Amazon Advertising 101: Here’s How Amazon Auction Works

Amazon Advertising is a service comparable to Google’s pay-per-click advertisements in that vendors only pay when customers click on their adverts (regardless of whether the item sells). Sellers like you wish their items to be more visible on Amazon and hence you can pay for these spots by bidding on certain keywords, which will increase exposure in the Amazon SERPs. When a shopper clicks on your ad, you will be charged. Amazon’s advertising platform is essentially the Amazon counterpart of Google Ads.

Why Amazon Advertising?

There are many advantages of using Amazon advertising. Amazon has around 300 million active users and this can significantly help your product’s growth.

  • With Amazon ads, you can reduce the sales cycle
  • You can build good relationships with customers
  • Track your result and progress
  • You can reach them at the right place and the right time
  • You can maximize your profit by various features provided by Amazon
  • Your Amazon advertising cost can eventually optimize your marketing budget

What is an Amazon Auction?

Amazon advertising works on a bidding system where sellers compete in an auction through their ads to secure an impression when a relevant keyword is searched. As an advertiser, you must place your bids strategically. The highest amount you must pay is represented by a bid. However, the bid amount might or might not be the amount you spend for a click. As a seller, it is up to you to decide your budget, but Amazon your Amazon auction strategy can increase or decrease your overall Amazon advertising cost.

How to bid?

You’re more likely to miss out on key placements and opportunities if your bids are too low. If you set your bids too high, you’ll likely collect too much traffic for too little money, resulting in severe inefficiencies. You must ultimately place your bids strategically so that you can regulate your Amazon advertising cost. 

How does CPC Work?

When a customer searches for items on Amazon, Amazon conducts a real-time CPC auction to select  

  • which advertisements to show
  • in what sequence.

In the Amazon auction, eligible advertisements are selected on the basis of relevancy and the targeted bid. Relevancy can help you in lowering your Amazon advertising costs as you may not be required to pay the maximum amount if your ad is relevant to the user. 

As a seller, you should focus on improving the relevancy by selecting the correct keywords and then using an optimal bid amount. 

How to take part in Amazon auction bidding?

As a seller on Amazon, your Amazon advertising cost is utilized when your ads are shown to the customers, and they click on them. Therefore, you need to be smart about placing your bids in the Amazon auction. To gain full advantage of the bidding system, you can follow these strategies.  

  • Automated bidding: You may modify bids on placements where your ad appears in addition to your primary bids on keywords or ad groups for automated targeting. You can bid on targeted groups to receive automated targeting.  
  • Manual targeting: Manual targeting with a higher budget emphasis can be used in conjunction with an automated campaign with a lower budget focus. The campaign can assist you in finding new keywords to help you improve your manual targeting.

When it comes to choosing between manual and automated bidding, it’s found that manual targeting gives you the most control over what your ad appears for by allowing you to choose keywords, match types, and bids. Thus, you can control your Amazon advertising cost and get the best out of your available budget. Whether you are an existing or a new seller on Amazon, you should know more about optimizing and performing better in the Amazon auction to get more sales and grow your business. 

With the presence of multiple ad types on Amazon, the Amazon Advertising suite allows you to reach your potential buyers throughout your sales funnel. As the number of both buyers and sellers is growing continuously on Amazon, the platforms shall continue to expand and provide solutions to improve the seller experience for exposure to a larger audience.