Advertising on Amazon is not limited to banner ads or promotions. It includes a performance-based system that works within Amazon's own platform. This system allows sellers to bid on visibility for their products.

In this guide, the focus is on Amazon PPC. This is one of the most widely used advertising tools by brands and sellers on the Amazon marketplace.

The goal is to explain what Amazon PPC is, how it works, and what makes up its basic structure. The information is designed for those who are new to the topic.

What Is Amazon PPC

Amazon PPC stands for Amazon Pay-Per-Click. It's an advertising model where sellers run ads for their products on Amazon and pay only when a shopper clicks on their ad.

These ads appear in Amazon search results, on product detail pages, and in other visible locations across the platform. The goal of the ad is to get shoppers to click and view the promoted product.

The term "pay-per-click" means that the advertiser does not pay for the ad to be shown. They pay only when someone clicks on it. This makes it different from display ads that charge based on views or impressions.

Amazon PPC is part of Amazon's internal advertising system. It's used by sellers, brands, and vendors to drive traffic to their product listings.

Key components of Amazon PPC include:

• Cost Structure: Advertisers are charged only when a user clicks on the ad

• Placement: Ads appear in search results, product pages, and other areas within Amazon

• Targeting: Advertisers can target by keywords, specific products, or audience segments

• Bidding System: Ad placement is determined through an auction where advertisers bid on keywords

Why Amazon Pay Per Click Advertising Matters

Amazon lists millions of products across every category. As more sellers join the platform, it becomes harder for a product to appear on the first page of search results organically.

Amazon PPC advertising creates an opportunity for sellers to place their products in highly visible areas such as the top of search results or on product detail pages.

When shoppers search for something on Amazon, the first results they often see are sponsored. These are PPC ads. Sellers only pay when someone clicks on the ad, not when it's simply shown.

![Image: Example of Amazon PPC ads appearing at the top of search results]

Amazon PPC has four main benefits:

• Increased Visibility: Ads appear where shoppers are already looking for products

• Sales Acceleration: Ads can lead to immediate clicks and purchases

• Brand Awareness: Repeated exposure to ads makes a brand more recognizable

• Data Collection: Ad campaigns generate information about customer search behavior

This table compares organic listings and PPC ads:

Amazon PPC Ads and Key Terminology

To understand Amazon PPC, you need to know some basic terms. These terms describe how the ads work and how to measure their performance.

CPC (Cost Per Click) is the amount you pay when someone clicks your ad. If you spend $10 on ads and get 20 clicks, your average CPC is $0.50.

ACoS (Advertising Cost of Sale) shows how much you spend on ads compared to the sales they generate. It's calculated as: (Ad Spend ÷ Sales) × 100. Lower ACoS means better profitability.

CTR (Click-Through Rate) measures how often people who see your ad end up clicking on it. It's calculated as: (Clicks ÷ Impressions) × 100. Higher CTR suggests your ad is relevant to shoppers.

Impressions count how many times your ad is shown to shoppers, whether they click or not.

Conversion Rate tells you what percentage of people who click your ad make a purchase. It's calculated as: (Number of Sales ÷ Number of Clicks) × 100.

Bid is the maximum amount you're willing to pay for a click on your ad. Higher bids can improve ad placement but cost more per click.

Keywords are the words or phrases that trigger your ads when shoppers search for them on Amazon.

Match Types control how closely a shopper's search must match your keywords to trigger your ad:

• Broad Match: Shows your ad for related terms (example: "running shoes" might show for "athletic footwear")

• Phrase Match: Shows your ad when the search includes your keyword phrase in the same order

• Exact Match: Shows your ad only when the search exactly matches your keyword

Types of Amazon PPC Campaigns

Amazon offers three main types of PPC ads. Each serves a different purpose and works best for specific goals.

Sponsored Products

These are the most common Amazon PPC ads. They show individual products within search results and on product pages.

Sponsored Products look similar to regular product listings but have a small "Sponsored" label. They include the product image, title, price, and reviews.

These ads work well for:

• Promoting specific products

• Launching new items

• Boosting sales of existing products

You can set up Sponsored Products with automatic targeting (Amazon chooses when to show your ads) or manual targeting (you select the keywords).

Sponsored Brands

Formerly called "Headline Search Ads," these appear at the top of search results. They include:

• Your brand logo

• A custom headline

• Multiple products (usually three)

Sponsored Brands help build brand awareness and showcase your product range. When shoppers click, they go to your brand store or a custom landing page.

These ads require enrollment in Amazon Brand Registry and typically cost more per click than Sponsored Products.

Sponsored Display

These ads can appear both on and off Amazon. They target:

• Shoppers who viewed your products but didn't buy

• People browsing similar products

• Audiences with specific interests

Sponsored Display ads can show on product detail pages, the Amazon homepage, and even on external websites.

They help you reach customers at different stages of their shopping journey and remind them about products they've shown interest in.

Creating an Amazon PPC Campaign

Setting up an Amazon PPC campaign involves several key decisions. The process is straightforward once you understand the basics.

