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    07-Amazon Sponsored PPC Auction Process

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    davidwanjunji.dm5
    Amazon runs an auction when customers search for products or keywords on its site. While bid amounts are a factor, Amazon also considers a product's relevancy to the search query, conversion rates, and total sales value when determining ad placements. The winner of the auction pays slightly more than the second highest bid if their ad is clicked, following a "second price auction" model. Optimizing bid amounts, relevancy, conversion rates, and understanding this auction process can help advertisers improve their ad placements and campaign effectiveness on Amazon.

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    07-Amazon Sponsored PPC Auction Process

    Uploaded by

    davidwanjunji.dm5
    12 views2 pages
    Amazon runs an auction when customers search for products or keywords on its site. While bid amounts are a factor, Amazon also considers a product's relevancy to the search query, conversion rates, and total sales value when determining ad placements. The winner of the auction pays slightly more than the second highest bid if their ad is clicked, following a "second price auction" model. Optimizing bid amounts, relevancy, conversion rates, and understanding this auction process can help advertisers improve their ad placements and campaign effectiveness on Amazon.

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    Amazon runs an auction when customers search for products or keywords on its site. While bid amounts are a factor, Amazon also considers a product's relevancy to the search query, conversion rates, and total sales value when determining ad placements. The winner of the auction pays slightly more than the second highest bid if their ad is clicked, following a "second price auction" model. Optimizing bid amounts, relevancy, conversion rates, and understanding this auction process can help advertisers improve their ad placements and campaign effectiveness on Amazon.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    12 views2 pages

    07-Amazon Sponsored PPC Auction Process

    Uploaded by

    davidwanjunji.dm5
    Amazon runs an auction when customers search for products or keywords on its site. While bid amounts are a factor, Amazon also considers a product's relevancy to the search query, conversion rates, and total sales value when determining ad placements. The winner of the auction pays slightly more than the second highest bid if their ad is clicked, following a "second price auction" model. Optimizing bid amounts, relevancy, conversion rates, and understanding this auction process can help advertisers improve their ad placements and campaign effectiveness on Amazon.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Amazon Sponsored PPC Auction Process

    1: Understanding the Auction Dynamics:


     Amazon runs an auction when customers search for a specific product or
    keyword.
     Winners of the auction get different placements, and these placements are not
    solely based on bid amounts.
    2: Factors Influencing the Auction:
     Bid Amounts: The bid is a crucial factor. Higher bids increase the chances of
    better placements for your product.
     Relevancy: Amazon considers the relevancy of your product to the customer's
    search. Unrelated products are less likely to be shown.
     Example: If a customer searches for "iPhone 12 cover," Amazon won't
    show unrelated products.
     Example: Under the same search, "iPhone 12 cover," if an advertiser bids
    for "iPhone charger," a higher bid may be required due to the relatedness
    of the products.
     Conversion Rate and Total Sales Value: Listings with better conversion rates
    and higher sales are favored by Amazon.
     Example: A product with a high conversion rate is more likely to be shown
    than a product with a lower conversion rate, even if the bid is lower.
    3: Examples Illustrating the Auction Process:
    Consider the scenario where two sellers are competing for the keyword "seller" to
    showcase their products on Amazon.
     Seller 1's Bid: Seller 1 decides to bid $1.5 for the keyword "seller," expressing a
    willingness to pay this amount for each click on their product.
     Seller 2's Bid: On the other hand, Seller 2 places a bid of $1.2 for the same
    keyword, indicating a slightly lower willingness to pay per click compared to
    Seller 1.
    Now, while bid amounts are fundamental, it's important to note that the Amazon auction
    process doesn't solely prioritize the highest bid. Other factors like relevancy, conversion
    rates, and total sales value come into play.
     Relevancy: If Seller 1's product is more relevant to the customer's search query,
    such as offering a diverse range of sellers' products, Amazon may give it
    preference over Seller 2's bid.
     Conversion Rate and Total Sales Value: Suppose Seller 1 has a higher
    conversion rate or overall better sales performance compared to Seller 2. In that
    case, Amazon might favor Seller 1's product, even with a higher bid from Seller
    2.
    Therefore, the outcome of the auction isn't solely determined by bid amounts; it's a
    nuanced process that considers multiple factors to ensure a relevant and satisfying
    shopping experience for Amazon customers.
    3: Second Price Auction:
     The winner of the auction (first placement) pays slightly more than the second-
    highest bid if their ad is clicked.
     This is known as a "second price auction," ensuring fair pricing for the winning
    advertiser.
     Example: If Product A wins the first placement with a bid of 75 cents, they
    might pay 76 or 77 cents, slightly more than the second-place winner.

    Tip: Understanding the nuances of the Amazon Sponsored PPC Auction Process
    involves considering bid amounts, relevancy, conversion rates, and the second price
    auction mechanism.
    By optimizing these factors, advertisers can improve their product placements and
    maximize the effectiveness of their Amazon advertising campaigns.

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