Whether you plan to make your own Amazon PPC ads or hire a third-party Amazon marketing agency to generate revenue, one thing is clear: Amazon advertising pays.
The average Amazon seller experiences an advertising cost of sales (ACOS) of 20–25%, meaning their usual profit is 4–5 times their ad spend.
But revenue is just one part of the story.
Amazon advertising has numerous pitfalls and drawbacks when things don’t go according to plan. That doesn’t mean it’s not worth the risk, however. After all, it takes money to make money.
In this piece, we double down on the true cost of Amazon advertising and whether or not it’s worth the investment.
How Much Does Amazon Advertising Cost?
In 2024, Amazon advertising costs $0.91 per click on average.
Of course, the financial costs of Amazon ads involve more than cost per click (CPC) — but the costs of Amazon advertising in general involve more than money (though it may be the first thing you can think of).
Money definitely is part of the picture, but when it comes to Amazon advertising costs as a whole, it’s a lot deeper than that.
Amazon advertising costs boil down to three main components:
1. Fees in Amazon Advertising
The most tangible cost of Amazon advertising is the financial kind. In the grand scheme of things, Amazon advertising is one super massive battleground where sellers have to outplay each other so their listings come out on top to their target buyers.
And the best way to outplay other sellers is to outbid them.
We won’t go into full detail with numbers, figures, and calculations in this piece. Generally, the financial costs of Amazon advertising boils down into these components:
- Your budget — How much funds you’re willing to shell out for Amazon advertising in general
- Type of ad — Sponsored products, sponsored brands, and other types of ads offered by Amazon
- Bidding amount — How much money you’re bidding to rank for a certain keyword
- Match type — Close match, loose match, etc.
The real downer about financial costs, however, is when you couldn’t outplay the other sellers.
When this happens, your ads appear farther below those from competing ads. And oftentimes, buyers will almost always prefer those that appear first, leaving you with little to no ROI from your ad spend at all.
2. Energy and Workflow in Amazon Advertising
Managing Amazon ads is a skill. Creating Amazon ads that profit is a skill that pays.
But the latter takes up even greater energy.
Picture this process:
- Your decision-makers (or you, if you are one) want to promote a set of products on Amazon for a campaign.
- Your advertising department draws together plans through multiple drafts, each involving copywriting, keyword research, proposed budget, and bidding estimates.
- Multiple meetings ensue, going through each of those plans before settling on a final approval.
- The advertising team carries out the necessary steps to set up the ads for each product.
- Constant bidding for the salient keywords takes place.
- … Along with continuously monitoring the performance of ads (versus other competitors).
- Report the ad performance on a daily basis.
- Make revisions whenever necessary.
- Rinse and repeat.
And this is just for one campaign. Looks tedious, doesn’t it?
And that’s assuming it all goes smoothly (and nothing ever completely does).
It becomes even more demoralizing when all this energy spent yields little to no return at the end.
But that brings us to the true cost of Amazon advertising…
3. Time Management in Amazon Advertising
Time is the most precious cost. From keyword bidding to performance monitoring, Amazon advertising demands substantial time investment that could affect other aspects of life.
Advertising on Amazon is a race:
- You’re racing against other sellers for the same keywords.
- You’re racing to be on top of your target buyers’ search results.
- You’re racing to maximize returns on products that may have temporary interest surrounding them.
- You’re racing to optimize your listings by spending countless hours reviewing spreadsheets on keyword performance data.
But more importantly, it takes up your time with:
- Your business
- Family and friends
- Hobbies and interests
- Opportunities to watch movies that just came out
- Your life in general
Look back to the sample workflow we posted above and ask yourself: how much time would pass by when you’ve done all of these things, and is it even worth the time?
Because when everything is said and done, you’ll look back at the things you’ve done in the past and wonder, “Should I have done something else?”
This is why time is the true cost of Amazon advertising.
Is PPC Advertising on Amazon Worth it?
Short answer: Yes.
Despite all the potential costs in time, money, and energy you might expend, Amazon advertising is so much worth it if done right.
Consider, also, that Amazon’s advertising revenue has jumped by 24% in Q1 of 2024, totalling $143.3 billion. This is expected to only go even higher over time.
And as technology continues to evolve rapidly, so is the interest of potential buyers who want in on the trend — along with their willingness to pay for it.
Why not capitalize on that?
In the best-case scenario, when you’ve acquired a considerable amount of profit from executing an optimal Amazon advertising strategy, you’ll come out thankful that you did spend the time, money, and energy to make it happen.
And you’d regret it if you didn’t, in which case you’ll wish you’ve spent your time on Amazon ads.
With that said, how do you save time on Amazon advertising?
How to Save Time on Amazon Advertising?
1. Learn how to do it better.
Ironically, this takes up even more time, since you’ll need to spend hours consuming educational content about advertising best practices and trends
While it does shave off some fair number of hours off the process, it still results in a time-consuming process.
2. Outsource it to an Amazon marketing agency.
This may give you more time and energy to focus on other parts of your business or life when you’ve found the best agency that matches your needs.
It still needs you to consume a lot of time to canvass and vet every potential Amazon marketing agency, which involves numerous considerations like budget.
And since you’re assigning Amazon advertising to a third-party, you’ll also face the risk of miscommunication, leading to potential costs (and heartbreak).
3. Use automation software.
Creating and managing effective Amazon ads manually is tedious. Adding automation software to your workflow substantially streamlines the process.
This is perhaps the ideal approach. You’re still taking things into your own hands, but now you’re automating some of the more demanding parts of the process so you can get your ads published right away.
Some processes that become way faster include:
- Keyword research and management
- Bidding
- Analytics
- Campaigns
It may be a hefty investment at first, but you’ll save a tremendous amount of time and energy that you could be using somewhere else.
— — —
Fortune favors the bold, and it really does take being bold to make it big with Amazon advertising.
When you go beyond the deterring expenses of time, energy, and money to realize your goals with Amazon ads, you’ll achieve incredible profit growth like never before.
All it takes is the right mindset, expertise, and tools.