Selling successfully on Amazon is no longer simply a case of creating a strong product listing and waiting for customers to find it. In competitive categories, advertising has become an important part of building visibility, generating sales and protecting market share, which is where Amazon PPC (pay-per-click) comes in.
Amazon PPC, also known as Amazon Ads, can put your products in front of shoppers while they are actively searching, comparing products and making buying decisions. Used effectively, it can help launch new products, increase sales of established ASINs, defend branded searches and provide valuable insight into how customers discover your products.
However, there is a significant difference between running Amazon advertising and running it profitably, as campaign structure, keyword selection, bids, budgets, search terms, product targeting, placements and profitability all need ongoing attention. Without this, it is remarkably easy to increase advertising spend without generating proportionate growth.
This complete guide to Amazon PPC from Léonie Ford-Miah, head of client services at specialist agency for Amazon Fluid Marketplaces, explains to brands new to Amazon how advertising works, how to structure and optimise campaigns, which metrics matter and how to decide whether managing PPC in-house or working with an Amazon PPC agency is the right approach for your business.
Contents
- What is Amazon PPC and how does it work?
- The main types of Amazon advertising
- Automatic vs manual Amazon PPC campaigns
- Amazon PPC keywords, match types and search terms
- Product targeting and keyword research
- How to structure Amazon PPC campaigns
- Amazon PPC budgets, bidding and placements
- The Amazon PPC metrics you need to understand
- How to optimise Amazon PPC campaigns
- Amazon PPC for product launches and brand growth
- Scaling Amazon PPC and supporting organic performance
- When should you use an Amazon PPC agency?
- Managing Amazon PPC in-house vs using an agency
- Questions to ask an agency
- Frequently asked questions about Amazon PPC
What is Amazon PPC and how does it work?
Amazon PPC, or Amazon Ads, is advertising where an advertiser generally pays when somebody clicks their ad, with PPC standing for pay-per-click.
For Sponsored Products, for example, Amazon uses an auction-based cost-per-click model. Advertisers set the maximum amount they are willing to bid per click, and competitive bids can increase the likelihood that an ad is displayed.
Unlike traditional advertising, Amazon PPC reaches shoppers within a retail environment, meaning someone searching on Amazon for a product is often considerably further along in their buying journey than someone who encounters an advert while browsing the wider web.
Imagine you sell insulated water bottles and a shopper searches for “1 litre insulated water bottle”. Without advertising, your visibility depends heavily on your organic position, whereas with Amazon PPC you can compete for relevant advertising opportunities associated with that search.
When a shopper searches for or browses products, Amazon identifies advertisements that are eligible for the available placements. Advertisers compete for those opportunities through their bids and targeting, after which relevant ads can appear in search results or elsewhere across the shopping experience.
For cost-per-click campaigns, you pay when a shopper clicks the advertisement. Campaign data can then be analysed to determine whether those clicks generated sales and, importantly, whether the cost of generating those sales was commercially worthwhile.
Although the basic principle is relatively straightforward, managing the economics of Amazon PPC is more complicated because impressions, clicks, and even sales do not necessarily indicate profitability. Successful Amazon PPC management requires an understanding of the relationship between visibility, traffic, conversion, advertising spend, revenue and profit.
The main types of Amazon advertising
Amazon provides several advertising formats suited to different objectives and stages of the customer journey. For many brands, Sponsored Products form the foundation of their PPC activity, with Sponsored Brands and display advertising providing additional opportunities as the strategy develops.
Sponsored Products
Sponsored Products are cost-per-click ads that promote individual product listings and can appear in Amazon shopping results and on product detail pages.
They can be particularly useful for launching products, increasing visibility for priority ASINs, targeting high-intent searches, appearing on competing product pages and defending branded searches.
Amazon allows advertisers to use automatic and manual targeting, with manual campaigns able to target keywords or products.
Sponsored Brands
Sponsored Brands allow eligible advertisers to promote their brand and a selection of products rather than concentrating exclusively on one ASIN.
