On Amazon, the conversion rate typically means that someone has purchased a product after clicking on a PPC ad. This is important to determine if the ad is performing well and to generate more profits.
In this formula:
The number of sales after an ad click is the number of people who have bought a product after clicking on the ad.
Number of ad clicks is the total number of clicks on the ad.
Result of this formula is expressed as a percentage and indicates the conversion rate of the PPC ad on Amazon.
The importance of conversion rate (CR) for the success of advertising campaigns on the Amazon PPC platform.
Conversions are crucial for the success of advertising campaigns on Amazon. For example, suppose you are running an advertisement for your new product, a durable travel bag. If customers who click on your ad actually buy this bag, then you have a conversion. The more people buy after clicking on your ad, the more successful the campaign is. By analyzing conversions, you can understand how well your ad is performing and whether you need to make changes to attract more customers and increase sales.
The conversion rate in PPC ads is crucial for Amazon itself. Missing conversions indicate a poor ad. Amazon can limit the visibility of such ads. This improves the user experience and the advertising ecosystem.
What influences conversion rate in advertising on Amazon?
Firstly, the quality of the product page plays a crucial role—whether it is clear, appealing, and contains all relevant information. Then, the keywords are also important, which must be appropriately matched to the ad content and the product, affecting their relevance and quality. Moreover, optimising titles and product descriptions can significantly increase the effectiveness of ads and attract the attention of potential customers. One must not forget the price and competitiveness of the product, as this often decides whether a customer opts to buy. Finally, customer reviews and ratings play a crucial role—positive opinions build trust and encourage purchase, while negative ones can deter potential customers.
What are the average conversion rates for ads on Amazon?
Different types of ads can have different average conversion rates, due to differences in presentation, target audiences, and phases of the buying journey. Below is an overview of average conversion rates ads on Amazon:
Sponsored Products:
Sponsored products are displayed in search results and on product pages. Their average conversion rate is usually between 10% and 12%. This is because sponsored products are shown when the user is already actively interested in purchasing a specific product. It should be noted that sponsored products reaching the top 3 positions can even have a higher conversion rate of up to 20% – 30%. Whether this is profitable depends, of course, on the competition in the respective industry.
Sponsored Brands:
Sponsored Brands are displayed at the top of search result pages and consist of the brand logo, name, and a selection of products. Their average conversion rate can be between 5% and 8%. These ads aim to increase brand awareness and attract customer attention, which can have a long-term impact on conversions.
Sponsored Display:
Unfortunately, these ads have the lowest conversion rate of under 5%.
How can the conversion rate of PPC ads on Amazon be optimised?
There are many strategies and tools that can contribute to improving the effectiveness of ads:
Testing various campaign elements like titles, descriptions, images, or calls to action is crucial. A/B testing helps to understand customer preferences and tailor the ads to them. This can lead to more conversions.
Adjusting the pricing offer. Adjusting the pricing offer to match the competition and customer demand is a crucial element in optimizing conversion. Often, a price adjustment can influence customer purchase decisions and lead to an increase in conversions.
Using tools to optimise and track conversions. It is also wise to use advanced tools for optimising and tracking conversions, such as Acosbot.com. With our tool, we can track conversions for the entire product, regardless of the number of associated advertising campaigns.
We can identify problematic campaigns and eliminate them to optimise the budget. This enhances the effectiveness of the campaigns.
There are numerous factors to consider when starting your Amazon ads journey. Read our Ultimate Amazon PPC guide for 2024 for more information.
