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How to Get Started with Amazon Sponsored Product PPC Ads – 2025 Guide

Amazon is getting more competitive every day. Read to the end for next-level PPC advertising tips to help you to dominate your niche!

  • November 6, 2025
  • /
  • CANOPY Management
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A bright stylized downtown scene full of yellow cabs and brightly lit buildings with Amazon advertising in lights

Last Updated: November 2025

Amazon is getting more competitive every day. Read to the end for next-level PPC advertising tips to help you dominate your niche.

Why Amazon PPC Matters More Than Ever

Let’s imagine you already have a great Amazon product. You’ve done your research and know there’s a solid market for it. Maybe you’re already making sales.

People WANT to buy it.

But here’s why you need to spend your hard-earned money on Amazon pay per click (PPC) advertising:

Amazon isn’t just a huge marketplace—it’s the world’s most powerful, sales-oriented search engine.

On Google, there may be numerous reasons why someone is using a particular keyword in a search. They might be writing a blog post, finishing a school assignment, or doing research for a patent.

If they’re searching for that same keyword on Amazon, they’re ready to buy.

But you’re not alone here.

A frontal view of hundreds of e-commerce sellers with visible individual features

The Competitive Landscape in 2025

Millions of Amazon sellers exist worldwide, though only a fraction are actively selling. This actually creates opportunities—there’s been a significant reduction in active competition in many categories, meaning more traffic per active seller than in previous years.

A large percentage of those active sellers are watching the same videos and signing up for seemingly-cloned courses in their quest to make it onto Amazon’s first page.

Amazon is perfectly happy if everyone is a little bit successful. After all, they get paid one way or the other.

However, you are uniquely focused on your own success. You are in COMPETITION with the rest of the sellers in your niche.

A first step for Amazon sellers is to make sure that your product is fully optimized. That’s the best way to stand out from the competition.

Once you’ve done that, you need to advertise your product so prospective buyers actually see it.

Research indicates that Amazon PPC ad campaigns significantly outperform cross-media campaigns that don’t include Amazon ads when measuring brand awareness impact.

That’s where Amazon pay per click advertising comes in.

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What is Amazon PPC Advertising? 

Amazon Pay-per-Click (PPC) advertising is part of Amazon’s internal advertising system.

Using Amazon PPC, third-party sellers, brands, and agencies bid for specific keywords, products or categories to create advertisements for their products.

These advertisements then show up in:

With the pay-per-click model, you (as the advertiser) only pay Amazon when a shopper clicks on the ad.

When a PPC campaign is managed and optimized well, it can significantly boost product visibility and sales.

Current in 2025: Amazon’s AI-powered systems now automatically adjust where and how your ads appear based on real-time shopper behavior, making campaigns more effective than ever.

Amazon Sponsored Ads allow you to track the sales your ads generate, helping you identify which specific ads drive conversions. That helps you understand what segments to double down on and SAVES you Amazon ad dollars.

Unfortunately, Amazon digital marketing can feel overwhelming in the beginning. With multiple strategies as well as ad and campaign types, it’s sometimes difficult to determine how to allocate your ad spend.

Let’s look closer at those keywords you’re bidding on. How do you find the best ones?

How to Find High Performing Amazon Keywords

It starts with research.

Amazon keyword research is the process of identifying and analyzing the specific words and phrases that potential customers use when searching for products on Amazon’s platform.

The goal: optimize product listings and advertising campaigns to improve visibility and increase sales.

For many sellers, the process begins with analyzing Amazon’s Search Term Report and auto-complete suggestions to pinpoint high-performing keywords—particularly those leading to sales and high click-through rates.

In many cases, it’s complemented by examining competitor listings using tools like Helium 10 or Jungle Scout to uncover successful keywords and identify potential gaps in the market.

To get started, dig into customer reviews of both your own and competitors’ products to look at common phrases and natural language terms used by customers. You can also incorporate those terms into keyword strategies for more authentic, real-time product targeting.

