Beginner Guide to Amazon Ads: What You Need to Know to Get Started

Amazon’s advertising platform operates on a Pay-Per-Click (PPC) model, meaning you only pay when a customer clicks on your ad. This makes it a cost-effective way to manage your ad spend. Advertising costs are essential, as they are determined by the number of clicks your ads receive and the bids you set for those clicks.

Amazon campaigns are organized into ad groups, which help structure different segments within a campaign for better targeting, bid management, and performance tracking.

Here’s what you need to know to run PPC campaigns effectively:

1. Understanding the Key Ad Types on Amazon

Amazon offers a suite of advertising solutions, each designed for different objectives and stages of the customer journey. Each ad type on Amazon—such as Sponsored Products, Sponsored Brands, and Sponsored Display—has unique features, placements, and strategic uses to help sellers reach their goals. Knowing these ad types is fundamental to building an effective Amazon advertising campaign.

• Sponsored Products Ads: These are the most common and often the best starting point for new advertisers. Sponsored Products are a form of product ad, also known as Amazon Sponsored Product Ads. A sponsored product ad appears in prominent placements, including search results on the product detail page and competitors’ detail pages. They are ideal for driving immediate product sales and improving discoverability. You can run Sponsored Products campaigns using either automatic targeting or manual targeting.
• Sponsored Brands Ads (Formerly Headline Search Ads): Available exclusively to brand-registered sellers, these self-service ads are a fantastic way to build brand recognition and drive traffic to your Amazon Store. Sponsored Brands are a type of sponsored brand and are also referred to as sponsored brand ads. Sponsored Brands feature your logo, a custom headline, and up to three multiple products. They appear prominently at the very top of search results pages. You can also run Sponsored Brands campaigns with video ad formats, which are incredibly engaging and can significantly boost brand recall. These are powerful for capturing attention and showcasing your unique brand identity.
• Sponsored Display Ads (Formerly Product Display Ads): These display ads are a type of product ads and allow you to retarget shoppers both on and off Amazon, keeping your products top-of-mind even after they leave the platform. Sponsored Display leverages Amazon’s vast audience data, allowing you to target by specific interests, product category, or even complementary products that customers have viewed or purchased. These are excellent for increasing product consideration, reaching new audiences, and driving repeat purchases. You can also use product targeting with Sponsored Display ads to appear on the product detail pages of specific products or categories, or direct shoppers to a landing page designed to showcase selected products or brand messaging.

2. Setting Up Your Amazon Ads Account

Before launching your first Amazon ads campaigns, you'll need an Amazon Seller Central account (a Professional Selling Plan is required for most ad types). Your brand must be enrolled in Amazon Brand Registry for Sponsored Brands and Sponsored Display ads.

Once your seller account is active, navigate to the "Advertising" tab in Seller Central and select "Campaign Manager." This is where you'll create and manage all your ad campaigns.

3. Crafting Your Keyword Targeting and Product Targeting Strategy

Your targeting strategy is critical for success for sponsored products and, to a lesser extent, sponsored brands.

• Automatic Targeting: This is an excellent starting point for a beginner's guide to Amazon ads. Setting up an automatic campaign allows Amazon’s algorithm to automatically target relevant keywords and products based on your product listing information. By running automatic targeting ads, you can gather valuable performance data and discover new, high-performing search terms you might not have considered. Automatic targeting is beneficial for initial ad campaigns to collect data.
• Manual Campaigns: This gives you greater control over where your Sponsored Products or Brands ads appear. Creating a manual campaign lets you select specific keywords or products to target for more precise ad placements. Within manual campaigns, you’ll use different “match types” for your keywords:
• Broad Match: Your ad will show for searches that include your keyword and closely related variations, including synonyms, misspellings, and even other words in any order. While it offers broad reach, it can also lead to less relevant traffic. Choosing a broad or phrase match balances reach and relevance in your keyword targeting.
• Phrase Match: Your ad will show for searches that include your exact keyword phrase, but other words can appear before or after. This offers more control than broad match while still providing flexibility.
• Exact Match: Your ad will only show for searches that precisely match your keyword or very close variations (e.g., plurals). This offers the most control and often the highest conversion rates because the search intent is obvious. Using exact match keywords helps ensure your ad spend is highly targeted.
• Negative Keywords: This is a crucial element for optimizing your ad spend. Adding negative keywords prevents your Amazon PPC ads from showing for irrelevant searches. For example, if you sell “premium coffee,” you might add “cheap” or “instant” as negative keywords to avoid wasting your budget on customers looking for low-cost or specific types of coffee you don’t offer. Regularly reviewing your Search Term Report for irrelevant terms is vital for effectively using negative keywords. Maintaining a negative keyword list helps ensure your ads do not appear for searches irrelevant to your products.
• Product Targeting Campaigns: Beyond keyword targeting, you can also target specific products or categories. Launching a product targeting campaign is particularly effective for increasing visibility for new products. This is particularly effective for Sponsored Display ads and can also be used for Sponsored Products. With product targeting campaigns, your ad can appear on the detail pages of individual products (e.g., complementary products or competitor products) or within specific product category pages, putting your product directly in front of highly relevant shoppers. Targeting specific product categories helps you structure your campaigns for better performance and ROI.

Consider different bidding strategies at the end of your campaign setup, including using fixed bids for more predictable ad costs.

4. Defining Your Budget and Bidding Strategy

• Daily Budget: Set a daily amount you will spend on your ad campaigns. A starting point of $10-$20 per day per campaign is often recommended for beginners. You can constantly adjust this as you gather data on your campaign performance.
• Bidding Strategy: Amazon offers dynamic bidding options that allow the platform to adjust your bids in real time to optimize for conversions. "Dynamic bids—up and down" is a good option, as Amazon will increase your bid when a sale is more likely and decrease it when it's less likely. "Dynamic bids—down only" is more conservative, only lowering your bid when a sale is less probable. Understanding your advertising cost per sale is key to setting sustainable bids.