How is Amazon's monthly advertising fee calculated? What advertising methods are there?

Advertising on Amazon is a key means to increase product exposure and promote sales. However, investing in advertising means investing money, and Amazon can charge advertising fees on a monthly basis, but some novice merchants don’t know how to calculate it. Here is a detailed introduction.

1. How is Amazon’s monthly advertising fee calculated?

The cost calculation formula is: Advertising cost = Number of impressions ÷ 1000 × CPM. The specific amount of CPM depends on factors such as the location, size and display quality of the advertisement.

Amazon's monthly advertising fees are calculated based on the advertising method and advertising results chosen by the seller. There are two main advertising methods: keyword advertising (Sponsored Products) and display advertising (Headline Search Ads).

Sponsored Products: This is the most common advertising method on Amazon. Sellers set bids for keywords, and when buyers search for these keywords, the seller's products will be displayed in a prominent position on the search results page.

Advertising costs are paid on a pay-per-click (PPC) basis, meaning that sellers only pay when buyers click on the ad and enter the product details page. The cost calculation formula is: Advertising cost = number of clicks × cost per click (CPC). The specific amount of CPC depends on the competition level of the keyword and the seller's ad quality score.

Display ads (Headline Search Ads): Display ads are ads displayed at the top or side of the search results page, usually in the form of brand or product titles. This type of advertising is charged on a cost per thousand impressions (CPM) basis, meaning that sellers need to pay a certain fee for every thousand impressions of the ad.

2. What are the advertising methods?

In addition to the two main Amazon advertising methods mentioned above, Amazon also provides several other advertising methods, such as Product Display Ads, Video Ads, and Sponsored Brands. These advertising methods have their own characteristics, and sellers can choose the appropriate advertising method according to their own needs and budget.

Product Display Ads: This advertising method allows sellers to display product ads in different locations on the Amazon site, such as product detail pages, shopping cart pages, etc. This advertising method is usually billed in a pay-per-click (PPC) model.

Video Ads: Video ads are a type of advertising that displays product videos on the Amazon platform. Video ads can attract buyers' attention and increase their willingness to buy products. This type of advertising is usually billed in a pay-per-click (PPC) model.

Sponsored Brands: Sponsored Brands is a type of advertising that displays brand logos and products, usually appearing at the top or bottom of the search results page. This type of advertising can help sellers increase brand awareness and exposure. The cost calculation method for sponsored brand ads is more complicated, and usually requires negotiation and budget setting based on the advertising effect.

Amazon's monthly advertising fee is calculated based on the advertising method and advertising effect. Sellers can choose the appropriate advertising method according to their own needs and budget to increase product exposure and sales performance. Sellers also need to continuously optimize advertising strategies, improve advertising quality and conversion rate to achieve better advertising results.

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