Advertising is how most new products on Amazon get their first sales, reviews and ranking. It can also drain your margin quickly if you do not understand what you are paying for. This guide explains the Amazon PPC basics in plain terms: the campaign types, how keywords and match types work, how to read ACoS, and a simple routine for managing campaigns week by week.
How Amazon PPC works
PPC stands for pay-per-click. You choose keywords or products to target and set a bid, which is the most you are willing to pay for a click. When a shopper searches, Amazon runs an auction among advertisers and decides which ads to show, taking into account bids and how relevant each ad is. You are charged only when someone clicks, not when the ad is shown.
Relevance matters. An ad for a product with a strong listing, good reviews and a competitive price tends to convert better, and better conversion makes your advertising more efficient over time.
The main campaign types
- Sponsored Products: ads for individual products that appear in search results and on product pages. This is where most sellers start.
- Sponsored Brands: ads that feature your brand logo, a headline and several products, or a video. These need Brand Registry.
- Sponsored Display: ads that target shoppers based on products they have viewed or interests, on and off Amazon, available to eligible sellers.
Within Sponsored Products you can run automatic campaigns, where Amazon chooses search terms based on your listing, or manual campaigns, where you choose the keywords or products to target.
Keywords, match types and negatives
In manual campaigns, each keyword has a match type that controls which searches can trigger your ad:
- Broad: the widest reach, including related terms, synonyms and words in any order.
- Phrase: the search must contain your phrase, or close variants of it, in order.
- Exact: the search must match your keyword, or very close variants of it.
Negative keywords work the other way: they stop your ad showing for searches that waste money. If you sell leather wallets and keep paying for clicks on “wallet pattern” or “cheap wallet”, adding those as negatives protects your budget.
The search term report is the most useful tool you have. It shows what shoppers actually typed before clicking your ad, so you can promote converting terms and block the rest.
Understanding ACoS and Amazon PPC basics for profit
ACoS, or advertising cost of sales, is ad spend divided by the sales those ads generated, shown as a percentage. A lower ACoS means each unit of ad spend brought in more sales.
The figure that matters most is your break-even ACoS, which is your profit margin before advertising. As a simple illustration, if a product leaves you a 30 per cent margin after product cost, freight and Amazon fees, an ACoS of 30 per cent means advertising takes all of that profit. Below it you are profitable on ad sales; above it you are paying to sell.
Two related measures are worth knowing:
- ROAS: return on ad spend, which is the inverse of ACoS (ad sales divided by ad spend).
- TACoS: total advertising cost of sales, which compares ad spend with all your sales, including organic ones. A falling TACoS often means your organic ranking is improving.
During a launch, many sellers accept a higher ACoS for a period to gain sales history and reviews. Decide in advance how long and how much you are willing to invest, rather than letting it drift.
A simple launch structure
- Start an automatic Sponsored Products campaign with a modest daily budget to discover search terms.
- Run a manual campaign with your main researched keywords on exact and phrase match.
- After a week or two, review the search term report. Move converting terms into the manual campaign and add irrelevant terms as negatives.
- Adjust bids based on results: raise them on profitable terms that are not getting enough impressions, lower them on terms with clicks but no sales.
- Add Sponsored Brands once you have Brand Registry and more than one product.
A weekly routine and common mistakes
Set a fixed time each week to review spend, sales, ACoS and the search term report. Typical mistakes include:
- Advertising a weak listing. Fix images, title and price first.
- Never adding negative keywords.
- Changing bids every day before there is enough data.
- Running out of stock while ads are running, which wastes momentum.
- Judging success on ACoS alone without looking at total sales and profit.
Our Amazon services include campaign setup and regular reviews, alongside wider business services for sellers. Contact us or email info@prosvogue.com.
Frequently asked questions
What is a good ACoS on Amazon?
There is no single good figure. Compare your ACoS with your break-even ACoS, which depends on your product’s margin, and with your goals, such as launching or maximising profit.
Should I start with automatic or manual campaigns?
Most sellers run both. Automatic campaigns help discover search terms, while manual campaigns give you control over bids on keywords you already know convert.
How much budget do I need for Amazon PPC?
It depends on your category, competition and goals. Start with a budget you can sustain for several weeks, then scale up what proves profitable.
Key topics: Amazon PPC basics · Amazon PPC · Amazon advertising · ACoS · Sponsored Products · keyword research