Depending on the format, they can include elements such as a brand logo, headline, video and multiple products, with shoppers directed towards a Store or relevant product experience.
Sponsored Brands can be useful for increasing awareness, showcasing a wider product range and protecting visibility around important branded or category searches.
Display advertising
Amazon’s display advertising offering provides another way to reach relevant shoppers, including through contextual and audience targeting. It can support objectives such as reaching new audiences, engaging shoppers browsing related products or categories, remarketing and increasing brand awareness.
For brands with mature Sponsored Products activity, display can add another layer to a broader Amazon advertising strategy rather than relying entirely on shoppers who are already conducting relevant searches.
Automatic vs manual Amazon Ads campaigns
One of the first decisions when creating Sponsored Products campaigns is whether to use automatic or manual targeting, though they should not be treated as mutually exclusive, as well-managed accounts often use both.
With automatic targeting, Amazon matches your advertised product with relevant shopping queries and products based on information about the listing and shopping activity. Automatic campaigns can be particularly useful when launching a product or discovering how customers actually search.
They can uncover search terms you may not have considered during keyword research, but they should not simply be switched on and forgotten. Their search terms and targeting data need review so that strong performers can inform other campaigns and inefficient traffic can be controlled.
With manual targeting, advertisers have greater control over what they target. You can select keywords or use product targeting to focus on particular ASINs and categories.
A useful way to think about the relationship is that automatic campaigns can help discover opportunities, while manual campaigns allow you to exercise greater control over the opportunities you already understand. The balance between them will change as campaigns accumulate data and you learn more about the searches and products that generate profitable sales.
Amazon PPC keywords, match types and search terms
Keywords tell Amazon which types of searches you want to target in manual keyword campaigns.
If you sell stainless steel frying pans, potential keywords could include “stainless steel frying pan”, “28cm frying pan”, “induction frying pan” and “stainless steel pan”. These terms vary in specificity, competition and likely search volume, which is why effective keyword targeting involves more than simply identifying the phrases with the highest number of searches.
Broad, phrase and exact match
Amazon Sponsored Products offers three principal keyword match types: broad, phrase and exact.
Broad match provides the widest reach and can help uncover related customer searches, making it useful for discovery. That additional reach needs monitoring because it can also generate less commercially valuable traffic.
Phrase match offers greater control by matching searches containing the components of your keyword in the same order, while still allowing additional words and certain close variations.
Exact match is the most restrictive and can be particularly useful when you have identified search terms that consistently generate valuable sales and want tighter control over bidding.
A mature account may use all three match types, with bids and budgets reflecting the role each one plays.
Keywords vs search terms
A keyword is something you choose to target, whereas a search term or shopping query is what the customer actually enters into Amazon.
This distinction matters because search-term data shows what customers are genuinely doing rather than what you assumed they would do. If you target the broad-match keyword “running belt”, for example, your advertisement may become eligible for several related customer searches.
Analysing those searches can uncover profitable new keywords, irrelevant traffic and differences between the terminology your business uses and the language customers prefer.
Negative keywords
Negative keywords allow you to prevent advertisements from appearing against unwanted searches.
If you sell premium leather laptop bags but repeatedly receive unproductive clicks from searches for children’s laptop cases, negative targeting can help you stop paying for clearly irrelevant traffic.
Negative keywords should nevertheless be used carefully because blocking a term before sufficient data has accumulated can remove potentially valuable traffic. The objective is not to make campaigns as restrictive as possible but to reduce waste while retaining useful opportunities for discovery.
Product targeting and keyword research
Amazon PPC is not limited to keywords, as product targeting allows Sponsored Products campaigns to focus on individual products or categories.
You might target competing products where your own offer provides a compelling alternative, advertise accessories against products they complement, or target your own ASINs to increase visibility across your catalogue.
Category targeting provides broader reach, while individual ASIN targeting allows more precise control. The relative importance of product targeting will vary across businesses, with companies selling replacement parts or accessories potentially finding it particularly valuable, as compatibility can be central to the purchase decision.
