On Amazon, with hundreds of sellers and an immense selection of products, everything you'd like to buy is just a click away. And while this is ideal for buyers, it can be a major challenge for sellers trying to get their products to the top of Amazon’s listings.
This is where search engine marketing (SEM) comes in, helping you optimize the visibility of your listings. But how much does Amazon search engine marketing cost, and how does it work? Let's find out with the help of our experts.
Table of Contents
- What Is Amazon Search Engine Marketing?
- Amazon SEM: How Does It Work?
- Setting Up an SEM Strategy on Amazon
- Amazon SEM Cost: What Should Companies Pay?
- 4 SEM Agency Pricing Models
- Amazon SEM Pricing: Determining Factors
- Amazon Search Engine Marketing Cost: Finishing Thoughts
- Amazon Search Engine Marketing Cost FAQs
What Is Amazon Search Engine Marketing?
Amazon search engine marketing or SEM refers to a paid digital advertising strategy, used by advertisers to boost the visibility of their products or storefront on Amazon through the platform's search result pages (SERPs).
The idea behind Amazon SEM isn’t something necessarily new. Advertisers have been using SERPs to boost the visibility of brands and products via search engine optimization (SEO), pay-per-click advertising, and other paid or organic strategies to drive more traffic and conversions for quite some time now.
The next question that begs to be answered is: does this mean that SEM is SEO? The answer is both yes and no. SEO focuses on the organic aspect of driving traffic and conversions. SEM, on the other hand, represents a comprehensive method focusing on paid strategies.
Just like SEO, SEM helps with raising awareness. With branded ads or products appearing higher in the rankings (or Amazon listings) on the platform, the better the chances that someone will see them, click on them, and ultimately, buy them. Just like in the case of SEO, being on top of the SERPs can help you drive conversions and improve bottom lines.
Amazon SEM: How Does It Work?
SEM uses paid strategies to ensure that your products are easily discoverable on Amazon. Just like in the case of Google, when a visitor types in a certain product term into the search bar, SEM lets your products appear higher for that query.
The strategy involves targeting specific keywords with product descriptions through different forms of Amazon campaigns, including sponsored ad or brand campaigns or product display ads.
A good SEM strategy revolves around accurate keyword research. However, that doesn’t mean you should neglect organic approaches. While investing in complicated search engine optimization tactics might seem a bit frightening to newcomers, organic efforts do pay off. For instance, data suggests that 74% of US users start their product search on Amazon, but 70% never get past the first page.
Having SEO-friendly product listings means that you can have better luck reaching these visitors organically. And when you have a strong presence on Amazon by default, investing in advertising campaigns with the right keywords can come rather naturally.
Or you may also opt to boost your initial sales with a well-developed paid campaign, while working on your organic presence in the background.
Setting Up an SEM Strategy on Amazon
Getting started with a comprehensive SEM strategy can seem like a daunting task, even if your goals are clear: sell more on Amazon. Below are a few guidelines you can follow to get the most out of your marketing efforts.
- Set clear goals
- Do your research
- Select your tactics
- Keyword research
- Set a budget
- Focus on creativity
- Track, test, and innovate
Set Clear Goals
Apart from selling, what other goals do you want to achieve with your strategy? Once a user clicks on your Amazon ad or product listing, do you also want them to visit your site? Do you have an app you want them to download? Do you want them to subscribe to your newsletter? Setting up your key performance indicators, objectives, and key results can help you reach your SEM goals and explore new possibilities for even better results.
Do Your Research
You can’t jump into any digital marketing strategy without research and planning. Assess how others are approaching advertising on Amazon. See what keywords or competitive brands are used to drive campaign results and examine how they approach paid tactics.
To maximize your efforts, you must also examine their organic tactics. How do they write product descriptions? What are they doing with their storefront? What are they doing to maximize the potential of said storefront? Knowing what trends and tactics drive results takes the guesswork from the equation, enabling you to concentrate on what truly matters.
