Amazon is a massive platform that reaches literally billions of users. It can be one of the best ways for Amazon users to expand their reach to acquire more customers and more importantly to improve their brand recognition. For many businesses, launching an Amazon seller account is the first step toward building a successful ecommerce business that taps into one of the largest marketplaces in the world.
Unfortunately, there are costs associated with selling on Amazon, and depending on who you are, what you’re selling, your selling price, how many items sold, and most importantly, how much you’re making on that sale, will determine whether you can afford to sell on Amazon.
Amazon works for both large and small businesses, but the costs associated may be more than the smaller sellers can afford depending on profit margin. Before you decide whether it is worth it to sell on Amazon, we’ll break down how the whole process works and what you can expect to pay so that you have a better idea of what you’re getting into. It helps to understand the fee schedule, the different selling plan options, and the extra charges that can come from shipping, storage, and fulfillment.
We’ll also outline some of the benefits of using Amazon paid ads, besides the massive marketplace. One thing to note is that Amazon offers a number of services beyond just a platform for selling. Most sellers don’t realize at first, that Amazon offers resources for order fulfillment, advertising, affiliate sales linking, and other options. You can access advertising tools, affiliate partnerships, brand storefronts through Amazon stores, and even full logistics support through fulfillment by Amazon.
All of these features do increase the overall cost though, so we’ll dive into the benefits of each so that you understand what all you do and don’t need from Amazon before you ever start selling. Understanding which services you actually need can make a big difference in your net profit.
The actual setup process for becoming a seller on Amazon is fairly easy. Amazon will actually walk you through the process by making a few decisions and then setting up your Amazon seller account, selecting a selling plan, and completing the registration steps needed to begin selling.
Before you begin that process though, the key thing is to understand your finances, what you’re looking to do and the scale you’re trying to sell at. Some businesses sell casually, while others build a full-scale operation shipping inventory into Amazon fulfillment centers around the country. Amazon actually offers a marketing agency program to help sellers get to market and offer their goods, but this means additional account fees, marketing costs, or other miscellaneous fees.
If you’re not going this route and have your own marketing agency, or are doing your marketing yourself, then you would just sign up for a seller account. There are two business models that most sellers use.
Third-Party Seller: This is a person who sells goods that another person makes. This means you rely on the supply you are given by the third party and sell the goods accordingly. Many Amazon sellers start this way by sourcing products and listing them on the marketplace.
Brand Owner: You make and sell your own goods. This puts you in charge of the supply and sale process. You sell exactly what you are able to produce. Some businesses do both. For example, a brand may sell its own products while also reselling related items such as video game accessories, pet supplies, or gourmet food to broaden their catalog.
When setting up an account, you should consider whether you want to do one or the other, though some businesses do handle both ends of the process, selling their own goods as well as those provided by third-party suppliers.
Once you know what you want to do in terms of the types of selling you want to handle. Go to seller.amazon.com to register your Amazon seller account. Note that you should already have a standard Amazon account before you begin the process. You’ll also need several pieces of information to complete the actual sign-up process.
We’ll go ahead and bullet point the information you should have for clarity.
All of the information you have to provide is fairly standard for setting up any business type of account, so you shouldn’t have any issues with actually opening your seller account.
When you complete the process, you are given access to a platform called Amazon Seller Central. For informational purposes, we’ll break down Amazon Seller Central into its core components and explain what it does for sellers.
Amazon Seller Central is essentially your eCommerce hub for selling on Amazon. It allows you to manage all aspects of the selling process, from sellers manage listings, tracking inventory, monitoring Amazon account balance, and overseeing orders. They even have tutorials on how to sell on Amazon and a fees calculator to help you see what you’ll be paying for selling your products.
The main benefit of the platform is that you can set up your sales pages, adjust product listings, descriptions, rules, prices, and anything else related to the actual products you sell. It also assists with order processing, monitoring shipping rates, and managing inventory stored in an Amazon warehouse. From here you can add and edit products as you like, adjust, improve, or remove listings and keep track of all your orders.
Amazon also provides tools for analyzing performance, including cost estimates for Amazon seller fees, referral fees, and other selling fees tied to each order.
Additionally, there are brand services. To access these services, you have to be a registered brand on Amazon. To do this, you must apply to the Amazon Brand Registry, which requires more paperwork.
What you’ll need:
This can be a time-consuming process, even if you have all your paperwork together. Amazon has a brand approval process that can take between 1 and 30 days to complete.
Why is this important? Recognized brands get a number of advantages. They get customized product pages with their brand logos attached, higher brand recognition through the seller platform, and a branded storefront. This level of recognition is invaluable to growing both your sales and your web presence in crowded product category pages. It guarantees that your brand name and logo will be seen by more people as they browse and buy products on Amazon and it improves your chances of winning the buy box, which often leads to higher conversion rates.
Setting up your Amazon Seller Central can be done manually or you can pay for a service through Amazon to have it done for you.
The last official step before you begin selling is the creation of your actual store on Amazon. This is fairly straightforward and is done through templates. Once you select your brand name and click create store, you’ll be directed to add your brand name and logo and select a pre-built template for your store.