AI Enhancement (Current in 2025): A growing percentage of Amazon sellers now use AI tools to help create and optimize their keyword strategies, making the process more efficient and data-driven.

A judge banging his gavel on an Amazon branded block of wood

Understanding the Amazon PPC Auction

The cost per click (CPC) for each Amazon PPC ad is determined through a dynamic auction process where you, as the advertiser, bid on specific keywords relevant to your products.

Here’s how it works:

1. Select Keywords & Set Bids Begin by selecting keywords you want to target and set a maximum bid amount for each keyword.

2. Shopper Searches When an Amazon shopper searches using one of these keywords, Amazon’s algorithm triggers an instantaneous auction.

3. Amazon Evaluates Amazon’s algorithm considers factors such as bid amount, ad relevance, and historical performance to determine ad placement.

4. Winning Bid Amazon awards the top ad positions to the highest-ranking bidders for that particular keyword.

5. You Pay Second-Price The winning Amazon advertiser pays one cent more than the next-highest bid. This is known as a second-price auction model.

Example: If you bid $1.25 on a keyword and the next highest bid is $1.00, you would win the auction but only pay $1.01 per click.

This system encourages competitive bidding while establishing a fair baseline price for ad placements.

Ready to Start Growing Your Amazon Brand?

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Amazon PPC Vocabulary 101

Amazon PPC comes with its own language. Here are key terms you need to know before we look more closely at Amazon Sponsored Product Ads.

Advertising Cost of Sales (ACoS) The percentage of attributed sales spent on advertising. Calculate it by dividing total ad spend by attributed sales.

Example: If you spent $8 on advertising resulting in attributed sales of $40, your ACoS would be 20% ($8/$40 = 0.20).

Automatic Ad Campaign With an automatic ad campaign, Amazon selects (for you) the keywords they think you should target based on the information in your Amazon product listing: title, bullet points, description, and keyword search terms.

Attributed Sales Sales attribution tells you which specific ads are driving sales. It reflects the total dollar value of your brand’s products sold to shoppers within 14 days of them clicking on your ad.

Clicks The number of times your ads were clicked.

Click-Through Rate (CTR) The number of clicks on your links divided by the number of impressions, expressed as a percentage.

Example: If your links got 50 clicks for 1,000 impressions, your click-through rate would be 50/1,000 = 0.05, or 5%.

Impressions The number of times your ads were displayed.

Keyword Bid The maximum cost you are willing to pay when someone clicks your ad.

Manual Ad Campaign The seller chooses the keywords to be targeted in the ads.

New-to-Brand (NTB) Targeting (Current in 2025) Advanced targeting that allows you to specifically bid higher for shoppers who haven’t purchased from your brand in the past 12 months.

Return on Ad Spend (ROAS) The revenue generated for every dollar spent on advertising. Successful Amazon sellers commonly achieve 4x-5x ROAS.

Amazon Sponsored Product Ads Cost-per-click (CPC) ads that promote individual product listings on Amazon.

Sponsored Brand Ads Cost-per-click (CPC) ads that feature a brand logo, a custom headline, and multiple products.

Sponsored Display Ads Amazon’s latest ad product—cost-per-click (CPC) ads that allow brands to reach their audience with advanced product and category targeting, including ads that appear both on and off Amazon.

Getting Started With Sponsored Product Ads

If you’re just beginning your PPC campaign, Sponsored Product Ads will likely be the ad type you use, and it’s a good idea to master them before you move on to Sponsored Brand and Sponsored Display Ads.

Sponsored Product Ads help you get your product listings in front of shoppers searching for similar products. With this ad type, buyers will discover and purchase your products that appear on product pages or in shopping results.

An advantage: they don’t look like an ad, except for the tiny “Sponsored” tag at the top of the listing. They fit perfectly into relevant search results and help to enhance shoppers’ experience rather than distract from it.