How to research Amazon PPC keywords
Good keyword research starts by understanding how customers describe your products.
Consider the product type, features, materials, dimensions, audience, intended use and problems it solves, as well as alternative terminology and the products shoppers may compare yours against.
Potential keywords might cover core category terms, product attributes, use cases, branded searches, competitor terms and specific long-tail queries.
Your own Amazon data should become increasingly important over time. Search-term reports reveal the queries that actually generate impressions, clicks and sales, while automatic campaigns can help identify relevant searches you may not have considered.
Do not assume two similar-looking keywords have equal commercial value. “Coffee grinder” and “electric burr coffee grinder for espresso” fall under the same general category but reflect different levels of specificity and potentially very different purchase intent.
The objective is not to create the longest possible keyword list, but to understand the different ways valuable customers might discover your products.
How to structure Amazon PPC campaigns
Campaign structure is an area where self-managed Amazon PPC accounts can become unnecessarily difficult to control.
Putting everything into a handful of campaigns provides limited control over budgets and bids, while creating hundreds of excessively fragmented campaigns can turn routine optimisation into an administrative burden.
A good account structure should make it easier to understand which products are consuming budget, which search terms generate profitable sales, how much is being spent on branded activity and whether priority products receive sufficient investment.
A relatively simple catalogue might separate campaigns according to product group, targeting type and purpose. Larger brands may need additional separation by marketplace, product family, lifecycle stage, margin, branded versus non-branded traffic or strategic priority.
There is no universally correct campaign architecture because the right structure depends on catalogue size, advertising spend, marketplace coverage and reporting requirements. The guiding principle is that campaign structure should make meaningful decisions easier.
As your account develops, the original campaign structure should also be reviewed rather than treated as permanent. A structure designed for a business that sold 10 products in one marketplace may become inappropriate when the same brand sells 100 products across several countries.
Amazon PPC budgets, bidding and placements
There is no universal Amazon PPC budget, as an appropriate level of spend depends on your category, margins, average selling price, conversion rate, objectives, competition and appetite for growth. However, it is generally advised to start with 10 local currency units (e.g. £10 or $10) per campaign per day.
A business launching a new product may deliberately accept higher advertising costs to build visibility and drive sales, whereas an established brand protecting a mature product may have very different efficiency expectations.
Rather than simply asking how large your daily budget should be, consider how much you can afford to spend to acquire a sale while still meeting the commercial objective for that product. Answering that question requires a clear understanding of your economics, including Amazon fees, product costs, fulfilment, VAT and other relevant variable costs.
Bidding strategies
Bids influence your competitiveness in Amazon’s advertising auctions, but increasing bids is not synonymous with improving performance because additional impressions and clicks must still convert at a commercially viable rate.
Sponsored Products provides fixed and dynamic bidding options. Depending on the selected strategy, Amazon can reduce bids when a click is considered less likely to convert, or increase or decrease them based on predicted conversion likelihood.
The appropriate approach depends on the campaign. A proven exact-match campaign targeting profitable searches might justify more aggressive bidding than an exploratory campaign testing broad traffic.
Placements
Placement performance also deserves attention because advertisements can appear across various parts of Amazon’s shopping experience, including search results and product pages.
Before increasing a bid or placement adjustment, identify the problem you are trying to solve. Low impressions may relate to bidding, but they could also indicate low demand or relevance, while high spend with poor returns could be caused by poor search-term quality or a product listing that fails to convert.
Good PPC management avoids treating bid increases as the answer to every performance problem.
The Amazon PPC metrics you need to understand
Amazon provides a large volume of advertising data, but a relatively small set of metrics underpins most PPC analysis.
Impressions indicate how often an advertisement was displayed, while clicks show how many times shoppers interacted with it. Neither metric should be viewed as inherently positive because visibility and traffic only matter when they contribute towards your objectives.
Click-through rate (CTR) measures the proportion of impressions that result in clicks and can indicate how relevant and appealing your advertisement is to shoppers.
