“Want to understand the cost benchmarks and market rates for advertising on Amazon Japan?”
“Looking to manage your ads effectively while keeping costs low?”
Do these thoughts resonate with you?
Hello! We are NEGOCIOZ.NET, a specialized consulting company for Amazon Japan.
Many are hesitant to start Amazon advertising because they’re unsure about the general cost expectations. Indeed, if managed poorly, Amazon ads can end up merely being a cost burden without yielding the desired results.
In this article, we’ll delve into the advertising market rates and benchmarks on Amazon Japan, as well as methods for effective management. Don’t miss out!
Furthermore, at NEGOCIOZ.NET, we have a track record of boosting a particular client’s ROAS (Return On Advertising Spend) by 1930% in 5 months, and increasing ad-driven sales from about 6,000 yen to around 350,000 yen.
We’ll share insights based on our experience, and we hope you find it valuable.
Table of Contents
What is Amazon Advertising? What types are available?
Let’s first take a look at the different types of Amazon advertisements!
The following are the types of ads you can utilize on Amazon:
| Type of Ad | Features |
|---|---|
| Sponsored Products | • Ads displayed on search results and product detail pages • Targets users with high purchase intent who actively search |
| Sponsored Brands | • Search-triggered ads • Can display a "logo" and up to "three advertised products" • Appears at the very top of the screen • Can distribute video ads |
| Sponsored Display | • Self-serve display ads (set up by the seller themselves) • Pay-per-impression or pay-per-click billing • Allows setting a "daily budget" and "bid amount" |
Amazon Japan Advertising Cost Benchmarks and Market Rates
We’ll provide insights into the benchmark and market rates for Amazon Japan advertising fees.
For e-commerce and online retail sites, an advertising cost benchmark is said to be about 15-20% of the target sales.
| Type of Ad | Benchmark & Market Rate |
|---|---|
| Sponsored Products | • 5-10 yen per click • About 200,000 yen per month (assuming 1 million yen in sales) |
| Sponsored Brands | • 5-10 yen per click • About 200,000 yen per month (assuming 1 million yen in sales) |
| Sponsored Display | • 5-10 yen per click • About 200,000 yen per month (assuming 1 million yen in sales) |
For Amazon Japan advertising, the market rate for all three types of ads is typically 5-10 yen per click.
The monthly advertising cost benchmark, when assuming monthly sales of 1 million yen, is about 200,000 yen. This might seem a bit pricey at first glance. However, because Amazon Japan ads are only distributed within the Amazon marketplace, they are often more cost-effective than listing ads on Google, Yahoo!, or other web ads.
In recent years, the cost-effectiveness of Amazon Japan ads has been recognized. While the advertising market share of Google (Alphabet) and Meta is decreasing, Amazon’s share has been expanding. (Reference: Business + IT)
Of course, factors like the product or brand recognition can change these benchmarks. However, the barrier to entry for advertising on Amazon Japan can be considered relatively low.
Please note that the above table is just a guideline. It’s essential to initially see how much ad spend it takes to acquire a single order and make adjustments accordingly.
Managing Your Amazon Japan Advertising Budget
There are two main methods to manage your Amazon advertising budget:
- Daily Budget Management
- Portfolio Management
Let’s delve into how each of these management methods works.
Daily Budget
Managing by a daily budget means setting an upper limit for ad spend for each day.
This “daily budget” is a mandatory field when launching an advertisement.
However, it’s crucial to note that the set budget might not be consumed precisely. Depending on the ad’s click rate, the actual spend can be less or more than the set amount.
Nevertheless, by the end of the month, the average consumption ensures that the total spend does not exceed the “set daily budget × number of days in the month”.
Portfolio
On the other hand, the “portfolio” is an optional feature designed to simplify budget management, not a mandatory field like the daily budget.
By setting up a portfolio, you can control your ad spend so that it doesn’t exceed the set limit over a specified period. While daily budgets can fluctuate in daily consumption, using a portfolio ensures that your ad spend over a specific time doesn’t exceed the predetermined amount.
However, be cautious: once you reach the budget limit set in the portfolio, all campaigns linked to that portfolio will automatically pause, requiring attention to prevent unintended ad suspension.
Choosing Amazon Japan Ads
When operating Amazon ads, it’s essential to select the ad type that aligns with your products and objectives.