An Amazon Sponsored Product Ad can appear in multiple locations:

Because of this expanded reach, Amazon Sponsored Products are more versatile than ever and can be used to achieve a range of marketing goals:

A young woman with long blonde hair shouting through a blue and white, Amazon branded bullhorn

3 Big Reasons to Use Sponsored Product Ads 

  1. They’re easy to create. You don’t need specific advertising or creative skills to get started. A Sponsored Products Ad generates ads from your own product listings and offers automatic targeting so you can begin advertising with no experience necessary.
  2. You can control your costs. A Sponsored Ad is cost-per-click (CPC), so you only pay when customers click your ads. Choose how much to bid per click and set your own budget.
  3. Use them to track your success. Take advantage of sales and performance metrics to measure the direct impact of your ads on your business. That information is how beginning Amazon PPC advertisers become experts.

Bonus (Current in 2025): Sponsored Products generate the most clicks, have the highest CTR, and produce the most revenue compared to other ad types, with the majority of sellers using them as their primary advertising method.

Who Can Use Sponsored Product Ads?

Amazon Sponsored Product Ads are self-service ads that you can manage yourself or hand off to an experienced Amazon advertising agency or consultant.

Sponsored Product Ads are available for anyone selling on Amazon, including:

Note: Products must be in one or more eligible categories and be eligible for the Featured Offer in order to advertise.

How Much Do Sponsored Product Ads Cost in 2025?

The cost-per-click for Amazon PPC ads commonly ranges from under $1 to $3 in 2025, varying significantly by category and competition level.

However, the CPC can vary greatly depending on the product category, marketplace, and ad type. The cost moves up and down depending on the level of competition in your niche or for a particular placement.

Important Update (Current in 2025):

Rising Costs Alert: Amazon advertising costs have increased notably since 2024. This is due to increased investment from brands and thousands of new sellers entering the platform.

An Amazon Sponsored Product Ad is the backbone of Amazon advertising. They’re able to support most advertising goals and can be extremely profitable if you know how to use them.

That versatility is why many Amazon experts recommend putting up to 70% of your total ad budget into Sponsored Product Ads.

Three men kneeling directly in front of Amazon logo'd targets in the process of shooting arrows at the targets

Why Most Sellers Waste Money on Broad Match Keywords

Here’s something most PPC guides won’t tell you:

Broad match keywords are where budgets go to die.

In our work managing PPC campaigns across multiple seven-figure accounts, we consistently observe the same pattern: sellers using broad match as their primary strategy waste significant budget on irrelevant clicks.

Amazon’s algorithm prioritizes conversion velocity over keyword match precision. That means your broad match clicks—even the expensive ones—rarely convert unless buyers are already close to purchase intent.

The Math That Hurts:

A seller bidding on “coffee maker” broad match will trigger ads for:

These searches generate clicks. They cost money. They almost never convert.

The Fix:

Start with automatic campaigns to discover what actually converts. After 2-3 weeks, migrate your best-performing search terms to exact match manual campaigns.

Conversion rates often improve significantly—commonly by 40% or more in our client work—while ACoS drops by similar margins.

This isn’t theory. It’s what happens when you stop letting Amazon spend your money on broad match fishing expeditions.

The 80/20 Rule for Amazon PPC That Nobody Talks About

Most Amazon PPC content focuses on keywords, bids, and optimization tactics.

They’re missing the bigger picture.

In our analysis across brands managing six-figure monthly ad spends, we’ve identified a pattern that changes everything:

20% of your campaigns will drive 80% of your profitable sales.

But here’s what makes this insight actionable:

The top 20% share specific characteristics:

What This Means For Your Strategy:

Stop spreading your budget evenly across all products.

Identify your top 20% products using the criteria above, then allocate 60-70% of your total PPC budget to those campaigns.

The remaining 30-40% becomes your testing budget for new products and experimental campaigns.

Brands that make this shift often see substantial ROAS improvements within 60-90 days—commonly 25% or more based on our experience managing multiple accounts—not because they got better at PPC tactics, but because they stopped wasting money advertising products that were never going to be profitable via paid ads.

