June 27, 2025

The Ultimate Guide to Amazon Advertising 

If you are new to Amazon advertising, you need to understand the basics of Amazon’s advertising solutions to create effective advertising campaigns and optimize every penny spent. Learn how to boost your Amazon business with Amazon advertising.
The Ultimate Guide to Amazon Advertising 
The Ultimate Guide to Amazon Advertising 

Key takeaways:

  1. Amazon PPC (Pay Per Click) Ads, also known as Amazon Sponsored Ads, is an Amazon advertising platform that allows sellers to increase their products’ visibility and amplify Amazon sales. With Amazon PPC, you pay only when a customer clicks on your Amazon advert. 
  1. Running ad campaigns provides wider audience reach and specific targeting, ultimately increasing your conversion rate and product sales. 
  1. Sellers can use sponsored product ads, sponsored brand ads, and sponsored display ads to reach potential customers and increase sales. 
  1. Some important metrics to help Amazon sellers measure their results and optimize advertising campaigns include Advertising Cost of Sales (ACoS), Impressions, Clicks, Spend, Return on Ad Spend(ROAS), etc.

With millions of products sold on the Amazon marketplace, sellers need a competitive edge to stand out and ultimately increase sales on Amazon. This is where Amazon PPC (Pay-per-click) advertising comes in. 

Amazon sellers need to get their advertising strategy in place to minimize costs and maximize results. 

If you are new to Amazon advertising, you need to understand the basics of Amazon’s advertising solutions to create effective advertising campaigns and optimize every penny spent. 

In this guide, we will look at how to increase conversion rate on Amazon using Amazon advertising. Here’s what we’ll cover: 

  • What are Amazon PPC ads? 
  • Why are Amazon PPC ads important for your business? 
  • Types of Amazon PPC ads
  • How to start advertising on Amazon 
  • Best practices for Amazon advertising
  • Key metrics to measure your Amazon advertising success

What are Amazon PPC Ads? 

Amazon PPC (Pay Per Click) Ads, also known as Amazon Sponsored Ads, is an Amazon advertising platform that allows sellers to increase their products’ visibility and amplify Amazon sales. With Amazon PPC, you pay only when a customer clicks on your Amazon advert. 

The Amazon advertising platform is easy to use and allows sellers to set up different types of advertising campaigns in just a few minutes. 

Amazon PPC ads are for professional sellers and brand-registered sellers who want to reach new audiences and customers. 

Amazon PPC ads include Sponsored Products, Sponsored Brands, and Sponsored Display ads. Also, sellers who are under the Amazon Brand Registry have access to Amazon Live, Amazon Attribution, and Amazon Stores, which fall under Amazon Advertising. 

Benefits of Amazon PPC ads for your business

Advertising your products on Amazon is important if you want to expand your business and rake in significant sales. Let’s highlight a few benefits of leveraging Amazon advertising solutions:

  1. Increase in product sales

Perhaps one of the most obvious benefits of running PPC ads is to increase product sales. This is the major objective (whether short-term or long-term) for any Amazon seller. Running ad campaigns provides wider audience reach and specific targeting, which ultimately increases your conversion rate and product sales. 

  1. Reach more customers 

Leveraging Amazon Advertising exposes your product and brand to millions of potential customers. This exposure increases your customer and sales ratio. It also increases views, impressions, and conversion rates within a short time. 

  1. Brand awareness for new products

We all know that products that have the most sales are at the top of search results. If you have a new product, the chances of ranking high for major keywords are very slim. Running PPC campaigns is a great way to improve product organic ranking and sales potential.

  1. Improve organic rankings 

Running Amazon ads can significantly improve your organic rankings on search results. With more clicks and purchases from your ads, Amazon‘s algorithm recognizes your product as significant. Ultimately, this can improve your product’s organic search placement. 

  1. Increase in conversion rates. 

With Amazon advertising, you can reach a wider audience and get your product in front of interested customers. The more people get to know about your product through Amazon ads, the easier it is to find your product and ultimately increase your conversion rate. 

