Amazon PPC (pay-per-click) is Amazon's auction-based ad system. Sellers bid on keywords, and their products appear in Amazon search results and on product detail pages. You pay only when a shopper clicks — never for the impression.
The four ad types: Sponsored Products, Sponsored Brands, Sponsored Display, and Amazon DSP.
The metric that decides everything: ACoS — ad spend divided by ad revenue.
Where campaigns are built: Seller Central or Vendor Central → Advertising → Campaign Manager.
If you recently mistook “pay-per-click” advertising for “paperclip” advertising, then you’re likely unfamiliar with Amazon PPC. If you find yourself asking, “what is PPC on Amazon?” let’s quickly dive into the basics, explore the true Amazon PPC meaning, and touch on Amazon PPC Optimization: Amazon PPC Advertising, which encompasses Amazon paid search and sponsored ad placements, is also simply referred to as “Amazon PPC” or “Amazon Pay-Per-Click”.
You might even be intimidated by the million abbreviations that accompany PPC, like CPC/CPM, ACOS, NTB, and CVR, but don’t fret! The Badger is here to help you kick ROAS with your Amazon Advertising.
In this article, Ad Badger will talk about:
What is Amazon PPC or ‘PPC on Amazon’?
Amazon PPC (Pay-Per-Click) is an auction-based advertising system where sellers bid on keywords to show ads on Amazon search results. Advertisers pay only when a shopper clicks the ad.
Consequently, when an Amazon customer searches for a product, the sellers who have placed the highest bids on relevant keywords win the auction. As a result, their product ads are displayed in their chosen placement.
Importantly, advertisers only incur costs at the bid price if their Amazon ad is clicked—thus the term “pay-per-click.
Since Amazon PPC campaigns are auctions, you will only ever have to pay one cent more than your competitor for the ad placement in the search results.
That is if you bid $3 for a keyword, but your competitor only bid $1, Amazon would only charge you $1.01 for the ad placement.
But, remember, Amazon sellers only pay when their ad gets clicked, not every time it appears in the search.
How Does Amazon PPC Work?
Paid traffic has an interesting history.
It’s been around since 2000 and it is both a science and an art for many online businesses. It all started with Google AdWords, now called Google Ads. If you’ve done a Google search in the past 20 years, chances are you’ve seen some ads in your search results.
In 2012, Amazon introduced PPC Ads, thereby enabling Amazon vendors, sellers, authors, and even Merchandisers to gain additional visibility for their products on Amazon’s site. This development marked a significant turning point, as it offered a new avenue for enhancing product exposure on the platform.
While Amazon Ads and Google Ads have different missions in life, they are close cousins.
Amazon aims to show customers ads they are most likely to purchase, while Google strives to present searchers with ads they are most likely to click.
Amazon bases its ad rank on a variety of factors, like CPC, Conversion Rate, Revenue Per Click, Star Rating, and other related factors. Whereas Google bases its ad rank on CTR and CPC, often referred together as “Quality Score”. At the time of this writing, Amazon likely has a similar quality score feature, but has not detailed it explicitly.
If you’re interested, read more about the similarities and differences of Google Ads and Amazon Ads.
Is Amazon PPC Marketing Worth It?
Yes, Amazon PPC is totally worth it and it’s the number one way to increase traffic to your product.
This one of the most common questions we see on Amazon PPC forums. Here’s what our CEO said in an interview with Seller’s Choice:
One of my fundamental beliefs about paid traffic is that good paid traffic is good paid traffic no matter what.
What’s special about Amazon is they already have the visitors. Why would you start with an off-Amazon site to try to generating traffic there when Amazon is where the customers are already hanging out?
Additionally, Amazon visitors are ready to purchase when visiting the eCommerce site. Amazon has over 2.3 billion visitors each month.
All you have to do is get their attention.
The crazy thing is that advertisers are just now realizing the power of Amazon Advertising. Here’s what Kiri Masters of Bobsled Marketing said in a previous post for us:
Brands are finally realizing the importance of PPC on Amazon. Many are shifting budget to this platform in favor of other PPC platforms like Facebook and Google.
