Amazon PPC is Amazon's pay-per-click advertising system, where sellers bid for placement in search results and on product pages and pay only when somebody clicks. It runs as an auction, though the highest bid does not automatically win. Amazon also weighs how relevant your product is to the search and how likely it is to convert, because a click that leads nowhere earns Amazon nothing on the sale.
The practical effect is that a competitor with a better-converting listing can hold a position you are bidding more for. Ad performance and listing quality are the same problem.
The three ad types
| Type |
Where it appears |
What it is good for |
| Sponsored Products |
In search results and on product detail pages, formatted like an organic listing |
The workhorse. Direct response, easiest to attribute, where most budgets sit |
| Sponsored Brands |
Banner placements at the top of search, carrying your logo and several products |
Visibility across a range rather than one product. Needs Brand Registry |
| Sponsored Display |
On competitor product pages and off Amazon entirely |
Reaching shoppers already looking at something similar, plus retargeting |
Sponsored Display on competitor pages is the one worth understanding properly. It puts your product in front of somebody who is already deep in a purchase decision for a rival product, which is a different kind of buying moment than a search result.
Automatic and manual targeting
Automatic campaigns let Amazon decide which searches your ads appear against, based on what it reads from your listing. Manual campaigns put you in control of specific keywords or specific competitor products.
The standard approach runs both, with different jobs. Automatic campaigns surface search terms you would not have guessed, and the useful ones get promoted into manual campaigns where you control the bid. The terms that spend without converting become negative keywords, which is the part that stops budget leaking into searches that were never going to sell anything.
The numbers that actually matter
ACoS is ad spend as a percentage of the sales those ads generated. It tells you whether a campaign is efficient in isolation. TACoS is ad spend as a percentage of total sales, organic included, and it answers a harder question: whether advertising is growing the business or just taking credit for sales that would have happened anyway.
A campaign can post an excellent ACoS while TACoS climbs, which usually means the ads are harvesting demand rather than creating it. Our guide to setting ACoS and TACoS targets works through where each number should sit.
Worth noting that PPC and organic ranking feed each other. Ad-driven sales contribute to a listing's sales velocity, which influences where it ranks organically, which is part of why a launch period often runs at an ACoS nobody would accept as a steady state.
What brands get wrong with Amazon PPC
- Advertising a listing that is not ready. Traffic sent to a page with weak images, thin content or no reviews converts badly, which costs money twice: the wasted spend, and the poor conversion data feeding back into the auction.
- Ignoring the search term report. The report showing what people actually typed is where negative keywords come from. Campaigns left unmined pay repeatedly for searches that never convert.
- Optimising ACoS while TACoS rises. Efficiency on the campaign report can coexist with advertising quietly cannibalising organic sales.
- Reusing one structure across every marketplace. Auction density and search behaviour differ by country, and a campaign built for the US rarely transfers cleanly to a smaller European marketplace.
FAQ
Does the highest bid win on Amazon PPC?
No. The auction weighs relevance and expected conversion alongside the bid, so a well-converting listing can hold placement over a higher bidder. Improving the listing improves ad performance.
What is the difference between ACoS and TACoS?
ACoS measures ad spend against the sales those specific ads produced. TACoS measures it against total sales including organic, which shows whether advertising is adding growth or capturing demand that already existed.
Should I run automatic or manual campaigns?
Usually both. Automatic campaigns discover search terms you would not have thought of, and the ones that convert get moved into manual campaigns where you set the bids directly.
Running PPC across multiple marketplaces, each with its own auction and search behaviour, is part of how eBrands operates Amazon for the brands we manage. See how we run Amazon end to end.