Types of Amazon PPC ads

Online retailers selling on Amazon can reach potential customers and increase sales using these types of Amazon PPC Ads:

  • Sponsored Products ads
  • Sponsored Brands ads
  • Amazon Display ads 

Sponsored Product ads 

Sponsored Product ads are one of the most common ads used by almost every seller. With Sponsored Products, you don't need to be brand-registered. They appear at the top of search results and on organic search results. 

You can use Sponsored Products to target product ASINS and specific keywords. 

You can do two types of targeting with Sponsored Products: Automatic targeting ads and Manual targeting ads

With automatic targeting, Amazon decides on the keywords to target based on your product. This is especially helpful if you are new to Amazon advertising and don't know which keywords to target. On the other hand, Manual targeting ads give you full control. You can decide which keywords to target and bid on. 

To use Sponsored Product ads, you only need to have a Professional Seller Account. Unfortunately, sellers with an Individual Seller Account do not have access to Sponsored Product ads. Also, to use Sponsored Products, your product needs to be Buy-Box eligible.  

Benefits of Sponsored Product Ads 

  • Sponsored Product ads push you up search results and get you in front of targeted shoppers who are purchase-ready.
  • If you have a new product, Sponsored Product ads can increase your impressions, clicks, and ultimately sales. 
  • With increased traffic and sales from Sponsored Product ads, you can improve your organic search position over time.

Sponsored Brands ads 

Sponsored Brands ads, formerly known as Amazon Headline Search Ads, help you promote your brand and advertise your products. 

Sponsored Brands are banner ads that feature your brand logo, thumbnails of three of your products, and a tagline. It is more advanced and only available to sellers enrolled in the Amazon Brand Registry. 

This ad helps to increase brand awareness, allowing sellers to advertise up to three products at once. They usually appear on Amazon search results above the Sponsored Products ads. 

Sponsored Brand ads can appear in three different formats:

  • Product collection: This ad type allows you to showcase up to three of your products and drive traffic to your Amazon store or landing page. 
  • Store Spotlight: This ad type is only available to sellers with an Amazon store. An Amazon store is a custom-made mini-website that allows sellers registered under the Amazon Brand Registry to advertise their brand and uniquely tell their story. With this ad type, brands can advertise multiple products from different page categories on their Amazon store.
  • Sponsored Brand Videos: This ad type can give sellers an edge over competitors. It is catchy and plays in a loop. This is great for customers scrolling through search results. A good video ad can give customers enough information about your product in a few seconds, increasing your conversion rates. Amazon recommends that videos should be short (between 15 to 30 seconds) and informative. 

Benefits of Sponsored Brands ads

  • Sponsored Brand ads have less competition as it is only available to brands registered under the Amazon Brand Registry. 
  • Sponsored Brand ads allow you to advertise up to three products, giving customers more products to look at
  • With this type of ad, you can stand out in search results and drive traffic to your Amazon store.

Amazon Display ads

Amazon Display ads are a powerful advertising tool that can reach customers both on and off Amazon. This means you can advertise to customers on apps and third-party websites.

With Display ads, you target customers based on factors like shopping behavior and interests, instead of keywords or competitor products. 

With Amazon Display ads, you can reach customers no matter where they are on their buying journey.

For example, you can use Display ads to retarget customers who viewed your listing but couldn't make it to the checkout section. 

There are three types of targeting with Amazon Display ads: 

  • Product targeting ads: With this ad type, you can target customers searching for your product, competitors' products, or products in related categories. 
  • Audiences: Views remarketing: With this ad type, you can retarget customers who viewed your listing or didn't complete a purchase. This ad will appear both on and off Amazon to customers who viewed your listing in the last 30 days but didn't make a purchase. This is a great way to convert potential buyers who are interested in your product. 
  • Audiences: Interests: With this ad type, you can advertise your products to customers based on specific interests. 

Benefits of Amazon Display Ads 

  • Display ads are only available to sellers registered under the Amazon Brand Registry, which means you have less competition. 
  • With Display ads, you can retarget customers who viewed but didn’t buy our product.
  • With Display ads, you can reach customers both on and off Amazon (third-party websites and apps) and increase conversion rates. 