Still not convinced? Check out this video on the importance of Amazon ads:
How Much Does Amazon PPC Cost?
There is no flat fee for Amazon PPC. You bid in an auction and pay only when someone clicks. What you actually pay depends on your category, your competition, and how tightly your campaigns are managed.
Here is what it costs right now, based on Ad Badger's own app data across thousands of live campaigns (January–August 2026):
| Metric | Platform average |
|---|---|
| Average CPC | $1.22 |
| Average ACoS | 30.67% |
| Conversion rate | 11.72% |
| Click-through rate | 0.58% |
Average CPC is up $0.10 year over year.
The platform average hides how wide the spread is. Books run a $0.38 CPC at a 19% ACoS. Clothing runs $0.72 CPC at a 42% ACoS — nearly double the cost to advertise for the same sale. Before you judge your own numbers against an average, find your category.
The number that decides whether any of this is affordable is your break-even ACoS — the point where an ad-driven sale stops making you money. Work that out first, then treat every campaign target as a percentage of it.
Beyond ad spend, there is the cost of managing it. You can do it manually, run PPC software priced as a flat monthly fee by ad spend, or hand it to a managed service at $975/month plus 8% of managed ad spend.
Amazon SEO Sales vs. Amazon PPC Sales
Like any search engine marketing, Amazon has organic search sales and paid search sales.
Organic sales on Amazon happen when a customer discovers and purchases your product without you sponsoring that product for better placement on Amazon’s search results. To optimize your organic sales, you want to focus on Amazon Search Engine Optimization (SEO).
Paid search sales, also known as Amazon PPC, occur when a customer finds your product through an advertisement in their search results.
Sponsoring your products with Amazon Ads is the fastest way to get your product to the top of Amazon’s Search Results Page (SERP) to generate more traffic. PPC campaigns are complicated so you might want to read more.
Here’s a full post on organic vs paid traffic on Amazon.
Typically, Amazon PPC ads make up about 30% of Amazon seller’s total sales. If organic sales are $1k/ day, they should expect $100-300/ day in Amazon PPC sales. Conversely, if someone has $1k/ day in PPC sales, they receive $3k-10k/ day in organic sales.
To go deeper, Michael sat down with paid specialist from Quiverr to discuss the ratio of organic traffic to paid traffic.
Seller Central vs. Vendor Central
There are two selling platforms for Amazon sellers: Seller Central and Vendor Central.
Seller Central is for third-party sellers. Think of third-party sellers as small business owners who sell their products directly to customers on Amazon’s website. These sellers may choose to personally ship products to their customers or let Amazon fulfill their shipping method, earning their product the Amazon Prime badge.
Vendor Central is for first-party sellers, usually larger businesses that sell directly to Amazon, and then Amazon sells to its customers. Because vendors are selling directly to Amazon, their product automatically receives the Fulfilled by Amazon (FBA) Prime Badge.
How to Structure Amazon PPC Campaigns
Campaign structure is what makes your data readable. If one campaign holds forty products, you cannot tell which product is profitable — you only see a blended number that hides both your winners and your losers.
One campaign per product or tight product group
Products that share the same keywords and the same margin can share a campaign. Products that don't, can't. A $12 phone case and a $90 charging dock have different break-even points, so they need different bids — and they cannot share a budget without one starving the other.
One match type per ad group
Exact, phrase, and broad match types behave differently and deserve different bids. Splitting them means you can pay more for the tightly-matched traffic that converts and less for the loose traffic that doesn't.
Separate discovery from harvesting
Automatic campaigns and broad match are where you find new search terms. Once a term proves it converts, move it into an exact match campaign with its own bid — then add it as a negative in the discovery campaign so you stop paying twice for the same click. Our complete guide to negative keywords covers how to do this without cutting off traffic you still want, and the N-Gram Analysis Tool will surface the losing patterns hiding inside your search term report.
Use a naming convention you can filter
Something like SKU | Campaign Type | Match Type means you can sort a 200-campaign account in seconds instead of reading every name. Pick one before you launch, because renaming campaigns later breaks your reporting history.
