Amazon Advertising 101

30 May Amazon Advertising 101

Amazon Ads in 2025

Amazon’s advertising business is gaining momentum, especially as it expands its offerings. Amazon DSP (Demand Side Platform) has enabled merchants to buy large quantities of display and video advertisements programmatically and target consumers on Amazon.com, Fire TV Sticks, IMDb.com, Kindles, Freedive, apps, and third-party sites. DSP ads are a form of programmatic advertising that allows brands to purchase ad space across Amazon and its affiliated platforms, increasing brand awareness and reach. We look to present our Amazon Advertising 101 to help you understand the platform and decide which is best for your business.

While both Amazon advertising and Google Ads offer paid advertising opportunities, Amazon advertising requires unique strategies tailored to product promotion within the Amazon ecosystem.

DSP advertising enables advanced targeting and cross-channel advertising capabilities beyond traditional sponsored ads.

Advertise on Amazon

Amazon is one of the biggest marketplaces. It’s so popular among online shoppers that some of them are so loyal to Amazon that they won’t even consider purchasing products off the platform. The ability for consumers to purchase online is a key factor in the success of Amazon’s advertising.

Amazon’s dominance is bolstered by fierce competition among Amazon vendors. As a result, Amazon Advertising is expanding, and merchants require a comprehensive advertising strategy that will deliver them the highest return on investment possible. Tracking and optimising advertising costs is essential to improve campaign efficiency and ROI. When considering how much advertising on Amazon typically costs, factors such as keyword competition and bidding strategies play a significant role in determining overall ad spend.

Analysing how much revenue is generated from advertising efforts is crucial to evaluating the effectiveness of campaigns.

What Are Amazon Ads?

Amazon Advertising is a pay-per-click advertising platform that works similarly to Google’s. Sellers only pay when consumers click on advertisements (regardless of whether or not the product sells), as with Google PPC ads. Amazon PPC (pay-per-click) campaigns are a core component of Amazon advertising strategies, helping sellers improve product rankings and drive sales. Pay-per-click ads on Amazon only incur costs when shoppers click, just like on other platforms.

After Google PPC ads, it’s important to note that search advertising on Amazon targets specific search terms to increase product visibility within search results.

Amazon advertising has a lot of advantages:

• A trusted site and brand name that advertisers seek out
• Faster sales process
• Heightened product visibility
• Improved brand recognition and awareness
• Customer buyer behaviour data and analytics
• Comprehensive results tracking
• Effective advertising can directly increase product sales and improve sales history

Amazon Advertising is a pay-per-click system (PPC). It differs from eBay’s Promoted Listings in that it utilises the PPS (pay-per-sale) funding model. Organising campaigns into specific ad groups allows for better targeting and control over which products or keywords are promoted.

E-commerce expert Gurkan says Amazon has a close relationship between advertising and organic search. The aim of the platform is to generate purchases by displaying high-converting and best-selling goods that are relevant to the query first. As a result, Amazon wants to prioritise items with good sales and feedback history, as these are likely to sell the most. When sales and the number of comments improve, items rise in organic ranks.

Amazon sellers may use a variety of ad formats and placements when advertising their products, such as Amazon Sponsored Products, Sponsored Brands, and so on. You’ll find further information about each type of Amazon ads in the Amazon Advertising 101 sections below. Amazon Seller Central is the primary platform for managing product listings and advertising campaigns. Having a well-optimised Seller Central account is essential for successful advertising and campaign management on Amazon.

Benefits of Advertising on Amazon

Advertising on Amazon offers a powerful way for businesses to boost brand and product awareness, ultimately driving more sales and increasing revenue. With Amazon Ads, you can tap into a massive, highly engaged audience—over 75% of shoppers use Amazon to discover new products and brands, making it an ideal platform for expanding your reach.

One of the standout benefits of advertising on Amazon is the ability to improve your organic rankings and sales history. Since sales history is a very strong ranking factor on Amazon, running sponsored brands campaigns and other ad types can help your products climb higher in organic search results, leading to even more visibility and organic sales.

Amazon Ads also provide valuable insights into your customers’ shopping behaviour and habits. By analysing this data, you can refine your advertising strategy and better understand what drives shoppers to click and purchase.

