Overview

Amazon’s Pay‑Per‑Click (PPC) platform enables sellers to place ads directly inside the Amazon shopping journey, driving traffic to their product detail pages. Since its 2012 debut, the service has grown to include Sponsored Products, Sponsored Brands, and Sponsored Display, each targeting a different stage of the buyer funnel. Mastering PPC is essential for sellers who want to capture a larger share of Amazon’s high‑intent traffic while keeping advertising costs in line with profit margins.

Key Points

• Sponsored Products dominate spend — More than 80 % of Amazon’s advertising revenue comes from Sponsored Products, making them the default entry point for most new campaigns.
• Automatic vs. manual targeting — Automatic campaigns let Amazon’s algorithm match ads to relevant search terms, whereas manual campaigns give sellers full control over the exact keywords they bid on.
• Bid adjustments affect placement — Raising a keyword bid by roughly 10 % can shift an ad from the lower half of the results page to the top slot, often boosting click‑through rates by 15‑20 %.
• ACoS is the primary performance metric — Advertising Cost of Sale (ACoS) measures ad spend as a percentage of sales; new sellers typically aim for an ACoS between 15 % and 30 % to stay profitable.
• Negative keywords safeguard budgets — Adding terms such as “free,” “used,” or “tutorial” to the negative keyword list prevents ads from appearing on low‑intent queries that rarely convert.
• Data‑driven optimization fuels growth — Regularly reviewing search‑term reports, pausing under‑performing keywords, and tweaking bids can lift return on ad spend (ROAS) by up to 25 % within a single month.

How Amazon PPC Works

1. Campaign creation — Choose an ad type (e.g., Sponsored Products) and set a daily budget; a seller launching a new silicone baking mat might start with a $25 daily budget to test the market.
2. Targeting selection — In an automatic campaign Amazon scans the product’s title, description, and backend keywords to serve the ad on relevant searches; in a manual campaign the seller could explicitly target “heat‑resistant silicone baking mat.”