In the world of paid search every click is an opportunity to put a product or service in front of the eyes of a potential customer. Marketers have many choices when it comes to choosing pay per click advertising platforms and each platform varies in regards to traffic volume and CPC (Cost Per Click). Generally, platforms with lower CPC give marketers more opportunities to reach customers while staying within their budgets.
For paid search advertising, Google dominates the landscape with nearly 70% of global search engine market share. But marketers that advertise on Google AdWords tend to pay higher CPCs compared to other advertising platforms.
An emerging pay per click advertising platform for sellers of packaged goods is Amazon Marketing Service (AMS). Paid Search CPCs are said to be much lower on Amazon Marketing Services than Google AdWords, a major benefit of this new platform.
Testing The Hypothesis: Amazon Marketing Services CPCs Are Lower Than Google Adwords CPC
To find out if CPCs are actually lower on Amazon Marketing Services, we tracked a set of keywords in the home consumables category on both platforms for four months.
As we expected, the results showed CPCs are lower on AMS than on AdWords. We monitored the keywords from October 2016 to January 2017 and found that the average CPCs on Amazon Marketing Services was about 38% lower than Google Adwords. AMS averaged $1.21 per click while Adwords averaged $1.79 per click.
Why Paid Search CPCs Are Lower On Amazon Marketing Services
The Long History of Google Adwords – Adwords was first introduced in 2000 and has since become the de facto platform for pay per click advertising. Because of the huge amount of advertisers on Adwords there is tremendous competition, which leads to high CPCs.
On the other hand, Amazon Marketing Services is relatively new and launched in 2012. AMS hasn’t developed a massive advertiser user base yet. Because there is less competition within AMS as an advertising platform, there is a lower CPC.
Focused Advertising on Amazon – Since Amazon is a massive online retailer for consumer products, there is no competition from service related advertisers. For example, an advertiser selling laundry detergent and bidding on the broad match keyword ‘laundry’ on Google Adwords will need to compete with not only other laundry detergent brands but also advertisers for services like laundry pick-up.
Service advertisers are not present on Amazon Marketing Service due to the nature of the platform as an online retailer. We can expect this to change if Amazon starts to offer services as well as products (as we’ve predicted they might do in 2017).
Future CPC Trends for Amazon Marketing Services
Currently the CPCs for AMS are quite low. However, CPCs are expected to rise on AMS as more advertisers start using the platform. Now is the time for brands to take advantage of low CPCs before they rise.