How many cross-border e-commerce sellers wake up in the middle of the night, haunted by the ever-increasing Cost Per Click (CPC) and Advertising Cost of Sales (ACOS) on Amazon? Over the past year, Amazon's in-platform advertising has become increasingly challenging, particularly for sellers based in Shenzhen, who now face this growing dilemma head-on.
Data from Marketplace Pulse reveals that Amazon's average CPC surged from $0.85 in 2020 to $1.13 in 2021, while ACOS climbed from 22% to 30.5%. Many sellers find themselves trapped in a common predicament: they achieve click-throughs but struggle with conversion rates, or they secure conversions but see little to no profit.
Despite these challenges, Amazon remains the most valuable customer acquisition channel that sellers are reluctant to abandon. The reason is simple: even as advertising costs rise, Amazon's conversion rates and Return on Investment (ROI) continue to far outperform other marketing channels, including major search engines and social media platforms. Data from Shenzhen-based top seller SAVEWO powerfully illustrates this point.
The Amazon Advantage: Higher ROI Despite Rising Costs
SAVEWO's prospectus shows that its advertising returns on Amazon significantly exceed those on other platforms. Specifically, for every 1 yuan spent on Amazon ads, SAVEWO generates 6.22 yuan in revenue. In contrast, returns from other platforms pale in comparison.
To better understand advertising performance across different channels, let's examine SAVEWO's advertising data:
- Social Media Platform X: In the first half of 2021, SAVEWO invested 22.23 million yuan in ads but generated only 26.71 million yuan in sales. This means customer acquisition costs accounted for 83.23% of total sales, with each order costing 296.82 yuan to acquire. Essentially, nearly all sales revenue was consumed by advertising costs, leaving minimal profit after accounting for product and logistics expenses.
- Search Engine Y: During the same period, SAVEWO spent 7.73 million yuan on ads, resulting in 38.2 million yuan in sales. While this performance was better than on social media, it still fell short of Amazon's results.
Why Amazon Delivers Superior Performance
The fundamental difference lies in each platform's nature. Social media and search engines are primarily content platforms where users seek information or entertainment. Amazon, however, is an e-commerce platform where visitors arrive with clear purchasing intent. In other words, traffic on content platforms represents an audience with weaker shopping motivation, leading to lower ad conversion rates. Amazon's traffic consists of potential customers ready to spend, resulting in significantly higher conversion rates.
This inherent distinction makes Amazon ads more cost-effective than conventional channels. From this perspective, Amazon advertising has become an essential strategy for sellers—a golden lever for driving sales and building brand value.
Four Key Advertising Trends and Strategic Responses
As this golden lever grows heavier and harder to wield—due both to post-review-era competition for "organic traffic" and broader industry trends—sellers must adapt to four major shifts in the advertising landscape.
1. Inflation Squeeze: Making Customers Willing to Spend
With 80% of consumers planning to reduce discretionary spending due to inflation (per NPD Group), sellers must maximize Return on Ad Spend (ROAS). Key strategies include:
- Precise audience targeting through detailed user profiling
- Optimized keyword selection based on search volume and conversion potential
- Enhanced ad creatives showcasing product differentiators
- Continuous A/B testing of all ad elements
- Data-driven optimization using performance metrics
2. Attention Fragmentation: Creating Engaging Ads
In our multi-device world, effective ads must combine relevance and entertainment value. Research shows:
- 73% of consumers prefer relevant ads
- Video content appears in 88% of high-performing creatives
- Video ads double brand awareness impact versus static ads
Strategies include audience insight-driven storytelling, video utilization, interactive elements, and personalized content.
3. Channel Diversification: Measuring Cross-Platform Impact
While media fragmentation complicates advertising, improved addressability enables better tracking. Sellers should:
- Integrate data across platforms
- Implement scientific attribution models
- Analyze comprehensive user behavior
- Conduct systematic A/B testing
- Monitor performance in real-time
4. Brand Building in the Attention Economy
To maintain brand visibility amid fragmented attention, sellers need omnichannel exposure through:
- Multi-platform ad distribution
- Precision audience targeting
- Continuous brand messaging
- Quality content marketing
- Interactive engagement initiatives
As Amazon advertising grows more competitive, sellers who master these trends—through precision targeting, compelling creatives, cross-channel analytics, and persistent brand presence—will best position themselves for success in this evolving landscape.