Cost per click (CPC) is the average amount paid per ad click. CPC varies considerably between categories, searches and levels of competition, so the key question is not whether a click appears expensive in isolation but whether traffic acquired at that cost converts profitably.
Conversion rate shows how effectively traffic turns into orders or sales. This is where PPC performance meets retail performance because poor imagery, pricing, reviews, copy or delivery can all prevent relevant advertising traffic from converting.
ACoS, ROAS and TACoS
Advertising cost of sales (ACoS) compares advertising spend with attributed advertising sales. If £20 of advertising generates £100 in attributed sales, the ACoS is 20%.
There is no universally good ACoS because the appropriate target depends on your margins and commercial objectives. Before setting targets, understand the approximate point at which advertising stops contributing profit after relevant costs, often referred to as break-even ACoS.
Return on ad spend (ROAS) examines the same relationship from the opposite direction: if £20 in ad spend produces £100 in attributed sales, ROAS is 5.
Total advertising cost of sales (TACoS) compares advertising spend to total Amazon sales rather than only to advertising-attributed sales, providing useful context when assessing the relationship between paid advertising and the broader performance of the Amazon business.
These metrics become considerably more useful when viewed alongside margin and commercial objectives rather than against generic benchmarks.
How to optimise Amazon PPC campaigns
Effective optimisation is a continuous process rather than an occasional exercise in increasing and decreasing bids.
Search terms receiving substantial spend without generating sales may need lower bids or negative targeting, while profitable terms with limited visibility may justify greater investment. Campaigns that repeatedly exhaust their budgets may deserve additional funding, but only if the existing spend is producing commercially desirable results.
It is equally important to look beyond Campaign Manager because Amazon PPC cannot be considered separately from the product detail page. Advertising can bring shoppers to a listing, but it cannot make them buy.
Before aggressively increasing spend, check whether the product can convert additional traffic by reviewing its imagery, product information, price, promotions, ratings, reviews, stock availability, delivery proposition, and A+ Content or branded store where applicable.
Two advertisers can target the same keyword but achieve completely different PPC results if one has stronger explanatory imagery, reviews, pricing and product positioning, which means that sometimes the most effective PPC optimization is an improvement to the product offer rather than a bid adjustment.
Common Amazon PPC mistakes
One of the most common mistakes is treating Amazon advertising as a set-and-forget channel. Search behaviour, competition, CPCs, pricing and product performance change over time, meaning campaigns that were efficient several months ago may no longer perform in the same way.
Other common problems include focusing exclusively on ACoS, increasing budgets without addressing inefficient spend, ignoring search-term data, making decisions before sufficient data has accumulated and treating every product as though it has identical margins and objectives.
Reducing ACoS by cutting almost every exploratory campaign, for example, may improve the headline figure while restricting customer acquisition and growth. Equally, accepting excessive ACoS simply to maximise revenue can erode margin.
Optimisation therefore needs to consider search terms, targets, campaigns, products and overall account performance rather than making isolated changes without understanding their commercial impact and their role in the full marketing funnel.
Amazon PPC for product launches and brand growth
Advertising is particularly important when launching a new product because the ASIN may initially have limited organic visibility and sales history.
A launch strategy might combine automatic discovery campaigns with manual keyword campaigns targeting key category and long-tail searches. Product targeting can also position the new ASIN against relevant alternatives.
New products can initially produce weaker advertising efficiency because they may have fewer reviews and less sales history than established competitors, making the strength of the product detail page especially important. PPC should therefore be evaluated as part of the launch strategy, rather than expecting a new ASIN to immediately achieve the efficiency of a mature product.
Branded and non-branded PPC
As an account develops, separating branded and non-branded activity can provide a clearer picture of performance.
Customers searching specifically for your brand already demonstrate awareness and intent, so branded advertising can perform very differently from generic campaigns designed to acquire customers. Combining the two can allow strong branded results to disguise inefficient non-branded activity.
Advertising against your own brand may help occupy valuable advertising space, direct customers towards priority products and limit competitor visibility, although its incremental value should be assessed rather than assumed.