Here’s a guide to choosing the right Amazon ad for your needs:
Select Ads Based on Your Objectives
Depending on your goal, you’ll want to pick the ad type that will serve that purpose most effectively.
| Ad Type | Recommended Use |
|---|---|
| Sponsored Products Ads | - Ideal for beginners in ad operations - Promote product purchases - Reach users with a high likelihood of purchasing |
| Sponsored Brands Ads | - Increase brand awareness - Promote product purchases - Suitable if you have multiple products to advertise - Reach users with a high likelihood of purchasing |
| Sponsored Display Ads | - Enhance product recognition - Promote product purchases - Target specific demographics in detail - Suitable for products with brand registration |
If you’re a beginner looking to encourage product purchases, the “Sponsored Products Ads” or “Sponsored Brands Ads” would be ideal.
Both these ads allow you to showcase your products to users who search with highly relevant keywords, ensuring that you’re reaching potential customers.
Start With Sponsored Products Ads if You're a Newbie
For those new to Amazon Japan ads, it’s recommended to start with Sponsored Products Ads.
The “Auto-targeting feature” of Sponsored Products Ads is especially user-friendly for beginners. Amazon Japan will automatically set relevant keywords for your product, allowing even those new to ad operations to get started easily.
As a strategy, begin by utilizing the auto-targeting feature to analyze which keywords yield a higher click rate for your product. After identifying these high-performing keywords, you can then focus on advertising specifically with them for more efficient results.
Remember, Amazon advertising can seem daunting at first, but with careful planning and a clear understanding of your objectives, you can harness its power effectively for your products. Always keep track of your ad performance to refine your strategy continuously.
Tips for Effectively Utilizing Amazon Japan Ads
When operating Amazon Japan Ads, it’s recommended to set one of the following two objectives:
- ROAS (Return On Ad Spend)
- Sales Revenue
Each objective corresponds to different key metrics. Here’s a breakdown of each:
Using ROAS (Return On Ad Spend) as an Objective:
ROAS represents the return on your advertising spend. Essentially, it measures how much you earn relative to how much you spend on ads.
Increasing ROAS can boost profits.
This ROAS metric can be calculated as: CVR (Conversion Rate) × Average Sale Price / CPC (Cost Per Click)
Thus, to improve ROAS, you either need to:
- Lower the CPC (Cost Per Click)
- Increase the CVR (Conversion Rate)
So, what strategies can you employ to enhance both CPC and CVR?
Lowering CPC (Cost Per Click)
One method to reduce CPC is by decreasing your bid amount.
This strategy to decrease CPC becomes effective in the following situations:
- Both “Sales Revenue” and “ROAS” are low.
- “Sales Revenue” is high, but “ROAS” is low.
So, how can you reduce your bid amount?
One way is to switch the type of ad you’re using.
In descending order of CPC, the ad types are:
- Sponsored Brand Ads (Keyword Targeting)
- Sponsored Brand Ads (Product Targeting)
- Sponsored Products Ads (Keyword Targeting)
- Sponsored Products Ads (Product Targeting)
- Sponsored Display Ads (Product Targeting)
Note:
- Keyword Targeting: Ad delivery specified by keywords.
- Product Targeting: Ad delivery specified by product names.
When looking to decrease CPC, consider switching to an ad type with a lower CPC based on the above order.
Increasing CVR (Conversion Rate)
Conversion rate refers to the percentage of product page visitors who actually make a purchase.
To boost CVR, consider the following two strategies:
- Reassess targeting
- Revise and improve product pages
If you find that a lot of visitors are landing on your product page but few are making purchases, or even if the number of visitors to your product page is low to begin with, then it’s time to review your targeting.
Moreover, if you’re getting ample traffic but fewer conversions, contemplate rewriting or enhancing your product page.
When revising, ensure your product’s appeal is fully conveyed. If you judge the current content doesn’t showcase the product’s allure adequately, enrich the product specifications, product descriptions, and A+ content.
Boosting Sales as the Primary Objective
Next, let’s discuss strategies when aiming to boost sales.
Sales can be calculated using the following formula:
Impressions × CTR (Click-Through Rate) × CVR × Product Price
To enhance sales, it is recommended to either 1) Increase impressions or 2) Improve CVR.