Select Your Tactics
Will you opt for product display ads or traditional ad campaigns? By knowing your goals and researching trends, you can have a better idea of which methods will bring you the best results.
Keyword Research
Using the right keywords to target is essential both in your organic and paid endeavours. Based on your goals, opt for a variety of keywords with various search volumes. First, familiarize yourself with how Amazon approaches keyword research or reach out to an experienced marketing agency to help you figure out the best phrases you should rank for.
Set a Budget
Amazon SEM costs can get expensive. Setting an advertising budget before you start with your campaigns can help you keep everything optimal without going overboard with ad spending. Consider consulting advertising agencies that can help you better understand how Amazon SEM prices work and what would be an ideal budget in your case.
Focus on Creativity
Compelling ads, product descriptions, and high-quality and unique photos can all attract potential buyers. Think about the creative aspect of your campaign. Strive to incorporate your brand’s identity into your SEM efforts, so people recognize your products and company, boosting the likelihood of them becoming returning customers, and ultimately, why not even brand advocates?
Track, Test, and Innovate
Complicated approaches such as SEM might not show instantaneous success on all fronts. There are always campaigns to optimize, audiences to research, and trends to adhere to. Test your strategies, try different keywords, and set smaller or larger budgets, until you are getting the results you initially wanted.
Amazon SEM Cost: What Should Companies Pay?
A strong SEM strategy on Amazon helps you drive more search result visibility and boost product sales. Amazon Ad’s Sponsored Products can also help you boost sales by generating ads appearing in related searches and product pages. Still, how much will Amazon SEM cost?
Marketers will tell you that every ad strategy is different, making it difficult to give you an exact quote right off the bat. Still, WebFX’s data suggests that small- and medium-sized businesses invest around $9,000 to $10,000 per month.
That said, the cost of an Amazon SEM strategy will depend on:
- Budget
- SEM agency experience
- Ad strategy
- Flat-rate model
- Strategy size
4 SEM Agency Pricing Models
Typically, the best route to take when opting for SEM tactics is to team up with a seasoned agency. They usually have several pricing models, with the following four being the most prevalent.
- Ad revenue percentage
- Ad spend percentage
- Flat-rate model
- Capped management based on ad spend percentage
Ad Revenue Percentage
As the name suggests, this pricing model includes taking a specific percentage of the campaign’s revenue. There are no monthly flat fees, but a percentage based on the strategy’s results. This model can be highly attractive for businesses with smaller budgets, but it does have its flaws.
The advantages are that you pay based on the results (revenue generated), and you can minimize the cost of your campaigns in slow seasons. On the flip side, you can’t predict your monthly SEM budget, and the pricing can spike during busy seasons, Still, the lack of price predictability is what makes this model risky for some businesses.
Ad Spend Percentage
In this model, your SEM pricing will depend on your monthly advertising budget. This model offers more predictability, and agencies may take 5%-20% of your spending as their fee. This enables you to have more control of your management fee and will also decrease the risk of agencies targeting low-value advertising opportunities to generate revenue.
On the other hand, the agency may put more effort into increasing your ad spend to boost its revenue. Raising your spend will directly boost Amazon SEM advertising costs, and your fee will be the same even if the campaigns underperform.
Flat-Rate Model
As the name suggests, this model includes paying a flat rate each month for your SEM efforts. This also offers predictability and allows you to better optimize your advertising budget. Busy seasons won’t increase your pricing, even if you choose to boost your ad spend.
However, depending on the agency you work with, this may also mean paying higher prices upfront, and receiving fewer deliverables because of the flat-rate nature of the partnership. Extra requests and accompanying services that help you get better results may cost extra.
