Amazon Advertising Benchmarks

Ever wonder how your Amazon PPC ad campaigns are performing when compared to other sellers? 

Knowing how your campaigns stack up against the average Amazon seller can help guide you when creating strategies designed to enhance the performance of your PPC ad campaigns. 

Are you curious about the overall trends for Amazon Sponsored Product ads over the past year?

Sellers who regularly monitor data/trends are able to make informed decisions about their PPC campaign optimizations, which can provide them with unique advantages over their competitors. 

Key metrics can give sellers vital insights into the health of their Amazon advertising presence.  When monitored properly, sellers can use these metrics to sustainably scale their businesses while keeping Ad Spend low.

Unfortunately, not every seller knows how to use data/trends to increase their profitability while lowering their advertising costs. With so many metrics to track, it can be difficult to know which ones to focus on and improve.

That’s why it’s important for a seller to be aware of the average of Amazon advertising stats for key metrics like ACoS, Cost-per-Click, ROAS, Conversion Rate, click through rate percentage and even a few of the lesser known but equally important metrics. 

This blog will present several interesting trends occurring in the Amazon advertising space in order to help you to see how it has evolved in recent years.  

The data used in this blog references approximately 1,400 accounts (2018-2021), and this data is exclusively related to Sponsored Products ads data for the US marketplace.

ACoS Data/Trend

ACoS is the relationship between a seller’s Ad Spend and how much that spend is generating to the seller in revenue. 

Sellers should keep in mind when looking at this metric, that they must understand what they are optimizing for, and what the purpose of the campaigns are. 

Pro Tip: In large accounts with dozens or hundreds of campaigns, it’s normal to have a wide range of ACoS percentages throughout your campaigns as many of them are built to serve different objectives.

Range: 2018-2021

• ACoS trend is downward

Ad Spend per 1,000 Impressions Data/Trend

The amount of money needed to get a 1,000 Impressions on Amazon.

• Cost has been moving lower throughout 2020

In 2019, this cost was at its highest for the 2018-2021 period.

Ad Spend per Order Data/Trend

Ad Spend per Order is the amount of money a seller has to spend in order to get an order through Sponsored Products Ads, in the US.

Monitoring this metric helps sellers to measure how cost-effective their marketing efforts are compared to the average revenue per order.

• Trend was downward in 2020 and continues during the early months of 2021

Conversion Rate Data/Trend

The Conversion Rate is the metric used to measure the number of page visits that result in a sale. Amazon’s A9 algorithm considers conversion rates as well as sales velocity to rank listings.

• This has been fairly steady at around 12% (lowest point 2018)

Average cost-per-click Data/Trend

Cost Per Click (CPC) is the amount of money sellers spend every time someone clicks on their Ad. 

• By the end of 2020, and continuing into 2021, the average cost-per-click was trending downward from an average cost in 2019 of $1.20, down to around .80 per click.

Click through rate Data/Trend

A seller’s click through rate is the total number of clicks their ad gets divided by the total number of impressions. The higher a seller’s click through rate is the more relevant their ads are to online shoppers. 

2020 saw a dramatic increase in click through rate when Amazon reduced the Product Detail Page, causing ads to appear primarily on the Home page.

• The click through rate in 2021 is at the highest it has been  in quite a long time.

Revenue per Click Data/Trend

This is the amount of revenue generated when an online shopper clicks on a seller's ad.

• Near the end of 2020, the revenue per click increased to nearly $4 per click (holiday season) and is still being seen in 2021.

Return on Ad Spend (ROAS) Data/Trend

Return on Ad Spend is a marketing metric that measures the amount of revenue a seller’s business earns for each dollar it spends on advertising.

ROAS measures the effectiveness of a seller’s advertising campaign. Return on Ad Spend is a measure of a seller’s total sales divided by their total spend. 

• General trend upwards that has carried forward into 2021 thus far. It has been much higher when compared to 2018-2019.

Trends Over the Last Seven Months

ACoS

• In Sept 2020, there was a spike in ACoS, followed by a decline during the holiday season.  In 2021 the trend has been fairly stable at between 24 - 25 percent ACoS.

Ad Spend per 1,000 Impressions

• The general trend has been upwards over the previous months. The cost for 1,000 Impressions has been around $4.50.

Ad Spend per Order

• There was a general trend upwards, peaking in Sept of 2020 at over $10. During the latter part of 2020, the trend began to decrease. In 2021, the cost per order has been around $7. 

Conversion Rate

• This peaked during the holiday season at around 16%. It then dipped after the holiday season to around 12%, until Feb of 2021 when it declined to around 11%.

Cost per Click

• Generally, throughout 2020/2021 this value has been fairly stable at $.90, though upon occasion it has fluctuated as high as over $1. to below .80. 

Click through rate

• Has been trending upwards. (above 0.4). This indicates that sellers are creating relevant ads.

Revenue per Click

• Generally trending upwards (above $4 per click).

Comparison of Data/Trends by Match Type (Broad, Phrase, Exact)

ACoS

• The three match types throughout 2020-2021 have had very similar impacts upon ACoS. The Broad, Exact and Phrase match types have trended together, following a very close alignment of rising and falling.

Ad Spend per 1,000 Impressions

• Exact match proved to be the most expensive of the three match types (sometimes over $7), because the exact keyword is targeted. Phrase match was the second most expensive (around $4), followed by Broad match at just over $2 per 1,000 Impressions.

Conversion Percentage

• Exact match yields the highest conversion percentage at around 15% (most relevant targeting). Phrase match was second, followed by Broad match at slightly over 10%.

Cost per Click

• Generally, it's more expensive to target with Exact match ($1.20 and above) than with Broad (slightly over $.60). Phrase match lands in the middle.

Click through rate

• Exact, followed by Phrase and then Broad.

Revenue per Click

• Exact match generated substantially higher revenues ($5), than Broad match types which generated around $3.

Trends Based On Placement

ACoS

• Top of Search yields the lowest ACoS, when compared to Rest of Search and the Product Detail page.

Ad Spend per 1,000 Impressions

• Top of Search is much more expensive to secure Impressions ($45 and sometimes higher).

Ad Spend per Order

• Top of Search requires the least amount of Ad Spend in order to generate a sale ($6).

Conversion Rate Percentage

• TOS yields the highest Conversion Rate Percentage. The lowest is remarketing, when targeting shoppers off Amazon.

Cost per Click

• TOS usually has the highest cost per click, followed by Remarketing ($.40).

Revenue per Click

• The highest is TOS (almost $5 generated per click). The lowest is Remarketing (less than $1 per click).

Return on Ad Spend (ROAS)

• TOS leads all other Placements

So how do you stack up as an advertiser?

Take these Amazon statistics to develop a comprehensive understanding of the platform to have the tools necessary to maximize your presence and Ad Spend as you move forward in the months ahead.

Entourage: Software to Scale Amazon Ads and Results Driven Management.