For a structure built to run long-term rather than be rebuilt every quarter, see our Evergreen Campaign Strategy Guide.
Automatic vs. Manual Amazon Campaigns
When you create a campaign in Campaign Manager, Amazon asks you to pick automatic or manual targeting. The short answer: run both, in that order. Automatic campaigns find the search terms that convert. Manual campaigns let you take control of them.
The standard sequence: launch an automatic campaign, let it run one to two weeks, then pull your search term report. Move every term that converted into a manual exact-match campaign where you control the bid, and add it as a negative exact in the automatic campaign so the two don’t compete for the same click. Everything that spent without converting becomes a negative keyword. That loop — harvest, promote, negate — is the core of Amazon PPC management, and it’s what most sellers stop doing after month two.
Automate your Amazon Ads like a pro.
Meet an Amazon Advertising software that’s so powerful it takes the guesswork out of your advertising needs.
Our software automates keyword harvesting and moves top-converting keywords from automatic campaigns to manual campaigns. Wow.
The 5 Amazon PPC Ad Types
Amazon gives you four advertising formats, and they are not interchangeable. Three are keyword- or product-targeted “Sponsored” ads billed per click. The fourth, Amazon DSP, is programmatic and audience-targeted. Here is what each one does and where it shows up.
Amazon Sponsored Brands Ads
Also known as “headline search ads,” sponsored brand ads are primarily for top-of-the-funnel customers, giving your product the opportunity to grab a customer’s attention before they precisely know what they want.
Sponsored Brand ads appear in the following locations on desktop devices:
- Above search results, hence the “headline search” nickname
- To the left of search results
- Below search results
Their ability to showcase multiple products allows you to advertise complementary products side-by-side.
Sponsored Brand Ads are great for grabbing shoppers’ attention in several places.
Moreover, there are also a variety of different formats within this ad type, including Sponsored Brands Video for extra eye-catching power.
Amazon Sponsored Display Ads
Amazon Sponsored Display Ads are great for boosting your impressions, capturing upper-funnel interest, and retargeting interested customers to close sales.
Where Amazon Sponsored Display Ads appear:
- Product Detail Pages on Desktop and Mobile
- Customer Review Pages
- Top of the Offer Listing Pages
Sponsored Display possesses the unique ability to retarget shoppers who have recently viewed your Amazon product pages, browsed your competitor’s product pages, or used search terms relevant to your listing.
The unique advantage Sponsored Display Ads have is that they can be displayed both on and off Amazon, therefore increasing re-targeting opportunities.
Sponsored Display is great when you want to boost impressions, steal conversions from competitors, or help new product launches get off the ground.
Amazon Sponsored Product Ads
Sponsored Products ads appear in three places, and Amazon lets you set a separate bid adjustment for each one:
- Top of Search — the first row of results on page one. Highest visibility, highest conversion rate, and the most expensive to win.
- Rest of Search — every other position on the search results pages.
- Product pages — product detail pages and other non-search placements.
Because you can adjust your bid by up to 900% per placement, Top of Search is where most sellers either make their margin or quietly lose it. Pull your placement report before you touch these numbers.
Sponsored Product Ads promote your products on product details pages and search results.
In recent years, companies have significantly ramped up their spending on Sponsored Product ads, driven by its remarkable ability to attract consumers and convert interest into purchases.
Like other Amazon PPC advertising options, Amazon only charges you for your Sponsored Product Ads when a shopper clicks on them. This feature provides your business control over advertising budget and bids for keywords.
Sponsored Product Ads appear in the following locations:
- Within search results
- On the right side of search results
- On the bottom of search results
- On product detail pages
The Sponsored Product Ad type is by far the most popular on Amazon PPC and appears in every step of the customer journey.
This is the best Amazon ad type for beginners, and it should make up the majority of your Amazon Advertising budget, even after you expand into Sponsored Brand and Sponsored Display ads.
Amazon DSP (Demand-Side Platform)
How much does Amazon PPC cost?
