Amazon’s Cost Per Click (CPC) is an important tool for marketers and businesses looking to grow on Amazon. It is a great way to advertise your products and services on Amazon, and it helps you reach more potential customers. It can be a great way to increase sales and revenue for your business.
Ensuring that every penny of your advertising budget generates value for your business is crucial for long-term success. One effective way to achieve this is by lowering your Amazon CPC cost. In this blog post, we’ll provide you with some valuable tips and tricks to help you reduce your Amazon advertising campaign costs.
What is cost-per-click(CPC)?
CPC is a key metric for marketers to consider when planning digital campaigns, as it determines the cost of ads based on the number of clicks. Finding a balance between low CPC and high-quality clicks is essential to drive customer satisfaction while keeping costs down. It is important to understand CPC in order to optimize Sponsored Products campaigns and get the most out of all types of ads.
What is the relationship between CPC, CTR, and CPM?
Brands should consider using metrics such as CPM, CPC, CTR, CVR, AOV, and ROAS to measure the performance of their ad campaigns. These metrics provide insight into customer engagement, targeted analysis of the target audience, and reach, allowing for a greater understanding of the success of ad campaigns. By further analyzing the data collected from these metrics, brands can gain valuable insights into the preferences and behaviors of their target audience, allowing for further optimization of their ad campaigns to maximize their ROI.
Understand the difference between PPC and CPC
Amazon PPC services have really captured the attention of sellers. Brands use PPC (Pay-Per-Click) to improve their visibility, allowing them to reach and interact with potential customers. The success of these campaigns is measured by CPC (Cost Per Click), indicating how effective the ad was in achieving its marketing goals.
Three Great Tools for Lowering CPC
Lowering the CPC requires strict monitoring, management, and adjustments. Third-party tools are quite helpful in these tasks as they allow sellers to keep track of the ad campaigns. We have included a list of some great tools for lowering Amazon Ads CPC.
Sellerboard is an effective platform that simplifies complex data and metrics, making it easy to understand your Amazon business performance. This platform also increases your profitability through its advanced inventory planning feature.
With Sellerboard, you get all the essential tools needed to manage your Amazon business effectively. The platform provides complete control over your PPC campaigns, allowing you to optimize them for maximum returns. Additionally, Sellerboard offers a free trial, so you can try it before committing to a paid subscription.
SellerApp’s platform is designed to help you achieve long-term profitability by providing you with complete control over all aspects of your advertising campaigns. It includes Amazon ads automation, negative keyword optimization, one-click keyword harvesting, and advanced analytics. It will help you maximize your PPC efficiency while lowering CPC on Amazon. This one-stop tool will make your amazon journey easier. Many Amazon PPC advertising services use it to optimize ad performance.
Helium10 Adtomic is an AI-powered Amazon advertising platform that helps you achieve maximum ROI while minimizing wasted time. It provides visibility into your PPC data and high-level organic markers such as Total Advertising Cost of Sales (TACoS). The tool includes advanced optimization automation capabilities and crystal-clear analytics, giving you the flexibility to make individual performance decisions.
Overall, Helium 10 offers an all-in-one solution for Amazon sellers, with a broad range of features and tools that help you grow your business. Adtomic is just one example of the powerful capabilities that Helium 10 provides.
Break-Even ACOS is Key For Optimal CPC
Lowering your ACOS is an effective way to reduce your CPC and maximize your advertising budget. However, calculating your break-even ACOS is challenging for many Amazon sellers. It’s necessary to ensure that your advertisement generates more money than it costs, and a break-even ACOS can help you achieve this balance.
In simple terms, the break-even ACOS is the point at which your ad spending equals your sales revenue. If ACOS is higher than break-even ACOS, your advertising campaigns are not profitable. Calculating your break-even ACOS is essential to ensure that your advertising efforts provide positive returns on investment.