There are a few different options, but select the one that presents your products in the way you want them seen and displays your brand in a way that is visible and identifiable. This comes down to personal taste but is an important part of the store setup process. Many brands use this space to highlight collections, seasonal promotions, or categories like personal care, amazon device accessories, or personal computers.
From there you move on to the inventory setup process where you can add products to your store. This can be done one at a time or all at once by uploading the products to your store. You can follow the instructions through Amazon’s helpful product upload guide to get the gist of how to do it.
At this stage, sellers also decide how products will be fulfilled. Your fulfillment method matters because it directly affects your costs and delivery speed. Many brands choose fulfillment by Amazon FBA, which sends inventory to an Amazon fulfillment center where Amazon handles packing, shipping, and customer service. Other sellers ship products themselves and manage their own shipping costs.
After you have all your product pages set up and you’re happy with everything, the last step before you launch the store so that it goes live is to submit it to Amazon for approval, which takes 72 hours. As you can see, beyond the cost, which we’ll discuss further in a moment, there is a significant type lapse between account creation and beginning the selling process.
Selling on Amazon is not nearly as simple as it may seem at first glance. To sum up the entire process, you need to think about the type of seller you want to be, gather all the important documents, create your seller account, choose their fulfillment method, get your brand name approved (if applicable), set up your store, and get it approved.
Now that we’ve broken down the process of selling on Amazon, we’ll do a deep dive into the actual cost of selling on Amazon. This can get fairly complicated so we’ll try to break the fees down in a way that lets you figure out what you have to pay, what you may want to pay for, and what you have no use for.
Beyond just the storefront, there is a whole plethora of options and services that Amazon provides to sellers. The trouble is that each of these services has additional fees associated with them. Amazon charges a combination of Amazon seller fees, referral fees, logistics costs, and optional marketing expenses. These costs can really add up, especially if you go in for more than what you need. The total depends on your selling price, your product category, and whether you use fulfillment by Amazon or handle shipping yourself.
Before we begin, one quick thing to note is that the costs we are quoting are at the time of publishing and are subject to change. Use these costs as a guideline for what you can expect to pay.
There are two seller subscription plans and each has its own costs and features.
The individual plan is free to set up and the fee is a flat $.99 per unit, at the point the item sells. You can create new product pages with an individual seller account, but you won’t have access to many of the customized reporting options and inventory management features. Sellers using the individual plan do not control their shipping rates, and Amazon standardizes shipping credits for orders. This account also cannot grant access to additional team members.
The shipping fees are standardized and set by Amazon instead of the seller. You will also not have access to gift cards and promotional sales options. The individual account is also a single account that belongs only to the account holder, permissions to alter the product pages and other services cannot be given to other users.
We can’t say whether this type of account will be right for you, but for individuals that do limited numbers of sales and just want a marketplace to host their products, the individual seller account is a good option to start with. If sales volume increases or you need access to other features, you can upgrade. Amazon also offers temporary suspension of sales for any reason to either plan holder. This is useful if you run out of stock or suffer a sudden emergency.
The professional plan comes with a flat fee of $39.99 as a monthly fee. There is no per-product fee directly associated with the plan (though other fees may apply depending on services). You are also given access to all of the product management and reporting features that are offered through a seller account, unlike with an individual account.
One major difference is that with a professional selling plan, the seller is able to set the shipping rates instead of Amazon. Sellers are also given access to promotional offers, gift cards, and featured listings on products. You are also able to calculate U.S. sales and use taxes on your products through an available feature. Professional sellers can also create discounts, manage advertising, and adjust shipping rates directly. Lastly, a professional seller has the ability to grant access and use rights to other owners/users.
The professional plan is ideally suited for larger sellers that want more control over their products and reports and who do such a sales volume that the per-item fee would be an unnecessary expense. Starting sellers may choose to go with the professional account straight away or may choose to wait and upgrade to it.
The next major expense is Amazon seller fees charged on each transaction. These typically include referral fees, a variable closing fee in some media categories, and other selling fees tied to the sale. For individual plan owners, the fee ranges from $.45 to $1.35 per sale, on top of the standard $.99 fee. This means sellers can expect to pay between $1.44 and $2.34 per item sold. These fees are non-negotiable and are applied by Amazon.
Professional plan fees are percentage-based and can vary greatly. There are two types of fees assessed, closing fees, and referral fees which are paid on a referral fee percentage of sale basis and range between 6% and 25% depending on the product category, though the average is 13%. The referral fee is calculated based on the total sales price, which includes the item price plus shipping paid by the buyer. Professional plan holders can track fees with a fee calculator to determine the cost of fees associated with the sale of products.
Certain categories like books or other media item listings may also include variable closing fees. Sellers should always check the current fee schedule to see what applies to their specific category.
Depending on the place of origin, taxes can vary wildly so we can’t give you an accurate estimate of what taxes, if any, are applicable. Amazon does provide professional sellers a tax calculator for U.S.-based sales. For multinational sales, the taxes can be quite high, so it is best to do some research into these costs to determine what your product is going to cost you so that you can set your shipping costs accurately.
This is what marketers refer to as the “landed cost” of an item, you take the base price of making the item and include the cost to get it to the customer to determine how much it will cost you in total. If you’re planning on selling on Amazon, it’s important to understand the role taxes play in the sale of products.