Amazon PPC has no platform fee, no minimum spend, and no monthly contract. Your entire cost is the clicks you pay for, which means the real question is not “what does Amazon PPC cost” but “what does a click cost in my category, and how many clicks do I need to make a sale.”
Three numbers determine your cost:
- Cost per click (CPC) — what you actually pay per click, set by the auction. Competitive categories with thin differentiation cost more per click than niche ones.
- Conversion rate — how many clicks it takes to produce one order. A listing that converts at 15% needs half the ad spend of one converting at 7.5% for the same revenue.
- ACoS — ad spend divided by ad revenue. This is the number that tells you whether the first two are working.
The cost that actually matters is your break-even ACoS: the point where ad spend eats the entire margin on the sale. Calculate it before you set a single bid.
Break-even ACoS = (sale price − COGS − Amazon fees) ÷ sale price
If you sell at $30, your cost of goods is $10, and Amazon’s referral and fulfillment fees come to $8, your margin is $12 — so your break-even ACoS is 40%. Anything under 40% is profit. Anything over it is buying revenue with your own margin, which is a legitimate strategy for a launch and a slow bleed for an established product.
Two sellers in the same category can pay wildly different amounts for the same sales volume, and the difference is almost never the bid. It’s the conversion rate on the listing the click lands on.
Amazon Sponsored Brands Ads
Sponsored Brands ads appear at the top of search results, within search results, and on product detail pages. Their advantage is real estate: you get your logo, custom headline copy, and up to three products in a single unit, so you can advertise complementary products side by side.
Amazon Sponsored TV Ads
Sponsored TV brings streaming video into the self-service console, so you buy it the same way you buy Sponsored Products — no minimum spend and no insertion order. Ads run across Prime Video, Freevee, Twitch, and Fire TV.
The targeting is what makes it different from the other four. Instead of bidding on keywords, you target by shopping behavior and genre — shoppers who viewed your category, or who bought from a competitor. That makes it a top-of-funnel format: it builds demand that your Sponsored Products campaigns then capture at the bottom.
Judge it accordingly. Measuring Sponsored TV on last-click ACoS alone will make it look like a failure, because the sale it influenced usually closes through a different campaign.
Amazon PPC Keywords & Match Type
When creating an ad campaign, you need to choose the keywords you want to bid on. Keywords can be more than just one word. Then, if a customer’s search term matches your keyword, your ad qualifies to display in front of the customer in the search results.
For every keyword you choose, you will also need to select a match type. Match type refers to the way your keyword matches the user’s actual search on Amazon.
There are three match types:
- Exact Match: Amazon will only show your ads in front of the customer if their search terms are an exact match to your keyword with the exception of plurals and slight misspellings.
- Phrase Match: As long as the customer’s search terms contain your keyword phrase (without being broken up by other words), your ad qualifies.
- Broad Match: The customer’s search terms contain all the words from your keyword in any order.
Keyword research is one of the main pillars of successful advertising campaigns and search ads, so it’s crucial not to neglect keyword research.
That’s a brief overview of keywords and match types. If you want to learn more, check out our complete guide here.
Negative Keywords
If keywords are the search terms where you want to show up, then negative keywords are the terms where you don’t want to show up. (Check out The Complete Guide to Negative Keywords).
Negative keywords help avoid wasting ad spend on irrelevant or unprofitable search queries. Consequently, Amazon’s algorithm will only let your product show for relevant terms, so there’s no need to worry about adding every keyword you can think of as a negative keyword.
Negative keywords have only two match types: phrase and exact. These work in much the same way as phrase match and exact match keyword targeting.
Along with both of these types, there is also a third type of negative: negative ASINs or negative product targeting. Negative product targeting is a form of negative exact that allows you to pick specific ASINs or brand names for which you don’t want your product to appear.
Amazon PPC Bidding Strategies
Amazon gives you three bidding strategies, and the one you pick changes what Amazon is allowed to do with your bid before the auction runs.
