Amazon Ads Stats 2024

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In today’s digitally-driven commercial landscape, understanding and embracing emerging advertising platforms is crucial for your business’s growth and success.

Amazon Advertising is one such platform that continues to gain significant momentum, shaping the future of eCommerce advertising.

While you might have encountered various statistics about Amazon Ads, understanding their relevance and implications for your business might still be a riddle.

It’s time to solve that puzzle.

In this newsletter, we’ll simplify complex statistics into actionable business insights and share expert opinions on the future of Amazon Ads.

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Amazon Advertising Revenue Statistics

When it comes to statistics and trends, one aspect grabs attention like no other – top-line revenue.

Amazon now generates in access of $500 billion of revenue as a whole, but what are some of the standout stats when it comes to PPC and advertising?

Amazon generated $37.7 billion of its 2023 revenue from advertising

Amazon’s advertising services helped add over $37 billion to their top-line figures, and this is up 21% on 2021’s numbers.

It’s a small fraction of the half-trillion total revenue, but it continues to show significant growth.

Since this is a key revenue stream for Amazon, expect more ad placements and fewer organic search results, but potentially new advertising formats for sellers.

Amazon’s advertising business is growing faster than Google or Facebook’s

Amazon’s advertising business has been growing at a significantly faster rate than Google’s and Facebook’s, seeing a 25% increase in the third quarter of 2022 to $9.5 billion.

In comparison, Google’s ad revenue rose by only 2.5% to $54.4 billion, and Facebook’s advertising saw a decrease of 3.7% to $27.2 billion.

The gap between the size of Amazon’s ad business and that of Facebook has decreased from six times in 2019 to less than three times now.

Amazon’s growth rate is comparable to what Facebook’s was when its advertising business was of a similar size.

This is crucial for Amazon sellers as it indicates a shift in the advertising landscape.

As a result, we’re seeing more and more big-name brands – who previously avoided Amazon, mostly for reasons of exclusivity and brand control – come to the platform, and this is likely to continue.

Amazon Ads Click-Through Rate Stats

Click-through rate (CTR) is a key metric for Amazon advertisers because it shows how attractive your listings are in search results.

The average click-through rate on Amazon US is 0.36%

So, for every 1,000 times your ad shows up in search results, 36 people are clicking through to your listing.

That might not sound like a lot, but remember with Amazon PPC you’re only paying for the ad when a customer clicks on it.

CTR is growing, but that’s not all positive

The average CTR has grown across Amazon PPC campaigns by 2.9% year on year.

While at first glance this might like a positive trend, it also comes with a negative reality: more clicks on ads means fewer clicks on organic search results.

It’s further evidence that ads are taking up more and more real estate in search results and the Amazon seller who wants to drive growth simply must have a solid Amazon PPC strategy.

Amazon Advertising Conversion Rate Stats

The average Amazon PPC conversion rate is 14%

Amazon sellers will typically see 14% of PPC-driven sessions convert into sales. So as a seller, you can expect, on average, 14 sales for every 100 clicks on your PPC ads.

Knowing this average can be a big help in budgeting and predicting revenue from your PPC campaigns.

However, what is even more useful information is knowing what the conversion rate is for your particular category.

Amazon Advertising Cost-Per-Click Stats

Measuring cost-per-click (CPC) is one of the clearest indicators of the Amazon PPC landscape.

High, rising CPC’s naturally point to a more competitive auction for online retailers, but low, declining CPC’s would suggest businesses are carrying out less ad spending creating opportunities for smaller sellers.

But what is the current reality?

The average CPC in the US is $1.06

This is down from highs of $1.32 in December of 2021.

There was a genuine fear in the Amazon seller community at this point that the billions of dollars of Amazon aggregator money flooding the market would irreversibly drive CPC’s up.

Clearly, this has not been the case.

As stories emerged suggesting aggregators were struggling to operate newly rolled-up FBA brands with any sense of great success, sellers breathed a sigh of relief.

CPC’s have been coming down, and the PPC playing field looks set to remain even so that new and old sellers alike can utilize solid strategies to drive more ad revenue and overall business growth.

CPC’s differ across global marketplaces, and in some instances quite drastically.

Whilst the US is naturally the most expensive market to advertise in, Italy is the cheapest with an average CPC of just $0.28.

Selling in Europe certainly has an administrative complexity to overcome, but opportunity still abounds with low levels of competition clearly shown by the low cost to advertise.

Amazon Advertising ACOS Stats

ACOS, or Advertising Cost Of Sales, is your total ad spend divided by total ad revenue. It is one of the core metrics that gives a quick overview of your ad spend is performing.

But what are the key benchmark?

The average ACOS across Amazon is 22%

The average Amazon seller’s total ad spend is 22% of their ad revenue. So, for every $100 generated, the ad spend of the average seller is $22.

This is a 4.5x return on ad spend and means that advertising on Amazon is still one of the most profitable forms of eCommerce advertising.

With more and more of the online shopping volume shifting to Amazon each year, eCommerce brand owners would be well-advised to double down on paid traffic on Amazon.

By targeting an average spend of $22 for every $100 in average revenue, you can work towards a clear benchmark for success.

Expert Opinions On Future Amazon Advertising Trends

We’ve had the honor of interviewing a range of different Amazon Advertising experts. Each time I host someone on the topic, I can’t help but ask about their predictions for the future of Amazon PPC.

It’s an aspect of selling on Amazon that has continued to evolve over time and shows no sign of standing still.

So, here are some of the key predictions they shared.

PPC expert Mina Elias on Amazon’s social shopping future

When sitting down with Mina of leading Amazon PPC agency Trivium recently, he had a bold prediction about the direction of Amazon advertising:

This would certainly create a new trend for Amazon sellers and offer yet more opportunities to leverage Amazon’s advertising capabilities.

PPC software creator Michael Faccini on thinking holistically

Michael, the founder of AdBadger, shared his views about the future of Amazon PPC. He believes that the siloed approach to advertising that Amazon sellers have taken in the past has to be expanded to think more broadly about a holistic marketing effort:

The Amazon advertising stats we’ve covered in this article suggest that this mindset will be crucial for driving more profitable ad revenue with Amazon ads in the coming years.

Rather than simply seeing ad spend as an immediate ticket to profitable sales, savvy Amazon sellers will utilize on and off-Amazon marketing to acquire customers and build a strong brand over the long haul.

PPC automation specialist Bradley Davis on using AI for creativity

Quartile’s Bradley Davis shared excitement for how AI can be utilized to assist with creative aspects of marketing.

Amazon continues to release more creative ad formats (e.g. allowing lifestyle images with Sponsored Brands headline ads), so Bradley’s tips on utilizing AI for creative development could definitely become an asset in driving more average revenue.

Amazon Advertising Statistics: What the past says about the future

The Amazon advertising stats are clear for all to see – the growth of the platform will only continue.

Whilst competition has plateaued in recent times with relatively static cost-per-click averages, we can expect more businesses to continue to move to the platform and push prices higher in the long run.

This means that understanding key metrics like average conversion rate is more important than ever to ensure you stay one step ahead of your competition.

Sellers should also look at expanding their Amazon PPC efforts with more placements beyond Sponsored Product ads (Sponsored Brands and Sponsored Display), more marketplaces, and driving more external traffic.