Running ads on Amazon helps your product stand out, reach more shoppers, and drive sales. This guide will walk you through everything you need to know about how to advertise on Amazon, even if you’re new to it.
What Are Amazon Ads?
Similar to how Google’s search engine works, when you type a keyword into Amazon’s search bar, the first few results you see are often paid ads. These look like regular listings, but you’ll notice a small “Sponsored” label next to them in subtle grey text.
These ads run on a pay-per-click (PPC) or cost-per-click (CPC) model. This means you only pay when someone clicks on your ad. You get to set a daily budget and choose how much you’re willing to bid for each click. The more competitive your bid (and the more relevant your product), the better your chances of getting a prime ad spot.
Why Advertise on Amazon?
Advertising on Amazon gives your products a much better chance of being seen and bought. It’s that simple. When you sell on Amazon, you’re competing with thousands and even millions of other listings. And unless your product ranks high in search results, most shoppers won’t even know it exists.
Another big reason is that people there are ready to buy. According to a 2023 survey by Jungle Scout, 74% of U.S. shoppers go straight to Amazon when they’re ready to search for a product. That’s a huge pool of potential buyers with high purchase intent.
It can also help you improve your organic rankings. When your ads help generate more sales, that improved sales history tells Amazon your product is popular. As a result, Amazon is more likely to show it higher in search results, even without ads. That’s a big win for long-term visibility.
Types of Amazon Ads
Amazon offers 4 types of ads: Sponsored Products, Sponsored Brands, Sponsored Display, and Sponsored TV. Here’s what you need to know about each one of them:
Sponsored Products
These are the most common, with around 75% of sellers using them. You don’t need to be brand-registered to run them. Once you’ve done some basic keyword research, you can launch a Sponsored Products campaign in just a few minutes. They’re the easiest to start with and work well for most sellers. They can be used to promote an individual product.
Sponsored Product ads show up at the top of search results, in between organic listings, and on competing product pages.
Sponsored Brands
Sponsored Brand Ads (formerly known as “Headline Search Ads”) rank as the second most popular PPC ad format, with roughly 38% of sellers using them. They show at the top of search results or as short videos further down the page with your logo, a custom headline, and up to three products. When clicked on, customers will either be directed to a custom landing page or your brand’s Amazon storefront. It is only available to brand-registered sellers or Vendors.
According to Amazon, Sponsored Brands are the most effective advertising tool on their platform, especially video formats. Sellers using video ads have witnessed a remarkable 108.1% boost in click-through rates when compared to those just using the standard Sponsored Brand ads.
Sponsored Display
Sponsored Display Ads are a bit different from Sponsored Products and Sponsored Brands ads. While they do appear on Amazon, they are also featured on affiliate sites such as Google, Facebook, Netflix, and various mobile apps.
These ads are mainly used for retargeting. They remind potential customers of products they’ve viewed but have not yet purchased. Only brand-registered sellers and Vendors can use them.
The main difference between Display and other ads is how you target customers. Instead of targeting keywords or competing ASINs, these ads focus on customer interests, shopping behavior, and whether someone has visited your product page before.
Sponsored TV
Sponsored TV ads are the newest type of ad Amazon offers. They’re designed to help brands reach viewers on streaming services like Prime Video, Freevee, Twitch, and other Fire TV apps. These are not clickable ads like the ones in search results; instead, they’re short video commercials that appear during shows, movies, or live streams. They help build brand awareness.
You don’t need a massive budget to get started. Sponsored TV is available to sellers enrolled in Amazon Brand Registry and Vendors. You can run these ads with the same self-service tools used for other ad types.
Sponsored TV uses the Cost per Mile (CPM) pricing model. This means that advertisers pay per thousand impressions, as opposed to the Pay-Per-Click (PPC) model, where advertisers are charged every time a customer clicks on their ad.
Tips for Running Effective Ads
Amazon ads can bring great results, but you still need to manage them well. Here are some tips:
Focus on the Right Keywords
The success of your ad often depends on which keywords you target. Think like your customer-what would they type into the search bar to find your product? Use a mix of broad and long-tail keywords. Long-tail keywords may have lower search volume, but they’re often cheaper and lead to higher conversions because they’re more specific.
Also, make sure to use negative keywords. These are search terms you don’t want your ad to show up for. They help cut down wasted ad spend and make your campaigns more efficient.
Set a Realistic Daily Budget
Budget control is key when you’re starting out. Decide how much you’re willing to spend per day, and stick to it. For new sellers, $10–$20 per day is a good starting point. This gives you enough data to see what’s working without blowing through your funds too fast.
You can always adjust based on results. Once you find what’s performing well, you can increase your budget on winning campaigns and reduce or pause the ones that aren’t converting.
Pick a Smart Bidding Approach
Your bid is how much you’re willing to pay when someone clicks your ad. Go too low, and your ad might not show up. Go too high, and you could end up overpaying for traffic that doesn’t convert.
Amazon offers a few bidding options:
– Dynamic Bids – Down Only: Amazon lowers your bid when it’s less likely to convert.
– Dynamic Bids – Up and Down: Amazon adjusts your bid in both directions depending on how likely a click is to turn into a sale.
– Fixed Bids: Your bid stays the same, no matter what.
For most new sellers, “Down Only” is a safe place to start because it helps control costs. Over time, test different strategies to see which gives you the best return.
Keep an Eye on the Right Numbers
If you want to know whether your ads for Amazon are working, you have to track the right data. Some of the most important metrics to monitor in your Amazon ads dashboard are:
– Impressions – How many times your ad showed up
– Clicks – How many people clicked on your ad
– CTR (Click-Through Rate) – Clicks divided by impressions; a good CTR usually means your ad is relevant
– CPC (Cost Per Click) – What you’re paying each time someone clicks
– Conversions/Sales – How many purchases came from your ad
– ACOS (Advertising Cost of Sales) – Your ad spend divided by sales; lower is better, especially if you’re aiming for profit.
Improve Campaigns Using Real Data
Don’t just launch your Amazon ad campaign and not track it. Go into your reports regularly to see what’s actually driving results. If certain keywords are performing well, increase your bids or add more related terms. If some aren’t converting, pause them or set them as negative keywords.
You can also split test (A/B test) by running different ads for the same product. Try different images, headlines, or targeting methods to see what performs better.
Final Thoughts
Advertising on Amazon isn’t complicated, but it does take strategy and regular attention. Start with Sponsored Products, test small budgets, and let Amazon’s data guide you.
If you want expert help with setting up and managing your ads, Enso Brand is here to make the process easier. We’re a full-service Amazon agency that handles everything from keyword research to ad optimization. Get in touch with Enso Brand today.