Dynamic bids — down only
Amazon lowers your bid when a click looks unlikely to convert, and never raises it. This is the safest setting and the right default for any new campaign, because the worst case is that you underbid and lose an impression — not that you overspend.
Dynamic bids — up and down
Amazon can raise your bid by up to 100% when a click looks likely to convert, and lower it when it doesn't. This wins more high-intent placements, but it can double your CPC without warning. Use it only on campaigns that already have conversion history proving the keyword works.
Fixed bids
Amazon uses your exact bid every time, with no adjustment. That makes it the cleanest way to gather honest data on a brand-new keyword, because nothing is being modified behind the scenes. It is a research setting, not a scaling setting.
Placement modifiers sit on top
Whichever strategy you choose, you can raise bids separately for Top of Search, Product Pages, and Rest of Search. Top of Search usually converts best and costs most. Check your placement report before you raise it, not after — and use the Placement Bid Calculator to work out what the modifier actually does to your effective CPC.
Once you have more keywords than you can review by hand, bid management stops being a weekly task and becomes a daily one. That is the point where automated bid optimization starts paying for itself. We walk through the underlying math in how to calculate your Amazon bid strategy.
Get More Amazon Basics With Our Free Amazon Seller Starter Kit!
Amazon PPC Optimization for Beginners
Now let’s get to the good stuff.
Starting to sell on Amazon is daunting, but not for anyone who has Team Badger in their corner.
Why You Should Start With Sponsored Products
Remember when we said Sponsored Product Ads are the most seen ads on Amazon because they show up at every point in the customer journey?
Use Sponsored Products when starting out to get the best return on ad spend (ROAS).
Sponsored Product Ads appear below Headline Search Ads, to the right of the SERP and on product detail pages. With Sponsored Product Ads, you reach the most customers and reach a high conversion rate (around 10%). In Sponsored Product ad campaigns you can even retarget customers on third-party sites.
Here’s literally everything you need to know about Sponsored Products.
Amazon PPC ACOS (Advertising Cost of Sales)
What Is ACOS?
To understand ACOS on Amazon, start with this video:
What Does ACOS Mean?
ACOS stands for Advertising Cost of Sales. In layman’s terms, it means how much it costs to make sales using Amazon PPC.
What is the ACOS Formula?
ACOS = Total Ad Spend ÷ Total Sales.
What is the Average ACOS?
The average Amazon ACOS we see for Ad Badger users is 30.4%, but keep in mind that’s because they use an Amazon PPC tool to tame their ACOS.
What’s my target ACOS?
Before I answer this question. Figure out your Break-Even ACOS first.
Once you know your Break-Even ACOS decide what Target ACOS you need to earn a profit and which ACOS results in a loss.
How to Lower Amazon ACOS
When you’re given the option to bid on your first campaign, you may not have any idea what to bid. Use the Inch-Up Method when beginning your Sponsored Products Campaign.
What to Do If Your CPC Is Too High
You can simply calculate the perfect PPC bid every time. Yes, there is a formula! Use this foruula to find the perfect bid for your keywords according to your target ACOS.
Amazon Bidding Formula:
Average Order Value x Conversion Rate x Target ACOS = Your target CPC (and therefore your Bid)
We even wrote a post with a free bid calculator included!
Check out this video that goes more in-depth on bidding the perfect amount:
Amazon PPC Strategies for Higher Ad Ranking
We wrote a whole post on this topic, but let’s review.
Amazon’s ad ranking algorithm, or A9, is particularly drawn to ads that boast a history of selling, feature thorough descriptions, and accumulate plenty of reviews.
Amazon uses performance and relevance metrics to determine ad quality.
- Performance Metrics: CTR, Conversion Rate, Overall Sales
- Relevance Metrics: Product Tiles, Description, Search Terms, Seller Name
Amazon isn’t fully transparent about how it ranks ads, but given Amazon was very influenced by Google Ads, we concluded this is the closest to how Amazon determines ad rank.
We always recommend Amazon sellers focus on their product detail page optimization before advertising in order to get the best result. If your detail page isn’t set up correctly, you could get bad reviews for being misleading with your description.
