For brands that sell on Amazon, visibility is often the difference between a product that sells and one that doesn't. With millions of listings across every category, standing out requires more than a good product and competitive pricing.

Amazon Advertising is one of the tools available to increase that visibility. It provides sellers and vendors with a way to promote their products directly on Amazon's platform, where customers are already in the buying mindset.

This article explains what Amazon Advertising is, how it works, and how it fits into the broader digital advertising space. It also outlines the types of ads available and how businesses implement advertising campaigns on Amazon.

What is Amazon Advertising

Amazon Advertising is an online advertising platform that helps sellers, vendors, and brands promote their products on Amazon's website and apps. It uses a pay-per-click (PPC) model, which means advertisers only pay when someone clicks on their ad.

The platform started in 2012 as Amazon Marketing Services (AMS) and has grown into a complete advertising system. Today, it includes several ad formats like Sponsored Products, Sponsored Brands, and Display Ads that appear throughout Amazon.

When you use Amazon Advertising, you bid on keywords related to your products. When shoppers search for those keywords, your ads might show up in search results or on product pages. Your ad's position depends on your bid amount and how relevant your ad is to the search.

Amazon ranks third in U.S. digital ad revenue behind Google and Meta. Its advertising business generates billions in revenue annually, showing its importance in online retail advertising.

Unlike Google or Facebook ads, Amazon Advertising targets people based on their shopping behavior rather than browsing habits. This means ads appear when customers are actively looking for products, making them more likely to buy.

Why Amazon Advertising matters for businesses

Amazon Advertising connects businesses with customers at the moment they're ready to shop. This timing is valuable because it can lead to more sales than advertising to people who aren't in a shopping mindset.

When people visit Amazon, they often plan to buy something. This "purchase intent" means ads reach users who are already considering making a purchase, which can result in better conversion rates.

One big advantage of Amazon's platform is its closed-loop system. This means Amazon can track the entire customer journey from seeing an ad to buying a product, all within its own website and apps.

![Amazon Advertising Dashboard showing metrics like impressions, clicks, and sales]

With millions of products on Amazon, ads help your items appear in key spots like search results and product pages. This visibility increases the chances that shoppers will discover your products.

Amazon gives advertisers detailed data about how their ads perform. You can see metrics like how many people saw your ad, how many clicked on it, and how many made a purchase after clicking.

Key Benefits

• High purchase intent: Amazon users are typically looking to buy, not just browse, which means better chances for sales.

• Complete tracking: Amazon shows you exactly how ads lead to sales within its platform.

• Better visibility: Ads place your products where shoppers are more likely to see them.

• Actionable data: The reporting tools help you understand what's working and what isn't.

Comparison with Other Ad Platforms

Understanding different Amazon ad formats

Amazon offers three main types of ads that help sellers reach customers in different ways. Each type works on a pay-per-click model, meaning you only pay when someone clicks your ad.

Sponsored Products

Sponsored Products are ads for individual items that show up in Amazon search results and on product pages. They look almost exactly like regular product listings except for a small "Sponsored" label.

These ads work by matching your keywords with what shoppers search for. When someone searches for "wireless headphones" and you've bid on that keyword, your headphone product might appear at the top of the results.

Sponsored Products work well for:

• New product launches

• Boosting visibility for bestsellers

• Clearing excess inventory

The cost for these ads varies by category and competition, but typically ranges from $0.20 to $2.50 per click.

Sponsored Brands

Sponsored Brands are more visual ads that include your logo, a custom headline, and up to three products. They usually appear at the top of search results, making them very noticeable.

These ads help shoppers discover your brand rather than just a single product. When clicked, they can take shoppers to your Amazon Store (a multi-page brand showcase) or to selected product pages.

Sponsored Brands now include video options that play automatically (without sound) in search results. These videos can showcase product features or demonstrate how products work.

Costs for Sponsored Brands start around $0.50 per click but can be higher depending on your category and competition.

Sponsored Display

Sponsored Display ads reach shoppers both on and off Amazon. Unlike the other ad types, these don't rely on keywords. Instead, they target shoppers based on their browsing behavior.

These ads appear on:

• Product detail pages

• Customer review pages

• The Amazon homepage

• Third-party websites and apps

Sponsored Display is useful for:

• Retargeting people who viewed your products but didn't buy

• Reaching shoppers who bought similar products

• Building awareness beyond Amazon search

These ads typically start at around $0.30 per click but vary based on placement and audience targeting.

How to launch an Amazon advertising campaign

Starting an Amazon advertising campaign involves several key steps. Each step builds on the previous one to create an effective campaign that reaches the right shoppers.

1. Define your goals

Before creating any ads, decide what you want to achieve. Clear goals help you choose the right ad type and measure success.

Common advertising goals include:

• Increasing sales for specific products

• Improving visibility for new items

• Building awareness for your brand

For example, if you want to boost sales for an existing product, Sponsored Products might work best. If you're launching a new brand, Sponsored Brands could be more effective.

Your goals also determine which metrics matter most. For sales goals, you'll focus on conversion rates and return on ad spend. For visibility goals, impressions and clicks become more important.

2. Set up your Amazon campaign structure

Amazon's ad platform organizes your advertising into campaigns, ad groups, and ads. This structure helps you manage your advertising efficiently.

A campaign contains your budget, timeline, and targeting options. Within each campaign, ad groups organize related products or keywords. Each ad group contains the actual ads that will display on Amazon.

When setting up campaigns, use clear naming patterns like "Kitchen Gadgets - Sponsored Products - Summer 2024" to keep everything organized.

In the Amazon Ads Console, you'll set your daily budget (how much you're willing to spend each day) and campaign duration (when ads will start and stop running).

