In today’s digitally-driven commercial landscape, understanding and embracing emerging advertising platforms is crucial for your business’s growth and success.
Amazon Advertising is one such platform that continues to gain significant momentum, shaping the future of eCommerce advertising.
While you might have encountered various statistics about Amazon Ads, understanding their relevance and implications for your business might still be a riddle.
It’s time to solve that puzzle.
In this article, we’re going to unpack and simplify the often overwhelming statistics, translating them into actionable insights for your business.
Plus, we’ll also hear from a number of Amazon Ads experts to hear their thoughts on what the current trends mean for the future of the platform.
So, let’s delve in and uncover the key Amazon Advertising statistics that are shaping the platform right now.
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Amazon Advertising Revenue Statistics
When it comes to statistics and trends, one aspect grabs attention like no other – top-line revenue.
Amazon now generates in access of $500 billion of revenue as a whole, but what are some of the standout stats when it comes to PPC and advertising?
Amazon generated $37.7 billion of its 2022 revenue from advertising
Amazon’s advertising services helped add over $37 billion to their top-line figures, and this is up 21% on 2021’s numbers.
It’s a small fraction of the half-trillion total revenue, but it continues to show significant growth.
Given this is one of Amazon’s most profitable lines of income, you can expect continued focus on more advertising expansion.
This means more ad placements, fewer organic spots in search results, but on a more positive note – perhaps some new advertising formats sellers can take advantage of in the years ahead.
Amazon’s advertising business is growing faster than Google or Facebook’s
Amazon’s advertising business has been growing at a significantly faster rate than Google’s and Facebook’s, seeing a 25% increase in the third quarter of 2022 to $9.5 billion.
In comparison, Google’s ad revenue rose by only 2.5% to $54.4 billion, and Facebook’s advertising saw a decrease of 3.7% to $27.2 billion.
The gap between the size of Amazon’s ad business and that of Facebook has decreased from six times in 2019 to less than three times now.
Amazon’s growth rate is comparable to what Facebook’s was when its advertising business was of a similar size.
This is crucial for Amazon sellers as it indicates a shift in the advertising landscape.
With Amazon’s advertising business growing rapidly, sellers on the platform can expect more visibility and potential customer reach through Amazon’s ad services.
It also signifies that Amazon is becoming a more significant player in the digital advertising space, making it a viable alternative to Google and Facebook for eCommerce marketing.
As a result, we’re seeing more and more big-name brands – who previously avoided Amazon, mostly for reasons of exclusivity and brand control – come to the platform, and this is likely to continue.
Amazon Ads Click-Through Rate Stats
Click-through rate (CTR) is a key metric for Amazon advertisers because it shows how attractive your listings are in search results.
But what kind of CTR are other advertisers seeing?
The average click-through rate on Amazon US is 0.36%
Perpetua gathers billions of dollars of advertising data each year and produces a report that summarises the key insights.
In the latest version of this report, their data shows the average click-through rate on Amazon in the US to be 0.36%.
So, for every 1,000 times your ad shows up in search results, 36 people are clicking through to your listing.
That might not sound like a lot, but remember with Amazon PPC you’re only paying for the ad when a customer clicks on it.
CTR is growing, but that’s not all positive
According to the same report, the average CTR has grown across Amazon PPC campaigns by 2.9% year on year.
While at first glance this might like a positive trend, it also comes with a negative reality: more clicks on ads means fewer clicks on organic search results.
It’s further evidence that ads are taking up more and more real estate in search results and the Amazon seller who wants to drive growth simply must have a solid Amazon PPC strategy.
Amazon Advertising Conversion Rate Stats
Once a shopper has clicked on your ad, everything comes down to conversion rate – the rate at which browsers become buyers.
But what is typical on Amazon, and what does that mean for the future of selling on the platform?
The average Amazon PPC conversion rate is 14%
Amazon sellers will typically see 14% of PPC-driven sessions convert into sales.
So as a seller, you can expect, on average, 14 sales for every 100 clicks on your PPC ads.
Knowing this average can be a big help in budgeting and predicting revenue from your PPC campaigns.
However, what is even more useful information is knowing what the conversion rate is for your particular category.
To discover that, I’d highly recommend accessing the free Benchmarker report from Perpetua.
This report will analyze your Amazon ad metrics and quite literally ‘benchmark’ you against your direct competitors. It’s a must-have for accurate analysis!
A must-have free Amazon PPC analysis tool that benchmarks your performance against your direct competitors. Having analyzed over $5 billion in ad spend, this report helps you quickly identify opportunities for growth & optimization.
Amazon Advertising Cost-Per-Click Stats
Measuring cost-per-click (CPC) is one of the clearest indicators of the Amazon PPC landscape.
High, rising CPC’s naturally point to a more competitive auction for online retailers, but low, declining CPC’s would suggest businesses are carrying out less ad spending creating opportunities for smaller sellers.
But what is the current reality?