The cost of a GTIN may vary depending on the size and scope of your product sales. A standard GTIN for just a few products is a one-time fee of $30. This number ensures products can be tracked through Amazon’s system and shipped properly through Amazon fulfillment centers. For large companies with many products and expectations to add more, there is an annual fee associated with your GTIN and multiple GTINs may be necessary.
You can get an exemption to this, but to be a legitimate brand you must have a GTIN on every product. This is mandatory and facilitates shipping around the world. You should figure out the monthly cost of your GTINs and factor that into the cost of products just like taxes.
The first thing we’ll talk about, and this is one that big business may want to invest in to protect their property, is a registered trademark. You should already have this if you are a branded company, but we’ll assume you’re just starting and need to know the cost. Depending on the level of protection you want, the cost ranges from $225 to $400. This is not mandatory but should be considered essential if you’re using Amazon to build your brand.
Second, and this is one that has to do with getting your products sold, is Amazon PPC Ads. Advertising is an important part of getting your products sold and investing in advertising through Amazon’s PPC ads can help you drive sales to your store. There are a number of ad types, some are directed at new customers and some are directed at marketing towards existing customers through remarketing ads.
Lastly, there are additional marketing costs for influencer marketing and marketing agency representation. These are associated with the marketing methods you choose and whether or not you employ help from Amazon or an outside marketing agency.
The last thing we’ll talk about in regards to fees and Amazon are the fees you pay as part of building your brand and marketing your products on Amazon. There are a number of things you can do from using Amazon’s marketing services to maximizing the SEO on your product pages to improve Google rank or running ads through the Google Ads program on outside sites or through SERP.
Brands using fulfillment by amazon also need to consider FBA fees, including FBA fulfillment fees, FBA storage fees, and monthly storage costs. Inventory stored in Amazon’s network is measured by cubic foot, and the longer products sit in storage, the more storage costs accumulate. Sellers may also face a long term storage fee for slow-moving inventory.
In addition, sellers using FBA fulfillment may pay for inbound shipping, inventory placement service, and occasionally an inflation surcharge applied to logistics operations.
Returns can also trigger a refund administration fee, which Amazon deducts from the refunded referral fee.
These costs are manageable when accounted for properly, but ignoring them can quickly eat into profits.
Using Google Ads and Ad Extensions can help you develop customer data, but these costs are based on each individual situation, like the optional fees above, these services aren’t necessary, but they may benefit your brand.
Marketing and SEO can get expensive but is one of the main ways to drive your sales up. If you’re looking to build brand exposure and sell more products quickly, then these are important steps to take.
These are the basics of many of the different fees associated with being a seller on Amazon. Between Amazon fees, referral fees, fulfillment fees, shipping costs, storage fee charges, and other account fees, the real cost of selling is determined by your full expense structure. The exact amounts and total costs will vary, but as we’ve discussed, the total cost versus profit on Amazon is calculated by adding in all of the associated fees, the cost of the product, and subtracting that from the sale price.
By knowing this, you can determine whether Amazon is the right platform for you. The best way to evaluate profitability is simple. Add up your product cost, Amazon seller fee charges, logistics costs, and marketing spend. Then subtract that from the total sales price. You may decide the benefits are worth the increased costs or you may decide that you don’t have the right procedures in place to make it worthwhile. The last tip we will give is to get help from a marketing agency or advertising firm to help you set up and run your online shop so that you can maximize the potential for profits.
When it comes to Pay-Per-Click marketing, advertisers are inundated with an endless list of metrics to track and measure. That’s because, unlike other traditional methods of advertising, PPC offers some fantastic ways to keep tabs on every aspect of a campaign. There is no denying the fact that PPC ad campaigns are data-driven to the max.
This also makes it easy for marketers to lose themselves in all the clicks, impressions, and other rates that may or may not make a real difference to the bottom line. After all, not all metrics are equal.
This begs the question: which figures are the most important to monitor?
There isn’t a one-size-fits-all answer because the most critical metrics vary according to the goals of a PPC campaign. Still, there are a few KPIs that are fundamental for the success of every campaign.
Here are the top metrics and KPIs to monitor:
The number of conversions resulting from a campaign is almost always the first priority of an advertiser unless their objective is only brand awareness. Ultimately, profits start with conversion, so it’s the number one priority of any business.
To measure the conversion rate, divide a campaign’s conversions by its total clicks.
For instance, a campaign with fifty clicks and five conversions will give a conversion rate of 10% when expressed as a percentage. Even though conversions are significant for campaign managers, they sometimes create campaigns optimized for clicks instead.
A click is the starting point of any conversion, making it a preliminary success indicator of a PPC campaign. It takes into account the number of people who clicked on your ad.
These clicks help campaign managers tweak their approach from time to time, even during a campaign’s running time. They can check on ads’ clicks throughout to see which are performing well to put more bids on them and pause those ads completely that are not faring well.
For mid-month performance measurements, clicks are a handy KPI, but of course, you cannot rely on just clicks to determine a campaign’s success.
Similar to how your clicks generated in a campaign measure its performance, CTR plays a vital role in determining the success of a campaign’s performance.
It is measured by the division of the total number of clicks generated by your campaign in a particular period from the total impressions. So, for instance, if your ad got 150 clicks and the total impressions were 1,000, then your CTR is 15% in that case.