3. Choose targeting and keywords

The right keywords connect your ads with shoppers looking for products like yours. Amazon offers several ways to find effective keywords.

To research keywords:

• Use Amazon's search bar to see what auto-completes when you type

• Look at competitor listings for relevant terms

• Check Amazon's keyword suggestions in the ad creation tool

Amazon offers three keyword match types:

• Broad match: Reaches the most shoppers but includes variations of your keyword

• Phrase match: Shows ads when the keyword phrase appears in the search

• Exact match: Only shows ads for searches that match your keyword exactly

Starting with a mix of match types helps you discover which keywords perform best for your products.

4. Adjust bids and budgets

In Amazon's advertising system, you set how much you're willing to pay when someone clicks your ad. This is your bid, and it affects where and how often your ad appears.

Starting bid recommendations:

• Low-competition products: $0.20–$0.50 per click

• Medium-competition products: $0.50–$1.50 per click

• High-competition products: $1.50+ per click

Your daily budget controls your total spending. For new campaigns, budgets often start between $10–$50 per day depending on your product price and competition level.

Amazon also offers bidding options that automatically adjust your bids based on the likelihood of conversion:

• "Down only" lowers bids when conversion seems less likely

• "Up and down" raises or lowers bids based on conversion probability

• "Fixed" keeps your bid the same regardless of context

5. Monitor performance

Once your campaign is running, check its performance regularly to see what's working and what needs adjustment.

Key metrics to track:

• Impressions: How many times your ad was shown

• Clicks: How many times shoppers clicked your ad

• Click-through rate (CTR): Percentage of impressions that resulted in clicks

• Advertising cost of sales (ACoS): Ad spend divided by sales

• Return on ad spend (ROAS): Sales divided by ad spend

The Amazon Ads Console provides reports that show these metrics. Review them weekly to identify trends and make improvements to your Amazon ad campaign.

Effective strategies for advertising on Amazon

1. Optimize your product listings

Your product listing quality directly affects how well your ads perform. When shoppers click an ad and arrive at a clear, detailed listing, they're more likely to purchase.

Key elements to optimize:

• Product title: Include your brand, key features, and main keywords in a natural way

• Bullet points: List the most important benefits and specifications clearly

• Description: Provide complete information about uses, features, and dimensions

• Images: Use high-quality photos showing the product from multiple angles

Amazon uses information from your listing to match your ads with relevant searches. A well-optimized listing improves this matching and helps convert ad clicks into sales.

2. Use negative keywords

Negative keywords prevent your ads from appearing in irrelevant searches. This saves money and improves your targeting.

For example, if you sell premium leather wallets, you might add negative keywords like:

• "cheap" (to avoid bargain hunters)

• "women's" (if you only sell men's wallets)

• "how to make" (to avoid DIY searchers)

To find negative keywords, review the Search Term Report in your Amazon Ads account. Look for terms that received clicks but didn't lead to sales, then add these as negative keywords.

This strategy helps focus your ad spend on searches more likely to convert, improving your return on investment for your Amazon advertising campaign.

3. Adjust campaigns for different product stages

Products at different lifecycle stages need different advertising approaches. Tailoring your campaigns to these stages improves results.

Launch stage:

• Use broader targeting to gather data

• Set higher budgets to gain visibility quickly

• Focus on impressions and clicks rather than efficiency

Growth stage:

• Refine targeting based on early performance data

• Focus on keywords with proven conversion potential

• Begin optimizing for return on ad spend

Maintenance stage:

• Target only the most efficient keywords

• Optimize for profitability rather than growth

• Use more restrictive budgets to maintain efficiency

By matching your advertising strategy to your product's current stage, you can maximize results throughout the product lifecycle.

Next steps to maximize your Amazon advertising potential

Amazon Advertising works best when approached systematically. Success comes from understanding the platform's features and aligning them with your business goals.

The most effective campaigns start with clear objectives, whether increasing sales, launching new products, or building brand awareness. These goals guide decisions about ad formats, targeting, and budget allocation.

Regular monitoring and adjustment are essential. By tracking metrics like click-through rate, advertising cost of sales, and return on ad spend, you can identify what's working and refine your approach accordingly.

Product listings play a crucial role in converting ad clicks to sales. Clear titles, informative bullet points, and high-quality images help shoppers make purchase decisions after clicking your ads.

Different stages of the product lifecycle require different advertising strategies. Launch campaigns focus on visibility, growth campaigns on efficiency, and maintenance campaigns on profitability.

Agencies like Darkroom specialize in managing Amazon Advertising campaigns through data analysis and strategic optimization. They help businesses navigate the platform's complexities and achieve measurable results.

Schedule an introductory call to explore how Darkroom can help your business grow through optimized Amazon Advertising campaigns: https://darkroomagency.com/book-a-call

FAQs about Amazon advertising campaigns

How much does it cost to start advertising on Amazon?

Amazon has no minimum spending requirement, but starting with $10-$20 per day provides enough data to evaluate performance and make improvements.

What performance can I expect from my first Amazon ad campaign?

New campaigns typically need 2-4 weeks to gather meaningful data. Initial performance varies by category, but average click-through rates range from 0.3-0.5% with advertising cost of sales between 20-40%.

How do I integrate Amazon advertising with my broader marketing strategy?

Amazon Advertising works well as the purchase-focused component of a broader strategy. It complements awareness channels like social media by targeting shoppers who are ready to buy.

When should I consider working with an Amazon advertising agency?

Consider agency support when managing multiple product lines, expanding to new marketplaces, or when you need advanced reporting and optimization beyond what you can manage internally.