Competitor targeting
Competitor targeting can expose your products to shoppers considering another brand, but these customers may have strong existing preferences.
The strategy is most likely to make commercial sense when your product provides a compelling alternative in areas such as price, reviews, features or presentation. Keeping competitor activity separate also makes it easier to determine whether the investment is genuinely producing worthwhile results.
Scaling Amazon PPC and supporting organic performance
Scaling Amazon PPC involves more than increasing budgets because doubling spend does not guarantee twice the sales.
As investment grows, incremental traffic may come from more expensive auctions, broader searches, or customers with lower purchase intent. A campaign’s first £5,000 of monthly spend could therefore generate a very different return from the next £5,000.
When scaling, consider not only whether advertising is profitable overall but whether additional advertising spend is likely to remain productive.
PPC data can also provide insight beyond advertising. Search terms can reveal how shoppers describe your products, while high-converting searches may expose features or use cases customers particularly value. Product-targeting performance can show which competing products customers consider alongside yours, with these insights potentially informing listing copy, imagery, product development, pricing and bundling.
Paid and organic visibility should also form part of a joined-up Amazon strategy. PPC can generate additional visibility and sales for relevant searches, while strong product performance can contribute to the wider commercial momentum of an ASIN.
Advertising should not, however, be treated as a guaranteed shortcut to stronger organic rankings. The more sustainable approach is to align PPC with Amazon SEO relevant listings, competitive products, good conversion rates and reliable stock availability so paid and organic activity support the same commercial priorities.
When should you use an Amazon Ads/PPC agency?
A brand might initially try to manage their Amazon PPC internally when they have a relatively small catalogue and manageable advertising spend, before running into issues that require specialist support from an agency. These brands might not have the internal expertise or budget to hire their own team, so an Amazon Ads agency for Amazon such as Fluid Marketplaces fills a vital gap.
Specialist support can also be valuable when performance is assessed almost entirely through ACoS without connecting advertising to margins, total sales and wider commercial objectives.
What should an Amazon Ads/PPC agency do?
Effective Amazon PPC management involves much more than creating campaigns or adjusting bids.
An agency should be able to analyse existing account structure, identify wasted spend, research search opportunities, manage keyword and product targeting, control budgets, optimise bids and placements, analyse search terms and report results in commercially meaningful terms, such as the strategy used in this Amazon PPC case study.
It should also recognise when the problem lies outside the advertising account. If PPC generates relevant traffic but the product does not convert, repeatedly changing bids may achieve little effect, whereas improvements to pricing, listing quality, reviews, or inventory could have a greater impact.
The role of a good Amazon PPC agency should therefore be to understand your catalogue, margins, stock position, competitive environment and growth objectives before translating those priorities into an advertising strategy and this is the approach we provide to our clients at Fluid Marketplaces.
Managing Amazon PPC in-house vs using an agency
Neither approach is automatically right for every business and it largely depends on the stage the brand is at.
In-house management provides direct agile control and can work extremely well when someone on the team has both the expertise and time to manage campaigns properly. The challenge is often knowing whether this person or team is providing a good return on investment; as with permanent employees, there are many hidden costs. Agency costs are generally more transparent. It is rare to find one headcount who is an expert copywriter, media planner and buyer, and content builder.
An Amazon PPC agency often brings a breath of specialist expertise and an Amazon growth strategy more cost-effectively than an in-house resource, with dedicated management capacity. That said, as a client, you need to choose a partner that understands your commercial objectives rather than applying an identical campaign structure to every account.
For some brands, a combination works well, with strategic knowledge and decision-making retained internally while an agency provides specialist execution, analysis and support.
Questions to ask an Amazon Ads/PPC agency
If you are considering outsourcing PPC management, avoid judging potential agencies purely on promises to reduce ACoS. Instead, find out how they connect advertising performance with the economics of your business.
Questions worth asking include:
- How will you determine appropriate ACoS targets for our products?
