Since all ads cost a different amount, this is why we do not recommend those new Amazon sellers pay more than $0.10 clicks.

However, in order to successfully win an auction, you must be willing to bid higher than the other advertisers than you.

One way to do that is by raising your bids for your competitors’ ads and lowering them for your own ad.

Why should you try to use Amazon PPC ads?

We’ll break down some reasons why Amazon PPC is worth your time and your money.

It’s good for SEO.

Incorporating paid advertising into your strategy can positively impact your organic search rankings. Think of it like this: say someone searches for “beauty products” on Amazon. Your product comes up as one of the top results in the Sponsored Products section, and a customer clicks on it. This sends a signal to Amazon that this product is relevant to the user’s search, and Amazon will then move it higher in its ranking for that keyword over time.

It helps improve search results.

Customers often don’t go directly to a specific product page when they want to buy something on Amazon; instead, they rely on search bars more often than individual product pages, especially if they aren’t sure what they want yet. A lot of people end up finding products through sponsored ads, so you should always make sure you’re visible through them.

It knows what its customers want.

Amazon builds products and services based on a deep understanding of its consumers—and PPC ads are no exception. With Amazon PPC ads, you know that you’re reaching your target customer in exactly the right place: a consumer is already shopping for your product on Amazon. That means you don’t have to waste time or money on an ineffective ad campaign that tries to rope in people who have no interest in your product.

It helps you to get a lot of traffic.

It helps in finding the right keywords, and you can have thousands of people coming to your store every day. This can help boost your sales, especially if you are selling expensive products.

Your competitors may be using it.

If they’re not already, they soon will be! This means that you could lose out on potential sales if you don’t start targeting similar keywords as well.


So now that you have a better idea of what this is all about, it’s time to get started. And we can help! Urtasker’s Amazon Product Listing optimization services guarantee to increase your revenue by at least 20%, and we’ll even refund your first month with us if you don’t see the results you’re looking for. It can be hard to start a successful Amazon PPC campaign, but it doesn’t have to be. By following this guide, you can create a campaign that works!

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button