How to Get Reviews on Amazon
The best way to get good reviews on Amazon is to provide a good product, be patient, and be transparent with your product descriptions.
Customers don’t like it when they pay for something they didn’t know they were buying; therefore, we do not support incentivized reviews because it’s against policy, and Amazon will suspend your account and prevent you from selling on their platform.
Here are some ways to fight bad reviews on Amazon.
Choosing Your Amazon PPC Software and Tools
If Amazon PPC seems like an overwhelming amount of manual labor, that’s precisely because it can be. Consequently, many Amazon Advertisers choose to use an Amazon PPC software or tool to save time and money. We compared the ten leading platforms side by side in our guide to the best Amazon PPC tools.
Here’s what to consider when choosing your Amazon PPC software:
- Support
- Minimize Wasted Spend
- Bid Optimization
- Keyword Management
Full disclosure: This article was written by Ad Badger, a consistent leader and maker in Amazon PPC Software. This section of the article contains bias, but it’s bias rooted in millions of campaigns worth of data and decades of research so it’s safe to get our opinion.
Support
When it comes to your ad spend and profit, you want the best support available to answer any questions you may have to give peace of mind, around the clock.
Minimize Wasted Spend
Controlling wasted spend on Amazon ads directly influences your profit and overall ACOS for your campaigns; thus, don’t spend money that you don’t need to. Seek out an Amazon PPC tool that prioritizes reducing wasted spending.
Bid Optimization
The best way to avoid wasted spend is by bidding the perfect amount every time.
This means bidding the perfect dollar amount to ensure you win a keyword and don’t go over your daily budget at the same time. Bidding on Amazon PPC keywords is the hardest and most tedious thing to do. Imagine if you could sit in front of your computer every day and automatically receive bidding based on your conversion rate, cost of good, and Amazon trends.
Find a software that does that for you.
Keyword Management
Keyword research is also essential to great Amazon PPC campaigns. Positive and Negative Keyword automation takes your account to the next level of profit and ad ranking.
Find software that automates keyword research to discover what keywords are most successful for your product, thereby improving your PPC campaigns.
If you wish to compare, check out Ad Badger’s features when deciding on what Amazon PPC software to use.
New: you can now ask these questions in plain English. Connect Claude or ChatGPT to your Amazon Ads with the Ad Badger MCP server — read-only, included on every plan.
Amazon PPC Dominating the PPC Food Chain
That was your crash course on Amazon Advertising. You’re ready now to join us as an apex predator in The Badger Den.
Curious to know what Ad Badger can do for you?
Frequently Asked Questions About Amazon PPC
What is Amazon PPC?
Amazon PPC (pay-per-click) is Amazon's advertising system that lets sellers bid on keywords to place Sponsored Product, Sponsored Brand, Sponsored Display, and DSP ads across Amazon's search results and product pages. You only pay when a shopper clicks your ad.
How much should I budget for Amazon PPC?
There's no universal number — budget depends on your product's price point, margin, and how competitive your keywords are. Most sellers start with a modest daily budget on Sponsored Products, watch ACoS for the first one to two weeks, then scale spend on the keywords and campaigns that convert profitably. For the full method, see our guide to setting and pacing Amazon PPC budgets.
What's a good ACoS for Amazon PPC?
A "good" ACoS depends on your profit margin, not a fixed benchmark — it's the ceiling where ad spend still leaves you profitable after Amazon's referral fees and cost of goods. Many sellers target an ACoS at or below their break-even point, then push lower as campaigns mature.
Should I run automatic or manual Amazon PPC campaigns?
Most sellers do best running both. Automatic campaigns are the fastest way to discover which search terms actually convert, and that data becomes the seed list for manual campaigns, where you control bids and match types precisely.
Should I manage Amazon PPC myself, use software, or hire an agency?
DIY works if you have the time to check campaigns daily and a small catalog. As spend and SKU count grow, most sellers move to PPC optimization software (or an agency) to handle bid adjustments, negative keyword mining, and budget pacing at a scale manual management can't keep up with.
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