- How do you separate branded performance from new customer acquisition?
- How will you identify and reduce wasted spend?
- How do you approach keyword discovery and negative targeting?
- How frequently will campaigns be reviewed?
- How do you assess PPC in relation to total Amazon sales?
- What information do you need about margins, stock and commercial priorities?
- How will performance be reported?
- How do you identify when a listing or retail issue is restricting PPC performance?
- How will stock & delivery methods affect your advertising decisions.
The answers should demonstrate whether the agency views Amazon PPC as an isolated advertising exercise or as part of a broader commercial strategy.
Frequently asked questions about Amazon PPC
What does PPC mean on Amazon?
PPC means pay per click. With Amazon’s CPC advertising products, advertisers only pay when shoppers click their advertisements rather than simply when an ad is displayed.
How much does Amazon PPC cost?
There is no fixed cost for Amazon PPC because advertising costs depend on factors including competition, targeting, category and the amount of traffic you pursue. Sponsored Products uses auction-based cost-per-click pricing, with advertisers setting bids for clicks.
Is Amazon PPC worth it?
Amazon PPC can be an important source of visibility and sales, but whether it is commercially worthwhile depends on campaign performance and product economics. Advertising revenue should therefore be considered alongside costs, margins and wider business objectives.
Can I run Amazon PPC myself?
Yes. Many brands successfully manage campaigns internally, particularly during the early stages of selling on Amazon. As catalogue size, advertising spend and campaign complexity increase, however, PPC can require considerably more time and specialist expertise.
What is the difference between Amazon SEO and PPC?
Amazon SEO focuses on improving organic product visibility and relevance, while PPC involves paying to boost visibility of your products. They perform different functions but should work together because listing quality, keyword relevance and conversion performance affect the wider success of an Amazon strategy.
How long does Amazon PPC take to work?
Campaigns can begin generating visibility and clicks relatively quickly once live and eligible, but meaningful optimisation takes longer because decisions require sufficient performance data. A high-volume ASIN can generate actionable information much faster than a niche product receiving only a small number of clicks.
Why is my Amazon PPC not converting?
Poor conversion can result from irrelevant targeting, broad search terms, uncompetitive pricing, weak images, low review volume, poor ratings or an unclear product proposition. Analyse both the advertising traffic and the product detail page before assuming the bid is the problem.
What is the difference between ACoS and TACoS?
ACoS compares advertising spend with advertising-attributed sales, while TACoS compares advertising spend with total sales – from organic and paid attributed sales. ACoS helps assess advertising efficiency, whereas TACoS provides wider context about advertising’s relationship with overall Amazon performance.
What is a good Amazon PPC conversion rate?
There is no conversion rate that should be considered good for every product because performance varies according to category, price, reviews, brand recognition and customer intent. Your own historical results and comparable products usually provide more useful context than a generic benchmark.
Should I use automatic or manual Amazon campaigns?
In many cases, both approaches have a role. Automatic campaigns can support discovery and uncover useful searches and product opportunities, while manual campaigns provide greater control over specific keywords and product targets.
When should I consider using an Amazon PPC agency?
An Amazon PPC agency may be worth considering when the amount of advertising spend or number of campaigns makes consistent in-house optimisation difficult, when profitability is not keeping pace with advertising growth or when you need specialist expertise to support expansion.
The right agency should be able to demonstrate how PPC decisions relate to your wider commercial objectives rather than focusing exclusively on individual advertising metrics.
How can Fluid Marketplaces help with Amazon PPC?
Fluid Marketplaces helps brands develop and manage Amazon PPC strategies focused on sustainable, profitable growth rather than vanity metrics.
From campaign structure and keyword strategy to bid optimisation, wasted-spend reduction and ongoing performance analysis, our Amazon PPC agency team works to make advertising an effective part of your wider Amazon strategy.
If you want to understand where your Amazon advertising budget is being spent, where performance could be improved and how PPC can support your next stage of growth, speak to Fluid Marketplaces about your Amazon PPC strategy via our contact us page.