Steps for Calculating Break-Even ACOS:
- Finding the Pre-Ad Profit Per Unit: Subtract FBA fees, cost of goods, and all other expenses from the sales price to get this amount. For example, if you sell a unit for 15$ and all unit expenses are 8$, then the Pre Ad Profit will be 15$ – 8$ = 7$.
- Convert the Pre Ad Profit Per Unit in Percentage: 15$- 8$ = 7$ (46.6%)
- 46.6% Per unit is the Break-Even ACOS. It means we should be spending less than or equal to 7$ in advertisements for a sale.
Always calculate your ACOS, and find how much ad money is spent to generate a single unit sale. It will show you if your campaigns are successful or not.
How to Lower ACOS?
You can find many ways to lower ACOS, but when it gets down to it. An experienced PPC manager can significantly bring down the ACOS. There is no substitute for professionalism and experience. However, we have included a list of tips that will help you lower the ACOS. Finding the best Amazon PPC management service should be your primary focus if you are struggling.
End Your Search for Best Amazon PPC Agency: PPC Management Service
We have included a list of other tips that will help you lower the ACOS.
- Only invest in best-performing ASINS.
- Increase expenditure on high-performing keywords.
- Stick to specific advertisement channels if you are on a low budget.
- Never overspend, even if a good keyword stops bringing sales.
- Analyze all your methods and keywords to find which ones are working best.
- A high ACOS for a recently uploaded product listing is not always bad.
Additional Methods for Measuring Value Brought in By Advertisement
CPC optimization requires a comprehensive effort, from minimizing expenditure on sponsored ads to efficient PPC management. To achieve continued good performance, a seller must monitor all advertising platforms. However, it is challenging to measure the value brought in by advertisements.
One way to measure the value of your advertising efforts is to track your return on ad spend (ROAS). ROAS measures how much revenue your advertising campaigns generate compared to how much you spend on them. Another metric is cost-per-acquisition (CPA), which measures the cost of acquiring a new customer through advertising.
Calculating the average cost per click
Knowing the average cost per click is an important part of running a successful advertising campaign. Costs vary depending on where the ad is placed, such as search engine results or brand websites. However, understanding CPC data can help marketers allocate their budget and maximize their return on investment. On Amazon, CPCs can range from $0.02 to $3.00, depending on the product category, marketplace, or ad type.
Formula: Total Ad Expenditure / Total Number of Clicks and Impressions
Everyone is advertising an Amazon CPC calculator, but all these calculators require more stats which can be confusing. Remember this: More sales reduce the CPC, while fewer sales increase CPC.
What Type of Ads Have the Lowest CPC?
There is no one-size-fits-all answer to this question. However, sponsored and PPC ads are typically more effective than other channels. That said, it’s essential not to limit yourself to these channels exclusively. Amazon posts, live streams, Google Ads, and social media marketing can all be beneficial for driving traffic and generating sales. The key is to find channels that work best for your specific products and target audience.
Automation Isn’t Always Optimal
Automating ads can alleviate a lot of pressure, but there are cases where close monitoring can be more beneficial for your brand. While the tools we mentioned are great for automating the process, it’s important to note that human input and pattern recognition are still necessary in many cases. It is easy for sellers to become too reliant on automation and lose money on advertisements. A good Amazon PPC agency never over-relies on tools. Keep an eye on all your ad campaigns, and do not rely too much on automation.
Optimizing your Amazon CPC is essential to running a successful e-commerce business. By lowering the CPC, a seller can drive more traffic to product pages, generate more sales, and increase ROI. It’s crucial to monitor your advertising performance regularly, adjust your bids and targeting strategies, and analyze your metrics to ensure optimal results. With the right tools and tactics, you can take your Amazon CPC game to the next level and achieve long-term success as a seller on Amazon.
Hi there! I’m the content marketing and branding specialist for AMZ One Step. I work hard to create engaging and informative content that helps our readers learn more about Amazon selling and how to make the most of their businesses. I love spending time with my family and exploring literary works when I’m not writing or working on projects.