It is essential to understand that a perfect CTR does not exist because industry types and other variables affect the PPC performance.
According to 2018 research, the differences in the average CTR of the auto industry and the dating and personals industry were 4% and 6.05%, respectively. So, suppose campaign managers rely entirely on these numbers as a benchmark for their CTR success. In that case, they will overlook the analysis of other variables that affect their campaigns differently.
When you compare CTR from other similar campaigns, they provide a good benchmark for improving upon.
One of the most difficult KPIs to measure is the Quality Score. Created by Google, this metric aims to point out your ad content’s relevancy with the help of CTR metric and more performance variables such as landing page experience.
However, it is difficult for advertisers to understand this metric because it is not as straightforward to measure as other KPIs such as clicks.
Google can evaluate an ad’s quality score with the help of expected CTR, ad format, ad relevance, and landing page experience.
When it comes to measuring the Quality Score, Google is upfront about its process and importance. In 2017, Google improved on how it reported Quality Score in Google ads, though the following aspects need to be kept in mind:
If you pay less money to Google Ads for campaigns, you will get a good Quality Score ranging between 7 and 10. However, if you pay more for ads, you will get a bad score of 6 or lower.
With a change in the Quality Score reports, advertisers found it easier to use it in Google Ads along with the provision of KPI’s historical data. Such insights are precious for advertisers to come up with better campaign decisions.
Advertisers are always highly interested in how they can improve the Quality Score as a means to determine the cost they pay for every click.
Additionally, Quality Score can influence KPIs like CPA and CPC.
PPC advertisers usually have a set budget that guides them on how to spend on an ad campaign. However, the bid and budget they specify for a PPC campaign are not guaranteed amounts that they will end up paying.
Advertisers place a higher bid than their competitors to get ad positions but pay a bid price second to it. As a result, your competitors in a PPC auction determine the cost of the ad you put up and the clicks it generates.
If you want to know the exact amount an advertiser pays for a campaign, calculate the CPC. Divide a campaign’s total cost by the number of clicks that ad generated.
To manually calculate your campaign’s cost, multiply a campaign’s clicks with the CPC.
In addition, you should think about methods for reducing your cost per click.
For advertising campaigns, you can come up with a cost per acquisition (CPA) which is the cost of acquiring a new customer. You can determine the CPA when you divide the total conversion costs by the total conversions.
Sometimes advertisers also opt for a bidding technique for a campaign to use a targeted CPA. This helps them use a CPA according to their budget with an automatic bid setting to get maximum conversions.
It is essential to have conversion tracking, know various bidding strategies and have a minimum of thirty to fifty conversions within the past 30 days of using a targeted CPA.
We all know impressions matter a lot where ads are concerned, and it doesn’t include them clicking on it. So the number of impressions for a campaign won’t indicate its success because there is no way to tell your ad’s effectiveness on your audience.
However, with the help of impression share, you can determine the number of impressions your campaigns generate. It is calculated when you divide your campaign’s total impressions by the impressions it was eligible to have.
If you want indirect yet competitive insight, impression share is a key metric you should have an eye on. For instance, if your impression share is 50% for some keyword, you can determine that the rest of the 50% is with your competitors.
You can reduce your competitors’ ad display by increasing your impression share. On the other hand, you’ll have to improve your bids to improve their impression share.
Whether search results for a query are paid or organic, Google has a way to balance them both. Google and Bing ads are displayed on top of the results page. The first one is at the highest position, the next one underneath that, and so on.
Advertisers determine the usual position of their ads with its average position. It is important to understand that Google doesn’t always place the highest bidders’ ads in the first place, for which they use the ad rank to figure out the average position.
You can find out the ad rank when you multiply Quality Score with the maximum CPM of an advertiser. However, this is an average, so even after calculations, you can’t tell your ad’s exact position.
It is natural to aim for the first position, but this is just to satisfy numbers because it doesn’t guarantee results.
It is also possible for some advertisers to get more conversions while in the fourth position than the first one. Hence, the average position should only be used as a point of reference but not as a target indicator as it doesn’t necessarily give the information you want.
In addition, it will also benefit to look at how Google Ads extensions perform relative to the normal listings in your campaign.
More often than not, paid marketers have a monthly budget they need to follow for an ad campaign. To what extent they achieve the budget they were given is determined by the budget attainment.
However, many PPC marketers don’t measure their PPC performance based on budget attainment, even if it provides a lot of information regarding their campaign’s management.
It is not easy to bid regularly and optimize results when PPC auction variations require continuous oversight. This is why marketers end up overspending or underspending on their budget frequently.
Nonetheless, PPC marketers should consider budget attainment as a valuable KPI.
A highly significant indicator of a PPC marketers’ skills and account health is the Lifetime Value (LTV). However, it is slightly complex to calculate a paid searches’ CLV.
When companies acquire customers through paid search and retain them for a longer time, they make more revenue.
LTV can be measured in several ways, even though it evaluates a customer’s lifetime with a business’s product. For instance, a large company such as Target will have a complicated LTV due to several aspects to it like customer retention rate, applied discounts, customer lifespan, etc.
PPC marketers generally avoid such calculations, but this KPI’s measurement could be precious for other departments.
