Are Amazon Text Ads a Promising Alternative to Product Ads?

Amazon recently revealed the discontinuation of Product Ads. In wake of this news, the e-commerce platform is encouraging sellers to test out their Text Ads beta program as an alternative to Product Ads.

Product Ads from Amazon were initially available to sellers who could not implement a successful shopping strategy on the site due to budget constraints or lack of knowledge around the program. Sellers who experienced success with Product Ads were able to profitably market their inventory, leveraging Amazon’s large customer base, while still sending traffic to their website to complete purchases.

As of October 31, this will no longer be a viable source of revenue for those sellers. This is a final push from the marketplace to keep products within their landscape – encouraging sellers to market and customers to purchase all within the Amazon platform.

Why the Amazon Text Ads’ Beta Program Benefits Sellers

Currently in beta, Amazon Text Ads are an alternative option for sellers who would like to continue to send traffic from Amazon to their website.

Most sellers want to know if Amazon Text Ads are really a promising alternative to Product Ads. The good news is that because Amazon Text Ads are still in beta, only sellers that previously advertised through Product Ads are permitted into the program as of today. The automatic entry of these sellers into the Text Ads beta program means they can begin advertising now.

Right now the competition is moderately low, but it will be a very different situation once the program is out of beta. Sellers within the beta are competing on keywords, and at this point most CPCs are very low. This means if a seller is bidding on a keyword that no other seller is bidding on, they will most likely only pay the minimum bid and win the top placement.

Text Ads still have similar placement to Product Ads – at the bottom of the search page – but lack any image or product titles. Although there are six spots visible, Amazon Text Ads beta program is only available to the seller in the top listing. The other five listings are managed by third parties. Unfortunately because of their placement and lack of visual appeal, Amazon Text Ad CTRs are still very low. If sellers can convert, the ROI is likely to be high because the CPCs are so low.

If sellers can leverage Text Ads now, there is a promising opportunity to rack in some revenue, but as we near Q4 the program is likely to open up to all sellers. This means the reality of cheap CPCs is likely to diminish.

Within three weeks, sellers have already experienced a steady rise in CPCs from one penny to just under 10 cents.

It’s still too soon to say exactly how Text Ads will play out, but for those already accepted into the beta program, this is definitely an area worth testing now rather than later.

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