Amazon PPC: A Practical Guide for Sellers

Amazon PPC is cost-per-click advertising inside Amazon's search results and product pages. You bid on search terms or products, pay when a shopper clicks, and the sale lands on your normal listing. Done well, it gets new products seen and keeps established ones visible. Done carelessly, it is the fastest way to turn a profitable product into a loss-making one.

This guide covers Amazon PPC for UK sellers: the ad types, a campaign structure you can manage, how to set bids from your margin, and the weekly routine that keeps spend under control. Ad products and eligibility are described as they stand at the time of writing (October 2026); Amazon's UK advertising page has the current detail.

The three Amazon ad types

Sponsored Products drives most advertised sales for most sellers, so this guide concentrates on it. Some product types — adult, used, refurbished, and closed categories — cannot be advertised.

How Amazon's ad auction works

When a shopper searches, Amazon runs an auction among eligible ads. Your bid matters, but so does relevance: Amazon wants to show ads people will click and buy from. A strong listing — good main image, competitive price, reviews, a relevant title — tends to win placements more cheaply than a weak listing bidding more.

That is why the Amazon listing optimisation guide comes before any of this. PPC multiplies whatever conversion rate the listing already has. It cannot create one.

ACoS, TACoS and your break-even point

Three numbers matter:

• ACoS (advertising cost of sale) = ad spend ÷ ad-attributed sales. Spend £30 to generate £120 of sales and ACoS is 25%.
• Break-even ACoS = your profit margin before advertising, as a percentage of the sale price. If a £20 product leaves £5 after all fees and costs, break-even ACoS is 25%. Above that, each advertised sale loses money.
• TACoS (total advertising cost of sale) = ad spend ÷ total sales, including organic. It shows whether advertising is building the product overall or just buying sales that would have happened anyway.

Work out break-even ACoS per product before setting a single bid. Without it, you cannot tell a good campaign from a bad one.

Worked example (hypothetical numbers). A product sells for £25 including VAT. After VAT, referral fee, FBA fee, product cost and an allowance for returns, it leaves £6.50 — a break-even ACoS of 26%. If you aim to keep ACoS around 18%, there is room for profit after advertising. If a campaign is running at 35%, every advertised sale is losing about £2.25.

A campaign structure you can actually manage

Many accounts grow into dozens of overlapping campaigns nobody understands. A simpler structure for a small range:

1. Automatic campaign (discovery). Amazon chooses which searches and products to show your ad against, using four targeting groups: close match, loose match, substitutes and complements. You can bid on each group separately. Its job is to find search terms you would not have thought of.
2. Manual broad or phrase campaign (research). Your own keyword list, matched loosely. Also a discovery tool, but steered.
3. Manual exact campaign (performance). Search terms that have proven they sell, on exact match, with bids you control precisely.
4. Product targeting campaign. Targets specific competitor ASINs or categories, showing your ad on their product pages.

Search terms flow downwards: discovered in automatic or broad, proven by sales, then moved into exact match with their own bid — and added as negative exact in the discovery campaigns so they do not compete with themselves.

Match types

Setting bids

Start from what a click is worth, not from Amazon's suggested bid.

Maximum sensible bid = target ACoS × conversion rate × average sale price.

If your target ACoS is 20%, your listing converts 10% of clicks, and the average order is £25, a click is worth up to £0.50 to you (0.20 × 0.10 × £25). Bidding £1.20 because the suggested bid says so means paying well over what the click can return.

Early on you will not know your conversion rate. Start modestly, collect data, then adjust. A common working rule is not to judge a keyword until it has had enough clicks that you would have expected a couple of sales at your normal conversion rate.

Bidding strategies and placements

Sponsored Products offers three bidding strategies: dynamic bids — down only (Amazon may lower your bid where a sale looks unlikely), dynamic bids — up and down (it may also raise it where a sale looks likely), and fixed bids. Down only is the safer default while you learn.

You can also raise bids by a percentage for specific placements — top of search on the first page, product pages, or the rest of search. Check the placement report before adjusting; top-of-search often converts better but costs more per click.

The weekly PPC routine

1. Download the search term report. It shows the actual searches that triggered your ads.
2. Harvest winners. Terms with sales and acceptable ACoS go into the exact campaign.
3. Negate losers. Terms with meaningful spend and no sales, or clearly irrelevant ones, become negatives.
4. Adjust bids on exact keywords towards your target ACoS — down where it is too high, up gently where it is well under and impressions are limited.
5. Check budgets. A profitable campaign that runs out of budget by mid-afternoon is missing sales.
6. Look at TACoS monthly to see whether advertising is lifting total sales or just replacing organic ones.

Twenty minutes a week on a small account beats a big monthly overhaul.

Common Amazon PPC mistakes

• No negative keywords. Broad and automatic campaigns will spend on irrelevant searches indefinitely.
• Judging too early. Pausing a keyword after five clicks, or scaling one after a single sale.
• Advertising a weak listing. Clicks that land on a poor main image or an uncompetitive price do not convert.
• One campaign for everything. You cannot control bids per product or per term.
• Chasing a low ACoS at any cost. Very low ACoS can mean you are under-investing on terms that would bring profitable sales.
• Ignoring stock. Advertising products about to go out of stock wastes the momentum you paid for.

Launching a new product with PPC

New products have no sales history, so organic ranking is weak. PPC fills that gap:

1. Make sure the listing is complete — images, bullets, A+ Content if you have Brand Registry (Amazon A+ Content explains it).
2. Run automatic plus a small exact campaign on the most obvious terms.
3. Accept a higher ACoS for a defined period, with a written ceiling.
4. Tighten towards break-even once the product has sales and reviews.

The ceiling is the important part. "Launch spend" with no end date is how sellers lose money for months.

Sponsored Brands and Sponsored Display, briefly

Once Sponsored Products is profitable and you have Brand Registry, the other two formats have specific jobs:

• Sponsored Brands puts your logo, a headline and several products (or a short video) at the top of search results. It works best for brands with a range, where a shopper who clicks might buy something other than the product they searched for. It is also how you defend searches for your own brand name, which competitors can bid on.
• Sponsored Display shows ads on product pages and, depending on the targeting, to shoppers who viewed your products or similar ones. It is mainly a retargeting and defensive tool.

Both are worth testing with small budgets after the core Sponsored Products structure is working. Neither rescues a range whose Sponsored Products campaigns are unprofitable, because the underlying conversion problem is the same.

Reading the reports without fooling yourself

Amazon attributes sales to ads within a set attribution window after the click, and attributed sales include some buyers who would have found you anyway. Keep two checks: look at TACoS alongside ACoS, and compare organic sales during periods when ads were paused or reduced. If total sales barely move when advertising stops, much of the spend was buying sales you already had.

How Amazon PPC compares with eBay Promoted Listings

eBay's priority strategy is also a keyword auction, while its general strategy only charges when a promoted item sells. Amazon has no direct equivalent of that pay-on-sale model. eBay Promoted Listings covers that side, and the eBay listing optimisation guide explains how eBay ranks listings differently.

Where I come in

Campaign structuring and ongoing PPC management, against a budget you approve in advance and can see in your own Seller Central account, is a core part of my Amazon seller support service. No one can guarantee an ACoS or a ranking, but a clear structure, margin-based bids and a weekly routine are what make advertising spend accountable.