Understanding Amazon CPC: A Guide for Beginners

amazon cpc

Last updated on January 9th, 2023

Written by Mark Salvania

As a seller, it must be exhausting to always think of ways to amplify your sales and traffic. Knowing the common eCommerce terms is one thing; understanding them is another. This article aims to break down what Amazon CPC is and how it can benefit your business. In order for sellers to generate more sales, they need to know three things by heart: (1) the art of advertising, (2) the psychology in consumer behavior, and (3) the beauty of Amazon CPC.

Defining what is Amazon CPC program

Amazon provides different features and benefits to its users and customers. One such feature is the Amazon CPC (cost-per-click) program, which is open to anyone who wants to grow their business on the platform. In a nutshell, the program lets sellers advertise their products and listings on Amazon.

CPC depends on the number of clicks that the ad gained through the time it was published. As the name suggests, the higher the number of clicks you gathered, the more you’ll pay. What’s great about this type of campaign is that you’ll get more chances of converting sales without spending too much—ah, the beauty of Amazon PPC marketing.

How is Amazon PPC different from Amazon CPC?

Some wonder how different PPC (pay-per-click) and CPC (cost-per-click) are. From a bird’s eye view, both of these pertain to the same process: ad spend.

Amazon PPC is the method of paying each time a person clicks on your ad. On the other hand, CPC gauges the cost of the Amazon product ads that sellers will have to pay. The cost varies depending on the number of clicks. If the ad placed gathers more clicks than the initial bid, it is a success. This equates to the total money spent divided by the total clicks.

Let’s say you paid $200 for your ad, and it receives 200 clicks; the CPC here would be $1. This is how much you’re actually spending per click. Keep in mind that the lower the CPC, the more successful the PPC campaign.

Do sellers need the Amazon CPC program?

Yes! Business owners and even resellers want to grow their business but face different challenges when it comes to launching their products online. The Amazon CPC program would be a lifesaver.

Most sellers think of different ways to grow their business. Some put up their official website and attempt to boost their sales for their top-performing products. However, if there are certain products that do not perform well on their own, applying an Amazon PPC longtail campaign strategy might be apt. You may expand your knowledge on PPC and CPC programs on your own or partner with an Amazon PPC outsourcing agency to see success and growth.

How do Amazon CPC ads work?

As previously mentioned, CPC (cost-per-click) works through a bidding system. Sellers pick different keywords that seem relevant to their products and bid on them. When customers use a search term containing those keywords, Amazon shows products relevant to the customer's keywords.

The product with the highest bid wins the ad placement on the search engine results page or SERP. Regardless of the bid the seller places, winning the ad placement and getting clicks from customers will start the charge for the bill.

Just remember that in order for things to work, sellers need to update the keywords and the bids for at least a week. This way, sellers ensure that keywords are relevant to the products, especially before and during peak shopping seasons.

Types of Amazon CPC Ads

Most of the time, conversion rates are higher on Amazon than on other search engines such as Google, Bing, or even Ecosia. When customers set their minds on a specific item or product, they search directly on online shops or eCommerce sites instead of other search engines.

Amazon CPC campaigns let sellers invest in the marketplace traffic by ensuring that different types of ads appear to the target audience.

Amazon Sponsored Product Ads

This type of ad will give sellers the most efficient benefit among the rest of the ad types. Some ads are manually targeted, while others are automatically targeted when created.

Manual targeting means that sellers get to decide which keywords to target and bid on. On the other hand, automatic targeting means that Amazon controls the keywords that sellers bid on while choosing the maximum bid. Moreover, a smart combination of both campaign types brings success to the business.

Another reason for choosing Sponsored Product ads is that they will provide sellers with different opportunities to place the ad on the results page. This type of ad also lets you place the ads within other product listings. If these listings are inserted within a listing, they may appear as “Sponsored Products related to this item.” Your listings gain more visibility and exposure if they’re attached to a popular item.

Amazon Sponsored Brand Ads

This type of ad was formerly known as Headline Search Ads. Some of the customers see ads on the upper part of the search results on Amazon. It also has a custom call to action for customers.

As this type of ad appears on top, customers would easily see and notice the brand and the products shown. This will drive more sales to your business. However, this is easier said than done; as the platform only shows one placement per page, the competition can get really tight. If different businesses appear on one listing, the ads face challenges in generating a strong ROI. 

Sponsored Brand ads best suit brand-name sellers and stores with high-ranking items. With multiple products performing well, it’s easy for the seller to win the ad placement.

Amazon Sponsored Displayed Ads

Running a business includes setting goals and figuring out the target audience. With Sponsored Display Ads, sellers target relevant customers that have searched or bought a product. This would be similar to an automatic campaign since it won’t be targeting keywords. Amazon distinguishes and pinpoints customers to target, and then sellers set the maximum bid for the click.

What’s great about these ads is that sellers may place them on and off the eCommerce platform. In other words, this kind of ad may generate a wide reach among the three. With this kind of ad, there are three (3) ways in which a seller can target customers.

Amazon CPC option

Sellers target customers who recently viewed the products with off-product display ads. Occupying a significant percentage of the Amazon platform, this option targets customers who have previously searched for the product or bought a similar item to yours. 

The campaigns do not focus more on ROI due to their innate nature, which is more of a cost-of-impression campaign. Its purpose is to grow the store’s reach and raise brand awareness and visibility than drive traffic or sales directly. Moreover, this becomes an investment for the long-term growth of the store.

3 tips to successfully use Amazon CPC Program

Now, that foundation has been established. It’s time to discuss and share the different tips that will help sellers succeed with their CPC campaign.

  1. Try automatic targeting first

For first-timers, it may be best to try out automatic targeting. Keywords and the process of bidding for ad placement can get overwhelming, especially if you don’t have an expert team doing this for you. With auto-targeting campaigns, most of the heavy-lifting is shouldered by Amazon. You just need to set your budget and choose which products you want advertised.

What to do?

  • Set up campaigns through automatic targeting
  • Study how Amazon chooses the keywords for the products
  • Research more until a good grasp of information is acquired
  1. Use tools that will help manage multiple ads

If you have multiple products that you want to advertise, you may want to utilize ad management tools to help you run and monitor the performance of your campaigns. If you want to try out PPC campaigns, consider this step or simply just employ an Amazon full account manager to ease stress.

  1. Conduct keyword research

In order for product listings to gain traffic, ads to work, sellers must conduct keyword research. Don’t take this lightly, as using relevant keywords for your content and campaigns will really boost your reach. Plus, it will yield more sales.

What happens next?

Lurking around Amazon gives sellers different opportunities to try out different things. As it is one of the biggest eCommerce platforms in the world, it helps aspiring sellers start and grow their business. Along with the different types of ads you can utilize, Amazon CPC and PPC campaigns can grow your business exponentially overnight, given the right team and strategies.

Not only that, but CPC campaigns are relatively affordable and easy to learn. With the different tools that will let sellers automate the process, make sure to always keep yourself up-to-date on the latest eCommerce advertising trends. You can also check out forums and even news articles that share new strategies and ideas on how to manage and create effective Amazon campaigns.

So what are you waiting for? Achieve great success and growth with Amazon CPC!

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