The Information has reported that the cost of placing ads on Amazon’s main marketplace has increased by more than 30% since the start of the pandemic, an apparent sign of the intense demand among vendors to promote their products on the platform: “Consumer brands and third-party sellers saw the cost per click of sponsored product ads on Amazon average $1.22 in the second quarter, up from 90 cents at the start of the Covid-19 shutdowns…”
Pacvue data apparently shows that, as Amazon ad prices have risen, the RoI has dropped by as much as 26%.
The Information said that Amazon advertising revenue was $7.9bn for the second quarter of 2021 – up 87% year-on-year, making it one of Amazon’s fastest-growing businesses. And while the advertising industry often refers to the “duopoly” in digital ads dominated by Google and Facebook, there’s now talk of the “triopoly,” with Amazon as the third member.
The bulk of Amazon’s ad business comes from sellers competing for placement on the first page of product search results. Consumers who search for, say, “toothpaste,” will see more than 10 separate ads on the page, including those for sponsored products.