There are many KPIs that you can use, and you might be tempted to use all of them. It is essential to understand your campaign and carefully choose metrics that suit it best so you can optimize them and get better results.
Chances are that your goal is to bring more traffic to your website, increase sales and enhance brand awareness through various campaigns. Understand what works for your campaign and what doesn’t, based on the KPIs you track.
One of the great things about online marketing is that you can measure click-through rate. You can quickly review many types of statistics after you run your marketing campaign. Whether you’re doing pay-per-click (PPC), a Google Ads campaign, email marketing, or social media ads, you can review your click through rate daily or even hourly to see your progress.
But what is a good CTR? What should you expect your click through rate to be, after all your SEO work, ad spend, and online ad efforts? Sources say that the industry average click through rate is about 1.9%. However, the average CTR varies by industry. In Google Ads, performance also differs between search campaigns, display campaigns, and shopping ads. And for best results, your team should shoot for a higher quality scores click-through rate.
Below, we discuss click through rate overall, industry averages, plus ways you can up your Google Ads CTR, conversion rate, and achieve better marketing success.
Below are the click-through-rates for some of the biggest online industries (Search Network CTR):
For 16 industries monitored by Google for its ad business, the average CTR is 3.17%. For the Google Display Network, the 16-industry average is .46%, because display traffic has lower intent than users actively searching on Google search.
What makes a good CTR, then? There is no precise number that we can state for every business. But you want it to be as high as possible! A high CTR means more people viewing your product and services, which is always good.
Some marketing experts recommend having a click through rate that is at least as high as your industry average. Aim for a bit higher for best search results page. The higher your CTR, the stronger your ad performance signals within your Google Ads account.
Now you understand more about what a good CTR is for your industry, but how to get there? Keep reading!
In any Google Ads campaign, keyword selection has a massive influence on your Google Ads CTR. If you want to have a massive influence on your click-through rates, focus on keywords and match-type.
Ad copy matters, too, but that doesn’t matter unless the ad appears on a search engine result page (SERP).
If you have advertisements that have many broad match keywords, the odds are high that your copy could appear for irrelevant queries. One of the biggest culprits for broad ad groups is the keyword suggestion tool offered by Google or other search engines.
It can help you see your options, but it’s not recommended to go with their recommended match-types automatically. If you go with their recommendations, make sure to use their key at the bottom so you pick the right match type.
Signals for every match-type are:
Tightly themed ad groups within your Google Ads account help ensure that users on Google search see highly relevant ads. This improves Quality Score, boosts ad rank, and supports a stronger average click through rate.
Using long-tail keywords can also increase the likelihood of a high CTR, especially in competitive search campaigns.
It’s essential to practice vigilance if you can describe your product or service in ways that can net trigger queries in other industries.
Let’s say you’re a patent attorney and you love wearing patent leather shoes. But you’re probably not gunning for people viewing shoes to click on your legal ad, right?
You don’t want the word “patent” to be for any match-type – except exact.
Remember to use negative keywords to avoid queries that could come from other match-types and other keyword meanings and to protect your budget and improve CTR benchmarks.
For instance, cat rehabilitation can be interpreted as cat training or taking kitty to the veterinarian. The prices for each of those search results are much different. Depending on your ad budget, you may not want to use those terms that could trigger unrelated results and money down the drain.
Note that keywords that are in your advertisement groups need to be very likely to produce good queries.
If you have a shot that a long-tail keyword of 3 or more words is better, use it. However, if your specific niche has a lower search volume, you may want to choose a broad concept, as long as you have a long negative list.
Advertisement copy isn’t just a tired formulaic blurb anymore. Now we have three headlines, a couple of descriptions, and a growing list of extensions to entice our prospects to contact us. Your ad format and ad messaging significantly influence CTR.
But it’s easy to fall back into old habits and use copy backed by ‘data,’ and not take full advantage of the tools at our digital fingertips.
When humans craft your ads, you have a higher click through rate when the ad includes an H3 and D2 – about 8%. When there is no H3 and no D2, the click through rate falls to about 5%.
Mobile devices usually only give two headlines but usually do list both descriptions. Also, using the description provides the ad with more beef. The larger ad usually produces a better click through rate.
Also, note that ads that have all descriptions in headlines get a high CTR, studies show. So, please use them.
You’d be surprised to learn how many suitable ads lack a strong CTA or call-to-action. If your advertisement doesn’t have a strong CTA, you’re tossing your money away. Remember to use one of these:
The purpose of paying for paid search ad is to get prospects to act – go to your website. Some experienced hands say CTAs work great in H2. Others like to lead the ad with the CTA. You can test both in your industry and see which produces.
Note that having repetitive language in your ad will ding your Click through rate. For example, using a single word three times or more in an ad generally lowers engagement.
Who is seeing your online advertising, where and on which device are big deals for a high Click through rate. If you’re going after more than one region, remember that people around the country think and search differently.
In search campaigns, targeting high-intent users on Google search typically leads to stronger CTR benchmarks compared to display campaigns on the Display Network. Putting every region in your country makes the PPC account easy to manage, but it could hurt/effect click through rate(CTR).
Google lets you make the target location a choice in an ad campaign, so you could need to limit the first campaign to one or two markets. When you have hard data on which ad works best, you may expand to more markets, change up the ads and keywords per the local search methods.
