Amazon PPC Strategy: A Complete Guide for Beginners

A good beginner Amazon PPC strategy is to start with one Sponsored Products campaign using automatic targeting, let it run for about two weeks, then move the search terms that sell into manual campaigns with your own keywords and bids, while adding negative keywords for the terms that waste money. You pay only when a shopper clicks, there are no monthly fees, and the number that tells you whether it works is ACOS, your ad spend divided by the sales it brought in. This guide walks through the ad types, targeting, bidding and the numbers to watch, using Amazon Ads’ own guides as the source for every rule.

How Amazon PPC works

Amazon PPC is the cost-per-click advertising Amazon sells inside its own store, where you bid on keywords or products and Amazon shows your ad in search results and on product pages when a shopper’s search matches. According to Amazon’s Sponsored Products guide, there are no monthly or upfront fees, you pay only when someone clicks, your final cost per click never goes above your adjusted bid, ads only run while the product is in stock, and a daily budget of $10 is the suggested starting point. Professional sellers, vendors, book vendors, authors and agencies can all advertise.

The types of Amazon ads

Beginners should start with Sponsored Products, because it advertises one listing at a time and sends shoppers straight to the product page, which is where the sale happens.

Sponsored Brands details come from Amazon’s Sponsored Brands page. Amazon has also folded Sponsored Display into display ads, so older guides that list it as a separate product are out of date, and existing Sponsored Display campaigns now sit under Display, Video and Audio campaigns. Because Sponsored Brands needs a registered brand, it pays to settle your name, logo and story early, which our guide to branding for entrepreneurs covers.

Automatic and manual targeting

Every Sponsored Products campaign uses either automatic targeting, where Amazon picks the searches and products, or manual targeting, where you do. Amazon’s targeting guide describes the options.

Amazon notes that exact match tends to have the highest conversion rates, which is why it recommends bidding highest on exact, lower on phrase and lowest on broad.

A beginner campaign plan, step by step

This is the order we follow for a new product, and every timing below comes from Amazon’s own guides.

1. Start one automatic campaign and let it run for about two weeks, so you can see how shoppers actually find the product.
2. Open the search term report and move the searches that brought sales into a manual campaign, starting with 25 to 50 relevant keywords per ad group, as Amazon’s keyword targeting guide suggests.
3. Run each match type for at least one to two weeks before pausing keywords, so you judge them on real data.
4. Add negative keywords for searches that get clicks without sales, reviewing them after at least 20 clicks, and use phrase or exact match for negatives.
5. Group products by category and price range, so their results are comparable and one cheap product does not hide the cost of an expensive one.
6. In the first week, check the numbers at least twice and raise the budget on campaigns that run out early.

For bidding, Amazon offers three strategies, described in its bidding strategies help page. Dynamic bids down only reduces your bid for clicks that are less likely to turn into a sale, dynamic bids up and down can raise or lower it by up to 100 percent based on performance, so a $1.00 bid can reach $2.00 according to Amazon’s dynamic bidding guide, and fixed bids use your exact bid every time. You can also add placement adjustments of up to 900 percent, for example to bid more for the top of search results. Amazon recommends up and down for the most sales and down only when the goal is return on ad spend, and down only is the safer start for a beginner, because it never pays more per click than the bid you typed in. Letting Amazon adjust bids is one example of the automation now built into most ad platforms, which we cover more broadly in our guide to how AI is used in marketing.

ACOS, ROAS and the numbers to watch

ACOS, or advertising cost of sales, is ad spend divided by ad revenue, times 100, and ROAS is the same data flipped, ad revenue divided by ad spend. Amazon’s ACOS guide gives the example of $50 in ad spend bringing $100 in sales, which is a 50 percent ACOS and a ROAS of 2.

There is no universal good ACOS, and the useful benchmark is your own profit margin, since an ACOS below your margin means the ads make money on each sale. If a product sells for $40 and leaves $12 after product cost, fees and shipping, the margin is 30 percent, so an ACOS under 30 percent is profitable on the first sale. Amazon also points out that new campaigns tend to show a high ACOS simply because they are new, so judge them after a few weeks, alongside click-through rate, conversion rate and total sales, not only the sales Amazon attributes to ads.

Get the listing ready before you spend

Ads send shoppers to your product page, so a weak page wastes every click. Amazon’s Sponsored Products guide recommends winning the featured offer, pricing competitively, keeping stock available, using a title of about 60 characters, showing at least four zoomable images of at least 1,000 pixels, writing at least three bullet points, and advertising products with five or more reviews rated 3.5 stars or higher. If a product falls short on reviews or images, fix that first, because no bid strategy can make up for a page that does not convince the shopper. Ads buy attention only while you pay for them, while good images, copy and reviews keep selling afterwards, which is the same split we describe in how content marketing differs from advertising.

Questions we get asked about Amazon PPC

How much does Amazon PPC cost?

You set the cost yourself through your daily budget and bids, and you pay only for clicks, with no monthly fee. Amazon suggests starting at $10 a day, and click prices depend on how many sellers bid on the same searches, so check the suggested bids Amazon shows for your keywords before you set a budget.

Is Amazon PPC worth it for a new product?

Usually yes, because a new listing has no sales history to rank on organically, and ads are the fastest way to get the first clicks, sales and reviews. Amazon’s Sponsored Products guide also reports, from its own data, that new products are far more likely to generate ad-attributed sales when they are advertised than when they are not.

Should I run Amazon PPC myself or hire someone?

With one or two products and time to check reports weekly, running it yourself with the steps above is reasonable. Once you have many products, several ad types and a budget where wasted clicks add up, a specialist usually saves more than they cost.

What is a good ACOS on Amazon?

A good ACOS on Amazon is one below your profit margin after product cost, Amazon fees and shipping, because at that level each ad-driven sale still makes money. A product with a 30 percent margin is profitable on the first sale at any ACOS under 30 percent, and new campaigns often start higher before settling, as Amazon’s ACOS guide notes.

What is the difference between ACOS and TACOS?

ACOS divides your ad spend by the sales your ads brought in, while TACOS, or total advertising cost of sales, divides the same ad spend by all of your sales, including organic ones. TACOS shows whether advertising is growing the whole business, so a falling TACOS with steady ad spend usually means organic sales are rising alongside the ads.

Does Amazon PPC help organic rankings?

Amazon has not published that ads raise a product’s organic ranking, so treat any promise of a guaranteed organic boost with caution. What ads do reliably is bring a new listing its first clicks, sales and reviews, and those help the listing convert shoppers whether they arrive from an ad or from a regular search.

Is Amazon PPC better than Google Ads for selling products?

Amazon PPC is usually the better first choice for products already listed on Amazon, because its ads reach shoppers inside the store and send them straight to a page where they can buy with one click. Google Ads suits products sold on your own website, where you keep the customer data and avoid Amazon’s selling fees on each order.

Business buyers often start on Google instead, as our guide to B2B paid search for manufacturers explains.

If you sell online and want to see how your own store shows up in search, our free SEO audit scores your site for SEO, speed and AI search in about a minute. Our PPC services and Shopify SEO pages explain how we help ecommerce brands, and our guide to PPC competitor analysis shows how to study what rival sellers are bidding on.