The hardest part? Accepting that some of your products shouldn’t be advertised at all.

Next-Level PPC Strategies for 2025

As Amazon’s marketplace becomes increasingly competitive, savvy sellers are turning to advanced Pay-Per-Click (PPC) strategies—or in many cases, Amazon PPC agencies—to gain an edge.

These next-level techniques go beyond basic keyword bidding and campaign structuring, offering more nuanced ways to optimize ad performance and maximize return on investment.

By leveraging data-driven insights and Amazon’s sophisticated targeting options, you can fine-tune your campaigns for peak efficiency and effectiveness.

Advanced strategies such as dayparting, negative keyword optimization, and product targeting allow you to fine-tune your campaigns, maximize ad spend efficiency, and adapt to Amazon’s evolving algorithm. These techniques make it more likely that you can stay ahead of competitors and greatly improve your return on ad spend (ROAS).

In 2025, simply bidding on keywords is often not enough to guarantee success.

What is Dayparting?

Dayparting is a sophisticated Amazon PPC strategy that involves adjusting ad schedules—sometimes by the minute—based on peak shopping hours.

As artificial intelligence has become more sophisticated, dayparting has become an important component of overall ad campaign strategy.

By analyzing hourly sales data and considering industry-specific trends, you’re able to identify the most profitable times to run ads. Using Amazon’s dayparting features or third-party tools, you can create time-based campaigns with tailored bid strategies, maximizing ad spend efficiency during high-conversion periods.

How Does Negative Keyword Optimization Work?

Negative keyword optimization helps refine ad targeting and reduces wasted ad spend.

This process involves regularly reviewing Search Term Reports to identify irrelevant search terms that trigger ads but don’t lead to conversions.

As an advertiser, you can implement negative exact, phrase, and broad match types to exclude these terms, ensuring ads are shown only to the most relevant audience. However, caution is needed when using broad match negatives to avoid over-restricting ad visibility.

Drill Down With Product Targeting Strategies

Product targeting strategies offer a powerful way to reach specific customer segments.

ASIN targeting makes it possible for your ads to show alongside complementary products or competitor listings, capturing comparison shoppers.

Category targeting increases visibility within relevant product categories, with refined options like price filters for precision.

Brand targeting lets you play defense, attracting customers from your competitors while leveraging the popularity of well-known brands in your category.

AI-Generated Content

A growing percentage of Amazon sellers now use AI tools to create and optimize:

Off-Amazon Advertising Opportunities

Major 2025 Update: Amazon Sponsored Products now automatically appear on premium external websites, dramatically expanding your reach.

Automatic External Placements

Your Sponsored Products ads now appear on:

Configuration Options

Amazon offers two strategic approaches for off-Amazon placements:

Maximize Reach (Default)

Minimize Spend

Best Part: This expanded reach requires no extra setup from advertisers—Amazon automatically showcases your ads on external sites when relevant buyer interest is detected.

How Canopy Management Can Help

As Amazon’s marketplace becomes increasingly competitive, Amazon advertising has grown in complexity.

It’s no longer enough to have “good business instincts” as many entrepreneurs do. It’s a different ballgame now.

That’s why many experienced Amazon sellers reach out to the team at Canopy Management.

Built for Amazon. Designed for Growth

Ready to partner with a team that has the systems and expertise to scale your brand?

Canopy Management delivers end-to-end eCommerce growth, leading the industry in Amazon marketplace strategy while powering expansion through Shopify, Meta, and Google. Our full-funnel approach — from marketplace optimization to customer acquisition — has generated over $3.3 billion in partner revenue and made us the trusted growth engine for brands worldwide.

Schedule a strategy session with our team to discover exactly how our proven frameworks can accelerate your growth.

Thinking About Hiring an Amazon Management Agency?

Canopy’s Partners Achieve an Average 84% Profit Increase!

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Frequently Asked Questions

What’s the minimum budget needed to start Amazon PPC?

There’s no minimum budget requirement for Amazon PPC campaigns. You can start with as little as $5-10 per day.