All it can take is to alter your ad’s copy to ‘request a call back’ after hours. It shows you’re a human thinking about the person reading the ad.
You can achieve a good CTR, but if your landing pages are weak, your conversion rate will suffer.
Google factors landing page experience into Quality Score, alongside expected CTR and ad relevance. Improving your landing pages can:
Alignment between keywords, ad messaging, and landing pages is critical for long-term success in Google Ads.
A good CTR depends on your industry, competition, and campaign type. Use industry CTR benchmarks and the average CTR for your vertical as a baseline — then aim higher.
Remember:
Ultimately, the goal isn’t just a high CTR — it’s profitable growth.
Now you should know more about the ideal/good CTR and how to boost yours. If you need help optimizing your Google Ads campaign, improving CTR for Google Ads, or fixing a suspended Google Ads account, our team is here to help. We can help you with our PPC management services, including help with your suspended Google Ads account. Contact us today!
Advertising on the web is an ever-evolving space filled with the potential for billions of people to see your ads and literally thousands of metrics to determine who to target, when, and where. That’s why it’s important to have the right Flexible bid strategies in place when you go to try and win that all-important ad space on Google.
Pay per click ads have the potential to generate many high-quality and high converting leads to your site or business, but only if you do it right. Trying to pick the right strategy can be a mind-numbing process. Set a budget, pick a few keywords, launch inside Google Ads, and wait for results. Beyond just the headache-inducing number of metrics that are available, there is a whole realm of other considerations to make to figure out how, when, and where to run your PPC ads.
Google itself can do a lot to help you figure out who to target and when. The trouble is, unless you have experience and know exactly what you’re doing, you may find yourself wasting ad dollars on typical “set it and forget it” ad campaigns.
You’ll often find that these campaigns aren’t doing much other than throwing your money away. If you want to make the most of them, you have to stay on top of your PPC campaigns and the strategies you’re using.
That’s where bidding strategies come into play.
The right PPC bidding strategies can help you control spend, improve visibility on search results, and drive conversion value without draining your budget. The wrong approach can lead to wasted ad spend, poor performance data, and frustration.
This first section deals with how ad campaigns should operate and how to tell if yours are in a good position for new flexible bid strategies.
Before we dive into the different strategies and how to implement them, we want to set you up for success. To do that, we’re going to break down what you should be doing to put yourself in a prime position to make use of the different flexible bidding strategies that are available.
The very first thing we recommend doing if you aren’t already is getting in touch with a PPC management company. If you already have one, and they’re not using flexible bid strategies, then you may want to take a look at what you’re paying for and how much you’re paying. Oftentimes, agency fees and returns may not align with your goals or the level of service may not meet up to the needs of your particular ad campaigns. You may want to consider firing your PPC agency if you notice that they’re wasting ad dollars, you’re not seeing growth or other signs that you’re throwing money away.
Once you have that settled and you’ve gotten with an agency that knows what they’re doing, the first thing you really want them to do is to perform a PPC audit. The purpose of having an agency do a PPC audit is to get a sense of where your ad campaigns are at and what is potentially going wrong. Google Ads gives you loads of valuable data, but that doesn’t necessarily tell you what to do with it.
By getting an audit done, you can find out where your ad dollars are going, how much of a return on investment (ROI) you’re getting, and what the problems are. Not only that, but you’ll actually get actionable steps you can take to make improvements on your ad campaigns to see them grow your return on ad spend (ROAS).
They say “if it ain’t broke, don’t fix it” but if it is broke, you might want to actually know how to fix it or take it to someone who can. That’s why getting with a PPC management company and getting an audit done should be your first step.
Many advertisers jump straight into automated bidding without checking whether their foundation is solid.
Start by reviewing:
If these basics are off, even the best automated bidding strategy won’t deliver results.
Also, avoid running too many multiple campaigns targeting the same audience. That can confuse Google's algorithm and hurt performance.
Next, we’ll discuss how to analyze your marketing objectives to make sure they line up with your business goals.
Part of choosing the right bidding strategy and knowing what’s wrong and how to fix it means understanding your goals and what you’re really trying to do with your ad campaigns. It may be that depending on the type of campaign you’re running, you may find that while you think a search campaign is best, you want a local PPC campaign, because you’re trying to drive traffic to a brick-and-mortar store. Want visibility? Focus on smart bidding options like target impression share. Want leads? Consider target CPA or maximize conversions. Want revenue? Use target ROAS or maximize conversion value. If your focus is traffic, your approach will differ from someone aiming for high conversion value. Your PPC strategy should align with your business objectives, not just platform recommendations.
Through Google’s advanced resources for ad campaigns, you can help to identify your goals and the type of campaigns you should be running. Then, with the help of your ad agency, you can pick the best practices for the types of goals that you have and your advertising budget.
Google’s metrics can help you figure out what campaign to run and a PPC agency can help you execute the process, including managing your bids, increasing your bids, making changes to existing campaigns starting new campaigns, and monitoring performance.
If you find that the objectives you had set aren’t right for your business, then it may be time to pull out of any existing campaigns, reevaluate, and then relaunch. Your bidding strategy depends on what success looks like for you.