How to start advertising on Amazon 

To start advertising your products on Amazon, you only need to go through three simple steps: 

  • Go to your Seller Central account, click on the Advertising bar > Campaign Manager, and then select Create Campaign.
  • Next, choose your campaign type. It could be Sponsored Product ads, Sponsored Brand ads, or Sponsored Display ads. 
  • Create and name your campaign and add your budget. 
  • Next, choose targeting. You can choose automatic targeting (where Amazon chooses the keywords and audiences) or manual targeting (where you choose keywords or products).
  • Next, choose which product(s) you want to feature in your ads.
  • Review your setup and click “Launch Campaign”. 
  • Track performance and make adjustments to your ad based on data. 

Best practices for Amazon advertising

To navigate the competitive Amazon landscape effectively, you want to employ best practices that help optimize your ad spend and increase your product’s visibility. Here are some best practices for successful Amazon advertising:

  1. Maximize all Ad types
  2. Research and optimize keywords
  3. Utilize negative keywords
  4. Optimize your product listings 
  5. Create compelling copy
  6. Manage your advertising budget
  7. Carry out a regular audit
  8. Leverage Amazon's reporting tools
  9. Stay up to date with changes 

Maximize all Ad types.

To establish a strong brand presence and stay ahead of your competitors, you want to utilize all types of Amazon ads. Integrating Sponsored Products, Sponsored Brands, and Sponsored Display ads, 

can significantly increase brand awareness and maximize your ROI. 

Research and optimize keywords

Effective keyword usage is the crux of running a successful Amazon advertising campaign. 

Start with broad research and refine. Use a mix of broad phrases and more specific keywords to see what performs best, then narrow down to the most effective keywords.

You can use Amazon's auto-targeting feature initially to discover relevant keywords. Then, refine your strategy based on performance data.

You can also identify keywords your competitors rank for using tools like Helium 10, Jungle Scout, or Ahrefs. This can provide insights into potential opportunities that you may be missing.

Utilize negative keywords

Negative keywords prevent your ads from showing up in irrelevant searches, saving your ad budget. You want to use search term reports to identify keywords that are not converting and add them as negative keywords. Regularly review and update your negative keyword list to ensure you are creating relevant ads. 

Optimize your product listings. 

A well-optimized product listing can improve the effectiveness of your ad.

Check to make sure your product titles are clear and keyword-rich without being spammy. In the bullet point section, highlight the key features and benefits of your product briefly.

In the product description part of your listing, provide detailed information about your product to help potential customers make an informed decision.

Use high-quality images and include multiple angles and lifestyle shots.

In addition, gather positive reviews and ratings, as these can significantly address customer objections and improve your conversion rates.

Create compelling copy

The quality of your product copy is paramount. Ensure correct grammar, sentence construction, and relevance in your titles and descriptions. Highlighting the benefits of your product and focusing on what makes it unique can attract more attention. Reviewing top-ranking competitors' product pages for inspiration and structuring your descriptions for Amazon's A9 algorithm can enhance your copy's effectiveness.

Manage your advertising budget.

Properly allocating your Amazon advertising budget is key to ensuring your campaigns are cost-effective. 

You want to start with a modest budget to test the waters and scale up once you identify high-performing ads. You can set daily budget caps to control your spending and avoid overspending.

Keep an eye on your Advertising Cost of Sales (ACoS) and go for an ACoS that aligns with your profitability goals.

Carry out a regular audit.

One way to improve your Amazon advertising is to carry out regular audits. Regularly auditing your campaign's sales performance also ensures that your marketing budget is distributed strategically based on your goals and sales targets. This will help you maintain the right balance and run successful ads. 

Leverage Amazon's reporting tools

Amazon provides robust reporting tools that offer insights into your campaign performance. You can access these performance reports and analyze them to understand which ads, keywords, and products are performing best.

You can then use the insights from these reports to adjust your bids, keywords, and overall Amazon advertising strategy.

Stay up to date with changes. 

Amazon frequently updates its advertising platform, so you want to stay informed about new features, policy changes, and best practices by following Amazon’s latest announcements and industry news.