However, brands managing meaningful test data typically start with at least $20-30 per day per campaign. This provides enough volume to gather actionable performance data and achieve consistent results within the first 30-45 days.

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

Most sellers begin seeing clicks and initial data within 24-48 hours of launching a campaign.

However, it typically takes 2-4 weeks to gather enough data to make informed optimization decisions. Significant performance improvements usually occur within 30-60 days of consistent optimization.

New product launches take longer—usually 90-120 days to build sufficient sales velocity for organic ranking impact.

Should I use automatic or manual campaigns first?

Start with automatic campaigns if you’re new to Amazon PPC or launching a new product.

Automatic campaigns help you discover high-performing keywords that you can later use in manual campaigns. Once you have keyword data (usually after 2-4 weeks), create manual campaigns for better control and optimization.

This staged approach prevents you from guessing at keywords while wasting budget on untested terms.

What’s a good ACoS (Advertising Cost of Sales)?

There’s no universal “good” ACoS—it depends entirely on your profit margins and business goals.

Your break-even ACoS equals your unit margin percentage. If you have 30% margins, 30% is your break-even point.

Generally:

Remember: if your ACoS equals your profit margin, you’re breaking even on ad spend while potentially gaining organic ranking benefits from increased sales velocity.

How do I know if my keywords are too expensive?

Use the 2.5% Rule: Your target cost-per-click should be no more than 2.5% of your product’s sales price.

Example: A $40 product should have CPCs under $1.00.

If keywords consistently exceed this threshold, consider:

Can Amazon PPC help with organic rankings?

Yes. Amazon PPC can significantly boost organic rankings through:

The sales generated from PPC campaigns send positive signals to Amazon’s algorithm, often resulting in better organic search positions. This creates a flywheel effect: PPC drives sales, which improves organic ranking, which drives more organic sales.

What’s the difference between Sponsored Products, Sponsored Brands, and Sponsored Display?

Amazon Sponsored Products:

Sponsored Brands:

Amazon Sponsored Display:

How often should I optimize my campaigns?

Weekly: Review performance metrics, search term reports, and adjust bids for high-performing keywords.

Bi-weekly: Add negative keywords, pause underperforming keywords, and analyze competitor activity.

Monthly: Conduct comprehensive campaign reviews, adjust budgets, and implement new strategies based on accumulated data.

Quarterly: Evaluate overall account performance, restructure campaigns if needed, and plan seasonal adjustments.

Consistent optimization beats sporadic major changes. Small, data-driven adjustments compound over time.

What are the most common Amazon PPC mistakes to avoid?

Setting budgets too low: Insufficient budget prevents ads from running consistently, making it impossible to gather meaningful performance data.

Ignoring negative keywords: Leads to wasted spend on irrelevant searches that will never convert.

Not using match types strategically: Missing opportunities for precise targeting and cost control.

Focusing only on ACoS: Ignoring other important metrics like conversion rate, click-through rate, and total sales volume.

Not optimizing product listings first: Poor listings hurt ad performance regardless of bid amounts or campaign structure.

Overlapping campaigns: Multiple campaigns targeting the same keywords can increase costs through self-competition.

How do I track the success of my Amazon PPC campaigns?

Key metrics to monitor:

ACoS (Advertising Cost of Sales): Total ad spend ÷ attributed sales (aim for below your break-even point)

ROAS (Return on Ad Spend): Revenue ÷ ad spend (successful sellers commonly achieve 4x-5x or higher)

CTR (Click-Through Rate): Should be above 0.5% for most categories; higher is better

Conversion Rate: Percentage of clicks that result in sales; benchmark varies by category

Cost Per Click (CPC): How much you pay per click; compare to your 2.5% threshold

Impression Share: How often your ads appear vs. total available impressions

Use Amazon’s Campaign Manager for basic tracking, Brand Analytics for deeper insights, and third-party tools like Helium 10 or Jungle Scout for comprehensive tracking and competitive analysis.

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