One flaw that some agencies and businesses often make is to continue to run with an existing campaign that isn’t working. Part of analyzing your marketing objectives is determining if a campaign that’s failing can be salvaged or not. There’s no point in going down with the ship if you can make it back to shore and try again later with a better boat.
Now that we’ve covered how to align your goals with your marketing strategy, it’s time to talk about how you measure success via key metrics.
Sometimes the problem isn’t even the ad campaign itself; it’s the performance data you’re using to drive the ad campaign. Realistically, if you’re using an ad agency, they should be helping you do this. If you don’t really know what you want out of your ad campaigns, it can be tricky to manage.
If for instance, you’re in the eCommerce space, but when running ads, you’re not looking at the time of day when consumers are more likely to shop and complete a purchase (we’re not talking about those 2 AM window shoppers who click ad to cart and never buy anything) then you’re likely running ads at the wrong time and not targeting the proper audience.
Additionally, the type of ad and the platform you run them on can make a major difference, too. Demographics change based on the platform the ads are seen on and the likelihood of conversion is tied to that as well.
For example, managing Facebook ads is entirely different from managing your Google search ads. Your audience changes based on the types of ads you run and not knowing who is doing what will lead to wasted ad dollars. From your Google Ads account, you can see all the data you could ever need to figure out who’s logging on, where they’re seeing your ads, when they’re most likely to click them, and when they actually follow through and convert.
If your ad timing or methods aren’t meshing with the majority of your traffic, then it’s a safe bet that you’re wasting your money and your PPC bidding will never be cost effective.
It’s also important to note that these metrics aren’t static values that you can keep running with forever once you know them. Marketing is ever-moving, ever-changing and you have to put in the work to keep up. That’s why we recommend having a marketing agency do the work, but making sure that it’s one that has your goals in mind and is willing to stay on top of the key metrics, historical conversion data, and the space you’re in to keep your ads performing their best. Also, remember that bidding algorithms rely heavily on machine learning, so feeding them clean data is critical.
That’s why we’ve written this guide to flexible bid strategy in the first place. There are some experts and businesses that still believe that once you’ve locked in a bid strategy that works, you’re good to go. That’s not how ad campaigns or marketing in general operate. What works today may stop working tomorrow. Flexible bid strategy are designed to be just that, flexible.
The next section covers what automated or manual bidding actually is and how it works. We know some readers have a good grasp of the concept, but for those that don’t, this is key information before implementing a flexible bid strategy aims.
Just because flexible bid strategies have the word flexible in their name doesn’t mean that you can just set them and change them any way you choose at any time. Many advertisers worry they’ll lose control with automated bidding. That’s not really the case. Instead, automated bidding strategies use machine learning and historical data to adjust bids in real time during the ad auction. The better you understand automated bidding, the better you can make use of the powerful tool that it is.
All automated bidding strategies work off of parameters that you set. This means that if it doesn’t work, it’s likely tied back to something you told the program to do. With enough input and the right configurations, automated or different flexible bidding strategies can work like magic for your ad campaign, routinely scoring you the optimal converting ad space you need to drive loads of high converting traffic to your site. That’s why PPC automation works best when guided by strong campaign goals, clean conversion tracking, and ongoing monitoring.
That’s why we said that it’s not about a “set it and forget it mentality.” You have to constantly monitor your flexible bid strategies and adjust them to meet your needs as they change. As your business grows, your audience grows and changes with it. To think of it logically, think about ads that are run for products, consider what happens if new products are added to an existing line, the target audience may change and grow with the product line. That means your existing ad campaigns need to adjust too.
Flexible bid strategies allow you to move and adjust parameters on the fly. The different strategies also allow you to account for different metrics and adjust your return expectations if your audience and traffic volume change. If you have more traffic but few conversions, you can adjust your ad strategy to maximize conversions for the increased traffic flow.
The upcoming section deals with flexible bid strategies in practice and how to properly implement them based on your needs. We included some key pointers that apply to each strategy and how best to use them.
All your bidding strategies can be managed through your Google Ads account dashboard. From the dashboard, you can see all of the different ad strategies that you have available and can create and modify them as you see fit.
Among your choices, there are 6 different bidding strategies that allow Google Ads to automate your bidding process while giving you the control you need to adjust your bids if something isn’t working or your market changes.
This is one of the standard PPC bidding strategies and is used when you want your bids to drive traffic over all else. It’s useful for new campaigns or when testing keyword research, but it can quickly lead to wasted ad spend. You can control spending by setting a maximum bid amount and a maximum daily ad spend amount. This does not factor in conversion rates or other factors. It will target based on your set keywords, and the bidding will moderate within your set/target spend amount so that you don’t go over your daily budget.
This strategy is best implemented when your main goal is just to get more people to see your site over all else. As we said, this focuses on clicks and not conversions, but sometimes click volume can relate to conversion and brand recognition. The ability to set and monitor spending lets you have more control over ad spend if you’re on a tight budget, or if you’re experimenting with a new ad campaign and want to see what type of results you can get without breaking the bank.
You can, of course, implement this strategy without setting daily spending limits/target spend amount, but this can burn through your ad spend budget. Our best implementation advice is to use this strategy when you need maximum site traffic without blowing your ad budget.