The average CPC in the US is $1.06
The average CPC across Amazon is always changing, but the most recent significant data shows that it is $1.06 across the US.
This is down from highs of $1.32 in December of 2021.
There was a genuine fear in the Amazon seller community at this point that the billions of dollars of Amazon aggregator money flooding the market would irreversibly drive CPC’s up.
Clearly, this has not been the case.
As stories emerged suggesting aggregators were struggling to operate newly rolled-up FBA brands with any sense of great success, sellers breathed a sigh of relief.
CPC’s have been coming down, and the PPC playing field looks set to remain even so that new and old sellers alike can utilize solid strategies to drive more ad revenue and overall business growth.
Keep your CPC’s under control by using an Amazon PPC automation tool that works on your campaigns around the clock.
The cheapest place to advertise is Italy
CPC’s differ across global marketplaces, and in some instances quite drastically.
Whilst the US is naturally the most expensive market to advertise in, Italy is the cheapest with an average CPC of just $0.28.
Selling in Europe certainly has an administrative complexity to overcome, but opportunity still abounds with low levels of competition clearly shown by the low cost to advertise.
Amazon Advertising ACOS Stats
ACOS, or Advertising Cost Of Sales, is your total ad spend divided by total ad revenue. It is one of the core metrics that gives a quick overview of your ad spend is performing.
But what is the key benchmark?
The average ACOS across Amazon is 22%
The average Amazon seller’s total ad spend is 22% of their ad revenue. So, for every $100 generated, the ad spend of the average seller is $22.
This is a 4.5x return on ad spend and means that advertising on Amazon is still one of the most profitable forms of eCommerce advertising.
With more and more of the online shopping volume shifting to Amazon each year, eCommerce brand owners would be well-advised to double down on paid traffic on Amazon.
By targeting an average spend of $22 for every $100 in average revenue, you can work towards a clear benchmark for success.
Expert Opinions On Future Amazon Advertising Trends
We’ve had the honor of interviewing a range of different Amazon Advertising experts on our podcast, the Brand Builder Show.
Each time I host someone on the topic, I can’t help but ask about their predictions for the future of Amazon PPC.
It’s an aspect of selling on Amazon that has continued to evolve over time and shows no sign of standing still.
So, here are some of the key predictions they shared.
PPC expert Mina Elias on Amazon’s social shopping future
When sitting down with Mina of leading Amazon PPC agency Trivium recently, he had a bold prediction about the direction of Amazon advertising:
I don’t see them increasing much more when it comes to things like ad placements. What I do think is they are going to make a push for social shopping, I really have this big theory that they’re going to have something like a merge of Tik Tok and shopping, like Amazon social shopping.
– Mina Elias
This would certainly create a new trend for Amazon sellers and offer yet more opportunities to leverage Amazon’s advertising capabilities.
PPC software creator Michael Faccini on thinking holistically
Michael, the founder of AdBadger, shared his views in our podcast interview about the future of Amazon PPC.
He believes that the siloed approach to advertising that Amazon sellers have taken in the past has to be expanded to think more broadly about a holistic marketing effort:
It’s becoming a lot more integrated. Brand signals that you send to Amazon are becoming more and more impactful and I think one thing over the next few years is taking that bigger, broader view and thinking about SEO, product quality, and brand assets. Those things will become more and more valuable.
– Michael Facchin
The Amazon advertising stats we’ve covered in this article suggest that this mindset will be crucial for driving more profitable ad revenue with Amazon ads in the coming years.
Rather than simply seeing ad spend as an immediate ticket to profitable sales, savvy Amazon sellers will utilize on and off-Amazon marketing to acquire customers and build a strong brand over the long haul.
PPC automation specialist Bradley Davis on using AI for creativity
In our podcast episode, Quartile’s Bradley Davis shared excitement for how AI can be utilized to assist with creative aspects of marketing.
AI is definitely on the forefront of people’s minds, but it’s funny because we’ve been pushing AI and PPC automation for a few years now. In terms of the future, I think we’re going to see more of it. I think one thing that’s exciting to see is AI being used in creativity. Sometimes, testing creatives can be hard. And I’ve seen really great things coming out of AI tools like MidJourney. I think having data to drive creative strategy is very exciting.
– Bradley Davis
Amazon continues to release more creative ad formats (e.g. allowing lifestyle images with Sponsored Brands headline ads), so Bradley’s tips on utilizing AI for creative development could definitely become an asset in driving more average revenue.
Amazon Advertising Statistics: What the past says about the future
The Amazon advertising stats are clear for all to see – the growth of the platform will only continue.
Whilst competition has plateaued in recent times with relatively static cost-per-click averages, we can expect more businesses to continue to move to the platform and push prices higher in the long run.
This means that understanding key metrics like average conversion rate is more important than ever to ensure you stay one step ahead of your competition.
Sellers should also look at expanding their Amazon PPC efforts with more placements beyond Sponsored Product ads (Sponsored Brands and Sponsored Display), more marketplaces, and driving more external traffic.
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