Setting Budget and Bids

Your daily budget controls how much you spend on ads each day. For beginners, starting with $10-$20 per day is reasonable for testing.

Your bid is the maximum amount you'll pay when someone clicks your ad. Amazon suggests bid amounts based on competition, but you can adjust them.

For new campaigns, consider:

• Setting a budget you're comfortable testing with

• Starting with Amazon's suggested bids

• Monitoring daily to make sure you're not overspending

Automatic vs. Manual Targeting

Amazon offers two main targeting approaches:

Automatic targeting lets Amazon decide when to show your ads based on your product information. It's great for beginners because:

• It requires minimal setup

• It helps you discover which search terms work

• Amazon's algorithm matches your product to relevant searches

Manual targeting gives you control over exactly which keywords trigger your ads. With this approach:

• You choose specific keywords to bid on

• You can set different bids for different keywords

• You have more control over when and where your ads appear

Many sellers start with automatic targeting to gather data, then create manual campaigns using the best-performing search terms.

Using Negative Keywords

Negative keywords prevent your ads from showing for certain searches. They help you avoid wasting money on irrelevant clicks.

For example, if you sell premium coffee makers, you might add "cheap" as a negative keyword to avoid showing your ads to bargain hunters.

To find negative keywords:

1. Review your search term reports

2. Look for terms that get clicks but no sales

3. Add these as negative keywords to improve your campaign efficiency

How To Optimize Amazon PPC

Optimization is the process of improving your campaigns over time. It helps you lower costs and increase sales.

Analyzing Search Term Reports

Search term reports show exactly what customers typed to find your ads. These reports help you:

• Discover new keywords to target

• Identify terms that waste your budget

• Understand what shoppers are looking for

Amazon makes these reports available in Seller Central. Review them weekly to find opportunities for improvement.

Adjusting Bids and Budgets

Not all keywords perform equally. After collecting data, you can:

• Increase bids on keywords that drive sales

• Lower bids on keywords with high costs but few conversions

• Pause keywords that don't perform well

Your budget should go to the campaigns and keywords that generate the best return on investment.

Monitoring Performance Metrics

Track these key metrics to evaluate your campaigns:

• ACoS (Advertising Cost of Sale): Lower is generally better, but the "good" range depends on your profit margins

• Conversion Rate: Higher means your ads are reaching the right customers

• CTR (Click-Through Rate): Higher suggests your ads are relevant to searchers

• Impressions: Shows how often your ads are being seen

Compare these metrics over time to see if your optimization efforts are working.

Common Pitfalls in Amazon PPC Advertising

Even experienced sellers make mistakes with Amazon PPC. Here are common pitfalls to avoid:

Setting and forgetting campaigns leads to wasted spending. Campaigns need regular monitoring and adjustments.

Bidding too high eats into profits, while bidding too low limits visibility. Find the balance that works for your products.

Neglecting negative keywords allows your ads to show for irrelevant searches, wasting your budget on clicks that won't convert.

Poor keyword research means missing opportunities to reach interested shoppers. Take time to find the right keywords for your products.

Ignoring search term reports prevents you from learning what's working and what isn't. These reports contain valuable data for optimization.

Unrealistic expectations lead to disappointment. Amazon PPC typically requires time and testing before reaching optimal performance.

Accelerate Your Amazon PPC Growth

Amazon PPC works best with consistent management and data-driven decisions. This includes regular adjustments to bids, keywords, and campaign structure.

Darkroom specializes in managing Amazon pay-per-click advertising with a focus on strategic implementation and ongoing optimization. Our approach includes:

• Comprehensive campaign planning aligned with your business goals

• Regular performance monitoring and adjustments

• Detailed reporting on key metrics like ACoS, CTR, and conversion rates

• Expert management of campaign structure and bidding strategies

To learn more about how Darkroom can help improve your Amazon PPC results, schedule a call with our team.

Frequently Asked Questions About Amazon PPC

What does PPC stand for in Amazon advertising?

PPC stands for Pay-Per-Click. It's an advertising model where you pay only when someone clicks on your ad, not when the ad is simply displayed.

How much does Amazon PPC advertising cost?

Amazon PPC costs vary by product category and competition. You can start with a daily budget as low as $10, with individual clicks typically costing between $0.10 and $3.00 depending on your industry.

Is Amazon PPC worth it for small sellers?

Yes, Amazon PPC can be effective for sellers of all sizes. Small sellers can run targeted campaigns focusing on specific keywords and products to maximize their advertising budget.

How long does it take to see results from Amazon PPC campaigns?

You'll see traffic data within hours, but meaningful sales patterns typically emerge after 1-2 weeks of running a campaign. This data helps guide optimization decisions.

Can I run Amazon PPC campaigns without professional help?

Yes, Amazon provides tools within Seller Central that make it possible to create and manage your own PPC campaigns. Many sellers start this way before considering professional management.

How do I know if my Amazon PPC campaigns are successful?

Successful campaigns typically show a positive return on ad spend (sales exceeding ad costs), improving ACoS over time, and increasing organic ranking for your products.