CPC (Cost-per Klick)
All advertising activities via Seller Central or Amazon Marketing Services (AMS) function according to the so-called bidding procedure, i.e. your own advertisements are in competition with the others. Only after a customer has clicked on the own announcement do costs result. Sponsored Products, Product Display Ads and Headline Search Ads are billed according to the click-based pricing model.
No flat rate is due for the placement of sponsored products on Amazon. It is not charged by so-called impressions, but only by actual clicks. This billing method is also very popular in the area of SEM (search engine marketing).
Amazon PPC Costs
The costs for one click consist of your own standard bid and the bid of your competitors. The winner of an auction pays 0,01€ more than the second placed and at most the own standard bid. The actual costs per click can therefore be significantly lower than your own standard bid. These costs are called aCPC (Average Cost-per-Click) the actual costs paid per click, on average.
Amazon makes a “recommended bid” for each keyword. This is based on the average price to be played on page 1. Recommended bids and bid range are updated daily and are based on the increase or decrease of competing bids and ads at each auction. Any bid can be made, regardless of the “recommended bid”.
The use of the recommended bid does not guarantee any impressions or clicks. In the auction process, Amazon tries to play the product with the highest bid and the highest relevance for the customer’s search query. A targeted selection of keywords and optimization according to Amazon SEO criteria is essential for the success of PPC campaigns. The prices for individual keywords can vary greatly – more general keywords, such as “shoes” have a higher CPC than the keyword ” Women’s shoes winter 38 “. These differences should be taken into account when creating PPC campaigns.
aCPC – average click price
The aCPC is based on the actual Cost-per-Click (CPC). This key figure (average cost per click) is the average amount that was spent on a click in the past. The value can therefore be calculated by dividing the ad spend of all clicks received by the total number of clicks. The aCPC can refer to a keyword, an ad group or a campaign, for example. The average cost-per-click (aCPC) therefore represents a key figure for controlling advertising expenditure and campaign performance.
The average CPC usually differs from the maximum cost-per-click (max. CPC). This is the highest amount you are willing to pay for a click on your ad.
An example for the calculation of the average CPC: An ad receives 4 clicks, two of which cost 20 cents and two 40 cents. In total, the clicks cost 1.20 €. Dividing the total cost of 1.20 € by 4 (the total number of clicks) results in an average CPC of 0.30 €.
Since the aCPC indicates the average of all click prices, the amount of the aCPC depends significantly on the click price and thus also on the average click bid of a campaign. If you offer a lot in a click-based advertising campaign in order to win the auction, the prices of the clicks increase and thus also the average click costs. How much you have to offer for a keyword in order for your own advertising to be played out on a search engine like Google or Amazon depends on how competitive the advertising market is for the keyword being advertised. Normally, click prices for expensive products or general terms are higher than for special keywords in the longtail area or for inexpensive products. In addition, the number of bidders is also a decisive factor for the price: the more competitive the market and the more attractive the potential profit of the auction, the higher the aCPC.
The aCPC is particularly relevant for search engine advertising like on Amazon and Google. If you use Adwords on Google to play inorganic search results, to advertise your products, your website or your affiliate page, you should always keep an eye on the aCPC. Google offers the possibility to define a target ACPC. This makes it relatively easy to define a value that keeps advertising costs at a controllable level on a click basis. Instead of always having to monitor the bids and click prices, Google automatically controls the bids so that the specified target aCPC is reached.
On Amazon, where the aCPC is relevant to sponsored products, headline search ads and product display ads, there is no possibility of setting a target aCPC. With Amazon Marketing Services you as an advertiser have to design campaigns and bids yourself in such a way that the desired aCPC is achieved.