Target ROAS bidding strategies are great for when you want to win auctions that offer a certain conversion value for the ad dollars you spend. In the case of this strategy, you can set a percentage value for what type of return you want on every ad dollar that is spent, and Google will automatically adjust bid amounts and auction preferences based on available data.
There are a few caveats to this strategy. Target ROAS strategies are built to get you the most return they can; this means that they will only target auctions based on the available data and are likely to generate the set return based on the available data. This also means that in most cases, they will spend whatever is calculated to be necessary to win auctions. This can be a problem if you don’t set the values for your maximum daily ad spend and the maximum cost per click.
Even with high returns, you can find yourself spending more per click than you end up actually converting. For example, say you pay $15 to get 3 new customers, sounds great right? But then those customers come into your store and only spend $3 each. You’ve effectively spent more for customers than you gain by acquiring them. ROAS strategies aren’t perfect, so you’re working partly on data and partly on guesswork.
The second issue is that if your ROAS is set too high, you may find that the bidding is too selective and you don’t wind up winning very many auctions as a result, meaning fewer ads overall.
If you have great metrics and lots of data built up to facilitate a solid understanding of the types of auctions to bid on, then a targeted ROAS strategy is the perfect option to ensure that your ad dollars aren’t wasted. Just make sure you set a spending maximum bid limit so you don’t outpace your budget. This works well when you have strong historical conversion data and clear revenue tracking.
This is another targeted strategy that bids based on a set value. In this case, it’s the cost per customer or cost per acquisition. Target CPA is ideal for lead generation. It aims to bring in conversions at a specific cost. This is not to be confused with a cost-per-action model that calculates costs based on clicks or other actions. A cost per acquisition targeting strategy bids on ads based on an average set by the campaign owner.
Google will adjust bids higher or lower, within a range of the target Cost Per acquisition in order to win auctions. Target cost per acquisition, You must have at least 15 conversions in the past 30 days and an average conversion rate over the last 7 days in order to implement this strategy. Beyond the base requirements, like other targeting strategies, the more historical data you have about past conversions and customer data you can feed into it, the better it will perform.
This strategy is ideally implemented when you’re interested in achieving valuable conversions while controlling the cost. This type of targeting strategy has more control than a ROAS strategy as the bidding can fluctuate within a set range without spending too high or bidding on too few auctions.
This strategy is an evolved form of the standard cost per click model. This blends manual bidding with automated strategy elements. It takes the standard cost per click structure and automatically adjusts the bidding up or down within a set range to win auctions that maximize conversions.
A standard CPC campaign bids on auctions at or under a certain cost per click without regard for other factors. This is done to control spending. Enhanced CPC gives the same measure of control over PPC bidding while accounting for conversion rates. This means that you can control cost per click spending while still getting the benefits of higher conversion rates.
If you’re trying to control spending and need to reign in CPC, but still want ads that convert, this is a valuable strategy.
This strategy is used when you want your ads to rank higher than competitors on Google search results pages. The automated bidding algorithm will adjust or increase your bid to beat out a competitor to either appear higher up on the SERP or to appear more frequently than a competitor.
The strategy is based on estimates and attempts to win auctions over competitors so that when ads are displayed yours show up first or more frequently. The issue with this strategy is that it does not actually raise your ad rank, the spending is not as easy to monitor, and there are no guarantees that you will always outrank your competitors as the results are estimates based on available data.
This is a useful strategy when you have a competitive market and are trying to gain some market share over others. Be mindful of your spending and you can make some ground in the market by manipulating ad placement to your advantage. It’s useful in competitive markets but requires careful budget allocation to avoid overspending.
The goal of the target search Page Location strategy is to get your ad either on the top of the page or somewhere on page one of search results. Marketers know how valuable SERP placement is, especially on page one.
A target search Page Location strategy cannot guarantee that you will end up on the top of a page or that you will land on page one of the SERP. Each individual auction is different and based on the number of competitors and your quality score, your placement will change with these factors and the result of the auction.
While the Target search Page Location strategy isn’t bulletproof, Target search Page Location are the best option when you’re trying to maximize visibility over all else. It can help you appear on page one or on the top of pages and at the very least ensures that people will see your ads some of the time.
To make your PPC bidding strategies work:
Also, remember that manual bidding still has value in certain situations, especially when testing or controlling costs early on.
Even experienced advertisers run into issues with bidding strategies.
Watch out for:
These mistakes can hurt performance across both Google Ads and platforms like Microsoft advertising or Microsoft ads.
So, there we are, the 6 flexible bid strategies and how best to use them to improve your business and PPC campaigns. Hopefully, we’ve given you the advice and strategies you need to use each of these strategies to the best of their potential. Whether you’re trying to control spending, improve exposure, use smart bidding, test manual bidding, analyze your performance data, beat your competitors, or maximize conversions, one of these flexible bid strategies will work for you.
As long as you remember to set your parameters and monitor your bids, these options offer more control and more choice than typical bid strategies and will improve your odds of success. Remember, PPC isn’t something you can set on autopilot. The best results come from combining human insight with machine learning, not choosing one over the other. Do your research, keep tabs, and get help from a PPC agency to maximize your marketing effectiveness. If you stay flexible, monitor your results, and align your bidding strategies with real business goals, you’ll build cost effective campaigns that actually deliver.
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