Capped Management Based on Ad Spend Percentage
This pricing model enables you to pay a percentage of your ad spend or a flat rate. For instance, an agency may ask for 14% of your total ad spend or $600 every month, and how you pay depends on whichever amount is higher. According to this model, if your brand spends $5,000 on ad campaigns a month, you will pay the 14% ($700/month) because it’s higher than $600. Conversely, if the spend is $2,200, you will pay $500, as it is higher than 14%.
This model gives you predictable pricing, enables you to be flexible with your monthly ad spend, and gives you the chance to scale your SEM pricing together with your budget. On the flip side, you may pay more than you’d like for in-house management or settle for smaller budgets because of the capped management. Finding an agency that fits your price range may also be difficult.
Amazon SEM Pricing: Determining Factors
The agency’s pricing model isn’t the only thing that will determine what you will pay for SEM campaigns. Some things may be within your control, while others are not. Either way, you still want to know about them before you start working with an agency.
Ad Strategy
Your advertising goals play a pivotal role in your ad strategy and will influence SEM campaign costs too. Whether on Amazon or on any other platform, if you are selling goods in a competitive sector, you need a competitive strategy and possibly, an experienced agency. Otherwise, your business will blow through hundreds and thousands on useless campaigns that won’t resonate with Amazon users.
Crafting a comprehensive strategy that addresses every aspect of Amazon search marketing requires expertise, knowledge, and experience. Naturally, a large, and well-rounded strategy will cost more, especially if your agency guarantees excellent results.
Agency Experience
As hinted above, the experience of the agency will also determine Amazon SEM prices, as experts often cost more. You pay for the knowledge, which can help you optimize ad spend, product descriptions, and other ad characteristics that ensure that people will ultimately purchase your products.
Working with low-cost agencies may not mean sacrificing results for saving money upfront, but in some cases, the wrong partnership can cost later. Don't get us wrong, outsourcing doesn’t mean poor quality, but you do have to be careful when agencies quote prices that are too good to be true. Often, they are.
Ad Spend
Ad spend can directly influence how much you pay agencies. Usually, you will be expected to have an allocated budget for ad campaigns, and agencies will also create a strategy based on that sum. Your spending may also impact the agencies you will be able to work with. High-profile companies may not partner with you if your budget is too low, as they might turn down the option to create a comprehensive campaign for a small budget.
That’s why it’s essential to research your competitors, industry, and Amazon trends for your specific case. Assess everything and create a budget around that. Be clear about your goals and look for an agency with enough flexibility and experience to help you make the most of your spending.
Campaign Size
The more campaigns you wish to run at the same time, the more you will have to pay for SEM strategies. Or, if you are working with a set budget, you may have to put up with restricted campaigns. For instance, if your budget is limited to $6,000 per month, but you want 10 different campaigns, chances are, you won’t be able to get the most out of either campaign as you don’t have enough resources allocated to maximize their potential.
In these cases, taking advantage of your agency’s knowledge can help you optimize the relationship between your budget and campaign size. Combine this with your goals and their experience, and you will get the most value for your investment.
Amazon Search Engine Marketing Cost: Finishing Thoughts
From campaign size through ad spend to agency experience and pricing models, several factors determine how much you will pay for your SEM strategies. Still, hiring an experienced team will enable you to harmonize your needs and goals with your budget, and get the most value for your efforts.
Amazon Search Engine Marketing Cost FAQs
Are SEO and SEM the same?
No, SEM refers to all paid search strategies on Amazon, Google, social media, and other platforms where you can launch paid campaigns based on search. Initially, SEM referred to both paid and organic approaches, and back then, SEO used to be a subset of SEM.
Is PPC SEM?
No, PPC is a paid advertising approach under the search engine marketing umbrella.
Does SEM help SEO?
Organic and paid search approaches have complemented each other from the start of digital marketing. Starting with SEM can help you generate instantaneous traffic that your organic efforts can rely on when starting. On the other hand, starting with an organic approach sets the stage for complementary paid campaigns that will only boost the traffic you get from organic sources.
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