Key metrics to measure your Amazon advertising success 

There are important metrics to help Amazon sellers measure their results and optimize advertising campaigns. Here are a few advertising metrics to look out for: 

  • Advertising Cost of Sales (ACoS): This metric is represented as a percentage of sales spent through advertising. Ultimately, this metric measures how efficient your ad was. It is calculated by dividing the total amount spent on ads by the revenue generated. 
  • Impressions: This indicates how many times your ad was displayed to a customer on the Amazon marketplace. 
  • Clicks: This shows you the number of times your ad was clicked. Amazon will exclude accidental clicks.
  • Total Sales: This shows you the total amount of sales recorded within a week of clicking on your ad.
  • Spend: This shows you the total amount of click costs for each product ad. 
  • Return on Ad Spend(ROAS): This is another metric that measures the efficiency of your ad. To calculate your ROAS, divide the sales dollars for your ad by your ad spend. For example, if you get an ROAS of 7, it would mean that for every dollar spent, you get revenue of $7. 
  • New-to-brand metrics: This metric shows how many first-time customers your brand is attracting and is great for tracking brand growth and acquisition.

Conclusion 

Amazon continues to provide tools and solutions to help sellers grow their business and increase sales and revenue. 

With Amazon Advertising, you can get your products in front of targeted customers and increase brand awareness and sales. There are different advertising types you can choose from. 

When registered under Amazon Brand Registry, you can access Sponsored Brand ads and Display ads, which allow you to create video ads and retarget customers off Amazon. You can still leverage Sponsored Product ads to reach potential customers if you are not brand-registered.

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Frequently Asked Questions (FAQs)

What are the three types of Amazon advertising?

Amazon offers sellers three main types of advertising:

  • Sponsored Products ads: This ad promotes individual product listings in Amazon search results and product detail pages. They are best for boosting visibility and driving traffic to specific products.
  • Sponsored Brands ads: Formerly known as Amazon Headline Search Ads, these ads help you promote your brand and advertise your products. Sponsored Brands are banner ads that feature your brand logo, thumbnails of three of your products, and a tagline.
  • Amazon Display ads: Amazon Display ads are a powerful advertising tool that can reach customers both on and off Amazon. This means you can advertise to customers on apps and third-party websites.

How does Amazon advertising work?

Amazon advertising works on a pay-per-click model, where advertisers bid on keywords or audience segments to display their ads to shoppers. Here is a breakdown of how Amazon Advertising works: 

  1. Campaign type: Amazon allows you to choose from three different types of campaigns: sponsored product ads, sponsored brand ads, and Amazon display ads. 
  2. Targeting option: You can target ads based on keywords, audiences, and products. 
  3. Bidding system: You set a maximum bid you're willing to pay per click. Amazon uses a second-price auction, so you typically pay just above the next highest bid.
  4. Ad placement: Ads appear in search results, product detail pages, and even off-Amazon (for Sponsored Display). Your ad placement is determined by bid amount, ad relevance, and product listing quality.
  5. Pay-per-click: You’re charged only when a shopper clicks your ad, not when they see it. 

How much does it cost to advertise on Amazon?

The cost to advertise on Amazon varies depending on the type of ad, among several factors. The average cost per click for Amazon ads falls within the range of $0.71 to $1.20, depending on the product category. 

  • Sponsored Products: The average cost per click falls between $0.81 – $1.30 (this can vary depending on your keyword’s competition level). 
  • Sponsored Brands: The average cost per click falls between $1.10 – $2.50 (this can vary depending on the category’s competition level). 
  • Sponsored Display: The average cost per click can fall between $0.80 – $1.60. Sellers can also operate on a Cost-Per-Mille (CPM) basis. The average CPM for Sponsored Display ads ranges from $4 to $12. 

Other factors that can affect advertising on Amazon include keywords, ad relevance, keyword competition, and your daily campaign budget, among other factors. 

How do I attract buyers on Amazon?

To attract buyers on Amazon:

  • Optimize your product listings with relevant keywords, an engaging product title, high-quality images, and a persuasive product description. 
  • Use tools or Amazon’s automated pricing to stay competitive and consider offering coupons, promotions, or lightning deals.
  • Deliver a great product and customer service, and build strong reviews and ratings. 
  • Maintain competitive pricing, good stock levels, and fast shipping to win the buy box. 
  • Leverage Amazon Advertising to increase visibility and awareness, retarget, and reach new audiences.

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