How Much Do Amazon Ads Cost? Everything You Need to Know for 2024

When people first dive into the world of Amazon Ads, one of the most common questions is, “How much do these ads actually cost?” The answer, while not simple, is essential for any brand hoping to succeed on Amazon.

What Determines Amazon Ad Costs? 💸

Amazon Ads operate on a pay-per-click (PPC) model, meaning you only pay when someone clicks your ad. This system provides control over your spending, but the cost itself can vary widely depending on a few factors:

• Competition: High-demand products drive up ad costs.
• Keywords: Popular keywords come with higher price tags.
• Ad Type: Different Amazon ad types have unique pricing structures.

The key takeaway? Your budget is entirely adjustable. You could set a budget of $10 a day, $100, or more. But let’s get into the details.

Types of Amazon Ads and Their Cost Impact 💵

Amazon Ads offer three main types, each influencing your cost differently.

1. Sponsored Products

• Location: Search results and product pages.
• Cost Range: $0.20 to over $3 per click.
• Best For: Individual product promotion.

Sponsored Products are the most popular and usually cost less. They’re great for driving sales directly to specific items.

2. Sponsored Brands

• Location: Top of search results.
• Cost Range: Higher than Sponsored Products due to prime placement.
• Best For: Brand visibility and multi-product promotion.

With Sponsored Brands, you can boost brand awareness by displaying your logo and multiple products.

3. Sponsored Display Ads

• Location: Across Amazon and beyond, using retargeting.
• Cost Range: Varies with audience targeting.
• Best For: Retargeting and building awareness across the web.

These ads reach potential buyers even after they leave Amazon, making them ideal for retargeting campaigns.

How Keyword Bidding Works and Affects Cost 🎯

Like Google Ads, Amazon Ads use a bidding system. The higher the keyword competition, the more you pay per click (CPC). Here’s how it breaks down:

• General Keywords: High-traffic terms like “best yoga mat” might have a CPC between $2 and $3.
• Niche Keywords: A keyword like “eco-friendly yoga mat” could cost as low as $0.50 per click.

Pro Tip: Focus on Long-Tail Keywords Long-tail keywords are more specific, less competitive, and generally have a lower CPC. Using tools like Helium 10 or Jungle Scout can help identify these budget-friendly options for your campaigns.

How to Set and Manage Your Budget Effectively 💰

With Amazon Ads, you control your budget with daily caps and bids for each ad. There’s no minimum, so you can start as low as you want.

1. Daily Budget: Start with $5 to $10 daily if you’re new. If you want more exposure, $50–$100 is a good starting point.
2. Campaign Cap: Use Amazon’s budget cap feature to control your total ad spend.
3. Adjusting Over Time: Once you see results, raise or lower your budget as needed.

A smaller budget limits your ad visibility, but starting small is wise if you’re new to Amazon Ads. From there, adjust based on the results.

Looking Beyond CPC to ROAS for Real Results 📈

While minimizing CPC is important, Return on Ad Spend (ROAS) is where the magic happens. The goal isn’t the lowest CPC but the best ROI. For example:

• If your CPC is $1, but each click results in $10 profit, your ads are making a strong return.
• Focus on profit over cost; that’s the winning mindset for Amazon ads.

5 Factors Influencing Amazon Ad Costs ⚙️

1. Competition: The higher the competition, the higher the CPC.
2. Seasonality: Costs often spike during the holidays and peak shopping seasons.
3. Product Relevance: Amazon rewards highly relevant ads, so ensure your keywords align closely with your product.
4. Placement: Prime spots (e.g., top search results) cost more.
5. Ad Frequency: The more your ad appears, the more you’ll likely pay, especially for highly competitive keywords.

Cost-Saving Tips for Amazon Ads 📉 Here’s how to keep costs down while still making the most of Amazon Ads:

• Adjust Bids Regularly: Bidding too high can drain your budget, while bidding too low limits visibility.
• Use Negative Keywords: Exclude irrelevant terms to prevent paying for clicks from uninterested shoppers.
• Experiment with Ad Types: Try different ads and strategies to see what works best for your brand.

Final Takeaway: What’s the Real Cost of Amazon Ads?

So, how much do Amazon Ads cost? It depends on your budget and strategy. You’re looking at a range from $0.20 to $3 per click, with daily budgets as low as $5. But remember, the goal is profitability—if your ads are generating a solid return, then it’s worth the investment.

FAQ: Amazon Ad Costs

1. What’s the minimum budget for Amazon Ads? You can start with as little as $5 daily, though $50–$100 daily offers a better chance of consistent visibility.
2. How does keyword bidding impact cost? High-competition keywords cost more. Use long-tail keywords to keep CPCs low while targeting a niche audience.
3. How do Sponsored Display Ads differ in cost? These ads reach both on and off Amazon, with variable costs depending on targeting options.
4. Is there a way to control total ad spend on Amazon? Yes, Amazon allows you to set a campaign budget cap to manage your overall spending.
5. Can I reduce costs by targeting certain keywords? Focus on niche or long-tail keywords with lower CPCs, reducing costs and potentially improving conversions.
6. Does Amazon reward relevance in ad costs? Yes, relevant ads may benefit from lower CPCs as Amazon favors highly relevant ad placements.
7. Is it better to minimize CPC or maximize ROAS? Maximizing ROAS is ideal. Even if CPC is high, as long as the return is profitable, your ads are worth the investment.

Need Help with Amazon Ads? If you’re looking to maximize your Amazon ad returns, sometimes you need an expert who’s been there, done that. I’m Andy Splichal, author of Make Each Click Count and host of the Make Each Click Count podcast. Amazon’s PPC landscape can be overwhelming, but with the right guidance, you can make every dollar count, I’m here to help. Let’s make those clicks count!

ABOUT THE AUTHOR

Andy Splichal is the founder and managing partner of True Online Presence, author of the Make Each Click Count book series, host of the Make Each Click Count podcast, founder of Make Each Click Count University and certified online marketing strategist with twenty plus years of experience helping companies increase their online presence and profitable revenues.

He was named to Best of Los Angeles Awards’ Most Fascinating 100 List in both 2020 and 2021. To find more information on Andy Splichal, visit trueonlinepresence.com or read The Full Story on his website or his blog, blog.trueonlinepresence.com.