According to a new report, Amazon’s most popular ad product, Prices for Sponsored Product ads, are continuing to go up. The report, which came from eMarketer, contains data from multiple firms that mange clients who purchase Amazon ads.
According to Merkle, among North American clients who have been spending on Amazon for at least a year, Q4 2019 spending on Sponsored Product ads has gone up 63%.
Tinuiti data shows that spending on Amazon sponsored product ads went up 30% among its clients during the same period of time. Pacvue clients saw similar increases too.
The three companies – Merkle, Tinuiti, and Pacvue – reported 12% to 16% increases in the cost-per-click of Sponsored Product ads.
This is not a sudden increase, eMarketer notes:
“Prices on Sponsored Product ads have been rising for a while. In Q3 2019, Pacvue reported they were up 13%, while Merkle reported an increase of 11% and Tinuiti reported a 10% price jump.”
Prices of Sponsored Brand ads, during the same period, have been falling. This seems to be due to Amazon adding more inventory for the format in locations that are less likely to result in conversion.
But, even with these declines, Sponsored Brand ads remain more expensive on a CPC basis than the average Sponsored Product ad.
It has been estimated by eMarketer that Sponsored Product and Sponsored Brand ads account for the bulk of Amazon’s ad business:
“These, and other primarily keyword-targeted search ads, will net Amazon $9.79 billion in US search ad revenues this year, up from just more than $7 billion in 2019.”