Increasing Impressions
Impressions measure how often your ad is displayed to users.
Even if the ad isn’t clicked, the mere appearance on a user’s screen counts as one impression.
To boost impressions, you can:
- Raise your bid
- Add more targeting
Essentially, you want to maximize exposure to potential customers.
On Amazon, ad placements are determined through auctions, and higher bids generally result in more impressions. However, raising your bid can also increase costs. It’s wise to increase bids on ads expected to generate significant sales.
By expanding your targeting, you can reach a wider audience. However, if the conversion rate remains low, this won’t necessarily translate to higher sales. It’s crucial to analyze actual data and identify high-potential targets, regularly revisiting and adjusting your strategies (PDCA cycle).
Improving CVR
The strategies to enhance CVR were detailed in the ROAS section:
- Review targeting
- Revise and enhance product pages
Implement these measures to drive improvements.
Optimize Your Ad Spend & Boost Sales with Account Management!
Success with Amazon Japan advertising requires specialized knowledge and experience.
For beginners, diving into ad operations might lead to spending costs without fruitful results.
If:
- You’re unfamiliar with Amazon Japan’s advertising.
- You want to minimize unnecessary costs.
Considering agencies that provide account management services can be effective.
Benefits of Using Account Management Services:
By delegating to professionals with ad expertise, you can:
- Increase sales without wasting money.
- Learn from proven ad strategies.
- Gain insights beyond advertising, like customer acquisition and sales.
- Hand off tasks from listing products to customer support.
Regular reports are provided when using account management. Through these reports:
- Understand your ad performance and strategies.
- Accumulate knowledge about Amazon Seller advertising within your company.
Furthermore, depending on the plan you choose, account management can handle most sales-related tasks on Amazon Japan. This saves time and effort, letting you utilize your free time efficiently.
However, a pressing concern might be: does it really lead to success?
We invite you to review a case study from one of our clients for reference.
What results can you expect from "Account Management"?
or one of our clients who sells audio equipment, their monthly sales from advertising went from approximately ¥7,000 at the start of our contract to about ¥350,000 within a year.
Even with a limited promotional budget, this client managed to strategically operate their advertising by following the PDCA (Plan-Do-Check-Act) cycle. As a result, they were able to achieve a ROAS (Return On Advertising Spend) of 1930% and reduce their ACos (Advertising Cost of Sale) to 5.18%.
*Note: ACos is a metric that represents the ratio of advertising costs to sales. A lower number indicates a higher return on investment.
Furthermore, by implementing SEO strategies, image production, and review initiatives, they also successfully increased sales outside of advertising.
Even within a short period of a year, with strategic ad operations using the PDCA cycle, it’s entirely possible to achieve a significant increase in sales.
What is NEGOCIOZ's Account Management Service?
At NEGOCIOZ, we offer the following range of services for account management:
Beyond advertising operations, we handle almost every task related to Amazon selling, ranging from product listing to customer support.
Given the vast number of sellers on Amazon and the stiff competition, solely relying on advertising won’t lead to significant sales growth or profit.
It’s crucial to integrate various promotional strategies to produce a synergistic effect.
For instance, on Amazon’s platform, recent sales are believed to influence SEO. Thus, if you can achieve a certain increase in sales in a short period using advertising operations, it can positively affect SEO. This means there’s potential to attract purchases directly from search results.
Consequently, our approach is not limited to advertising operations. Depending on the need, we rejuvenate product catalog pages, leverage social media, and optimize for SEO. We implement strategies tailored to our clients and offer solutions that lead to sales in the shortest time possible.
“If you’re aiming to increase sales without wasting money!” “If you want the quickest path to a sales boost!”
If any of this piques your interest, please contact NEGOCIOZ!
You can inquire for free using the button below. If you have any questions or concerns about advertising operations or details and fees of our account management services, don’t hesitate to reach out for a consultation.
Summary
How did you find this article?
In this article, we provided an overview of the average costs associated with advertising operations and also shared some tips on how to manage your ads effectively. We covered:
- Types of advertisements
- How to choose advertisements
- Budget management methods
- Tips for advertising operations
We hope you’ve mastered these topics through our article and that the information proves valuable in boosting your company’s sales.
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