Who Is Fueling Amazon Ad Business Growth?

Amazon is not earning from the sales alone as it is not always the buyer that benefits this digital marketer. The sellers are also spending much on advertisements and causing an increase in the earnings of Amazon. The ad business is causing the money to flow much like that of Google and Facebook. Amazon is getting closer to these giants by making a positive shift in money spend on ads. Amazon has earned around a whopping $21 billion during 2020. Amazon was growing and generating more earning when all other conventional business entities were struggling. A 47% year-over-year growth had happened for Amazon till 2020. We need to understand that how the Amazon ad business is growing with time. And, why the small and medium level enterprises need to advertise consistently.

At Olifant Digital experts are analyzing how Amazon could attain that figure and at what rate it is expected to accelerate the Ad business. Knowing the trends and gaining the data is useful for business entities. It is good for every digital platform but especially useful for the entities associated with Amazon. You should explore more options if you are also a stakeholder with Amazon. Now let’s dig deep to know how things are working for Amazon in the ad business.

75% Of Amazon Sellers Use Amazon PPC Advertising

Pay-per-click is the most common form of ads that are bought for promotions on Amazon. The promotions are necessary for reach even on the digital platforms. It is impossible to sell without reaching prospective buyers. A buyer is not likely to visit your product listings if your products are not appearing in the organic search results. Pay-per-click remains the only option for sellers after they cannot reach using SEO techniques. Amazon will always consider a low price product. It also assesses the seller’s ability to fulfill the order along with taking a look at the past reviews. Now you can place a low price tag on your products if you are a fresh seller but how will you earn the reviews and ranking. It is simply impossible for a fresh seller to compete using only Amazon SEO. Pay-per-click remains the only option for fresh sellers. And, this is the reason why 75% of Amazon sellers are using this ad type for promotions.

It is not only useful for fresh sellers but also fruitful for the sellers using FBA. All third-party sellers are using it to run campaigns, they deem fit for their products. Amazon usually offers three kinds of pay-per-click ads for the seller. Of the 75% of sellers that tried PPC, they used it in a pattern given below.

  • 88% use sponsored products
  • 43% use sponsored brands
  • 43% use sponsored display

Of all the 25% of sellers that do not try Amazon PPC are used to try advertisement platforms other than Amazon. They try social media and Google to promote their products. But 19% of sellers in that total 25% that do not use PPC choose not to use any advertisement platform at all. You can visit the website to know more about the details.

How PPC Benefits Amazon and Its Sellers

Amazon PPC is a source of income for the platform without any exaggeration. Every bid sold costs the seller a substantial amount. It is not always the case but in scenarios where supply exceeds demand, bids are likely to be sold at a higher price. It can range from a few cents on a dollar to an amount you may not like to pay for every product. Sellers are advised to keep their PPC bids under 2.5% of their product’s price. But it is not always feasible for highly competitive niches as bids can spike to as high as $49 per bid. Now that might just surprise you but it has happened for wireless headphones. This is how it serves the income generation purpose from ad business for Amazon. But PPC ads are not solely meant to serve Amazon alone.

Fortunately, Amazon PPC ads wonderfully serve sellers. It brings their products into the limelight and helps them sell superfluously. It is not about selling alone as selling more products and getting more reviews mean your product will start qualifying for the organic search results. PPC ads are meant to enhance earnings. Data shows that 44% of PPC users could earn around $10,000 per month. And, magic is yet to happen as data indicates that 26% of PPC users could earn over $1 million in lifetime sales. Here why you should consider selling and promoting your products on Amazon.

  • 70% of US shoppers used Amazon for shopping during Q3 of 2020.
  • 64% of consumers prefer searching on Amazon before getting to any platform.
  • 74% of shoppers believe that majority of the future shopping will take place online.

Given PPC’s impact on profitability and reach, sellers must buy Amazon PPC ads.

Amazon’s Non-PPC Advertising Programs Are Also Popular

Amazon PPC is not the only option when it comes to Amazon ad business. These are kind of vetted campaigns that can be joined at a certain rate. The enrollment fee will bring bucks to Amazon while sales to the sellers. The percentage of sellers using these different non-PPC campaigns is described below.

Non-PPC programs                      Percent of Amazon sellers using the program

A+ content                                   18%

Early reviewer program                17%

Vine program (reviews)                10%

Amazon video ads                        8%

Amazon posts                              6%

Amazon live                                 2%

Amazon editorial recommendations 1%

Amazon has launched a video-based marketing program in 2020 to help boost promotions. The program is aimed to help sellers in pursuing buyers that are now more inclined towards graphics. Video has become a key to engage and Amazon is just up to the mark in this regard.

23% Of Sellers Promote Their Products Off Amazon

Amazon sellers are not only promoting their products on the platform but are also keen on linking them to social media platforms. Facebook, Instagram, Pinterest. Tik Tok and YouTube are primarily used to promote products off Amazon. Many other social media platforms are also available and tried by the sellers. But the above described social media platforms remain the priority of almost every Amazon seller.