Overview

Amazon’s pay‑per‑click (PPC) ecosystem has entered a new cost‑intensive phase, with average click prices in hot categories now regularly topping $1.00 and edging toward $2.00. At the same time, AI‑driven bidding tools have become standard, and video placements are delivering markedly higher engagement, forcing sellers to rethink budgets, bid strategies, and creative assets.

Key Points

• CPC surge — In competitive segments such as supplements, electronics accessories, and beauty, the average cost per click has risen from under $0.60 two years ago to between $1.00 and $2.00 today, eroding profit margins for many advertisers.
• AI bidding mainstreamed — Automated bidding engines that adjust bids in real time, apply day‑parting rules, and surface long‑tail keyword opportunities are now used by the majority of top‑performing sellers on the platform.
• Video outperforms static — Sponsored video ads placed in search results and on product detail pages generate click‑through rates up to 35 % higher and conversion rates 20 % higher than comparable image‑only ads.
• Expanded audience targeting — New behavioral and demographic signals allow advertisers to layer purchase‑pattern data onto campaigns, enabling hyper‑focused ad delivery both on Amazon and on external Amazon‑owned sites.
• Amazon Marketing Cloud (AMC) maturity — AMC now offers cross‑touchpoint analytics that map the influence of Sponsored Products, Sponsored Brands, and display ads on a single shopper’s journey, providing a clearer picture of true advertising ROI.
• Creative production cost rise — While video ads demand higher upfront production budgets—often $500 to $2,000 per 15‑second spot—the lift in sales velocity frequently offsets the expense within a single quarter for well‑optimized listings.

What's Changing

1. Rising click costs — A seller of premium hair‑care products observed their average CPC climb from $0.78 in Q4 2021 to $1.62 in Q2 2024, prompting a 12 % reduction in daily spend to keep ACoS within target limits.
2. — Using Amazon’s native “Dynamic Bidding – Up and Down,” a kitchen‑gadgets brand automatically increased bids by 15 % during evening hours when conversion probability peaked, resulting in a 9 % lift in sales without raising overall ad spend.