3 Takeaways From April’s Amazon PPC Stats

May 13, 2020
By The Badger

A wise man once remarked, “I tried to pay attention, but attention paid me.” Now, more than ever, increased attention will pay dividends with your Amazon PPC efforts.

The world of Amazon is saturated with an abundance of information. The influx in news stories, company changes, and overall media attention can make following the company difficult. Moreover, finding valuable nuggets of information that are actionable for sellers can be even harder. That’s why we’ve been keeping tabs on the information that really matters.

The team at Ad Badger has been tracking all of the important metrics for Amazon sellers and PPC professionals for April, and we’re excited to share them with you.

The Important Questions

Obviously, data should be the driver that managers use to make decisions. This is even more applicable for managers of Amazon campaigns. In this game, all we have are the numbers, but there are some important questions to keep in mind when looking at PPC data.

Why are current stats important?

When rapid change is imminent, as it has seemily been for all of 2020, having the most up-to-date information is the best way to gain an edge on your competition. We released a similar stats post for March of this year, but that information has already changed and so has the landscape of selling on Amazon.

How can stats be utilized?

The most useful way to use the information in these posts is to see where you stand when compared to the averages. Of course, this will be different across industries, but if you are in a thriving industry and still struggling it may be time to change things up.

Where does this information come from?

The stats in this post are from our slice of the Amazon market. The sellers we work with come from a wide variety of industries. Rest assured, none of these sellers exclusively sell toilet paper and hand sanitizer, which would inflate the numbers.

Takeaway #1: Amazon is Here to Stay

The coronavirus epidemic and the ensuing migration to online shopping has solidified Amazon’s position atop the e-commerce throne. In 2018, we said that year would go down in history as the “golden age of Amazon PPC.” Turns out we were a couple of years early, and this year is on pace to be the best ever for Amazon sellers.

When the first few cases of COVID-19 came to the United States and the economy took a down-turn, no one was sure what the future held in regard to Amazon. However, the future quickly became clear as Amazon hired more workers and consumers turned to e-commerce for almost all of their shopping.

Takeaway #2: You Should be Advertising

A frightening trend that we’ve observed is the tendency for sellers to fall back on their organic sales during this time. Sure, activity on Amazon has risen and you may see what seems to be good results with this strategy. However, now is statistically the best time to be advertising.

Advertising Cost of Sales (ACOS)

Your ACOS is the total amount spent on ads divided by your total sales. For example, if you spend $0.25 on advertising and have $1.00 in revenue your ACOS is 25%.

The average ACOS usually hovers around 30%-40%.

Since March, ACOS has been falling dramatically. In April, however, the average ACOS was 25.92%. That is the lowest we’ve ever seen.

Click Through Rate (CTR)

Click through rate is the amount of clicks your ad gets divided by the total number of impressions the ad received. For example, if your ad has 1000 impressions and 5 clicks your CTR is 0.5%.

The average CTR, in a normal time, was 0.36%.

In April, the average CTR rose to an astonishing 0.64%! That means consumers weren’t simply perusing the listings on Amazon. Instead, they sought out products and made purchases.

Conversion Rate

Your conversion rate is the percentage of customers who purchased a product divided by the total number of clicks on the product listing.

The average conversion rate, prior to COVID-19 was 9.47%.

In April the average conversion rate was 10.08%. However, the average doesn’t tell the entire story. The average conversion rate eclipsed 10.5% seven times in April and surpassed 11% for three days.

These three metrics highlight the importance of advertising. With low ACOS and high CTRs and conversion rates, there has never been a better time to boost your PPC efforts.

Takeaway #3: Don’t Help Your Competition

Every seller who jumps out of the competition helps their competitors. With Amazon’s auction-based system, less competition means lower bids and a lower cost per click.

For April, the average cost per click (CPC) was the lowest it’s ever been at $0.66. Compared to the normal average of $0.90 to $1.00, the April average is incredible for sellers.

This change has been rapid. At the start of March, the average CPC was $0.80 and at the end of April CPCs had dropped to $0.62.

Hopefully you’ve been heeding our advice and kept your campaigns running. Advertising is cheaper and more effective than ever before.

Key Takeaways

Right now, it’s a perfect storm for Amazon sellers, and it’s important to strike while the iron is hot. We suspect that consumer buying habits will have changed, somewhat, for long into the future.

However, with the reopening of brick and mortar locations, some Americans will move away from Amazon as their primary source of purchasing.

Make sure to get the most out of the current situation. Obviously, this crisis has been tough on every American, but hopefully this climate for sellers will help companies that sell on Amazon stay afloat.