Cost-effectiveness is another key advantage. With an average cost per click of just $0.81, advertising on Amazon is accessible for businesses of all sizes. The pay-per-click model ensures that your ad spend is optimised, as you only pay when shoppers click on your ads.

Sponsored brand campaigns are especially effective for increasing brand recognition. These ads allow you to showcase your brand logo and a selection of products, helping to build trust and familiarity with potential customers.

In summary, Amazon Ads offer:

• Increased brand and product awareness
• Access to a large, engaged audience
• Improved organic rankings and sales history
• Valuable insights into customer behaviour
• Cost-effective advertising with optimised ad spend
• Enhanced brand recognition through sponsored brands and brand logo visibility

Types of Amazon Ads

Amazon offers a variety of ad types to help businesses reach shoppers at every stage of the shopping journey. Understanding these options allows you to create a comprehensive advertising strategy that maximises your visibility and sales.

• Sponsored Product Ads: These keyword-targeted ads appear in search results and on product detail pages, driving traffic directly to individual product listings. Sponsored product ads are ideal for promoting specific items and increasing their visibility among relevant shoppers.
• Sponsored Brand Ads (Headline Search Ads): Sponsored brand ads, also known as headline search ads, are prominently displayed at the top of search results. They showcase your brand logo and multiple products, making them perfect for building brand recognition and driving traffic to your Amazon Store or a curated product page.
• Sponsored Display Ads: Sponsored display ads go beyond search results, appearing on product detail pages, customer review pages, and even on third-party websites. These display ads help you reach shoppers who have shown interest in similar products, keeping your brand top-of-mind throughout the shopping journey.
• Video Ads: Amazon’s video ads provide an engaging way to showcase your products and tell your brand story. These ads can appear in search results or on product detail pages, capturing attention and increasing brand awareness.
• Product Display Ads: Product display ads are interest or product-targeted display ads that drive shoppers to your product detail page. They are effective for targeting shoppers based on their browsing and purchase history.

By leveraging a mix of these ad types—including sponsored product ads, sponsored brand ads, sponsored display ads, headline search ads, and video ads—you can ensure your products and brand are visible at every touchpoint, from initial discovery to final purchase.

1. Product Display Ads:

An Amazon Prime member can get a 30-day free trial of the service, in which they will be able to enjoy its benefits. To begin, you must first create an account on their website and then log in using your email address and password. After that, go to Amazon Smile where you choose a charitable organization that receives part of the purchase.

A product display ad is a type of visual advertisement that appears in various ad spaces across Amazon, such as product detail pages and search results. Product detail pages, consumer review sites, the top of the offer listing page, and below the search results are all potential locations for display advertising. Securing premium ad space can significantly increase the visibility and effectiveness of your product display advertising. You can also utilise abandoned cart notifications, follow-up emails, and recommendations emails as well.

Simply put, if you want to track your performance, use a reporting tool that shows your campaigns’ clicks, spend, sales, advertising cost of sales (ACoS), detail page visits, average cost-per-click (ACPC), and so on. Monitoring your advertising costs is essential to ensure your campaigns remain profitable and efficient.

2. Sponsored Campaigns:

You can use sponsored brand campaigns to advertise keyword-targeted ads for multiple items above, below, and beside the search result list. Amazon Sponsored Ads include various formats such as sponsored product ads and sponsored brand ads, each with unique targeting options. Sponsored ads are a key component of Amazon ads, helping sellers increase product visibility and drive sales. Sponsored advertising is a form of PPC campaign that promotes products directly within search results. Sponsored brand ads are visually prominent ads featuring a brand’s logo and multiple products, often appearing above search results. SP ads target specific products or keywords to enhance visibility and sales. They’re based on a pay-per-click, auction-based pricing model. You may direct the customer to your own product page or your Amazon Store, depending on your preference.

Advertising professional Daniel recommends including up to three distinct items in your advertisements. Monitoring the success of each campaign and customising accordingly will help to test which images, headlines, and landing pages gain the most traction. Running sponsored product campaigns is essential to track performance metrics such as CPC, ACoS, and ROI, allowing you to optimise your advertising strategy.

There’s a reporting section that displays your advertising clicks, spending, sales, and predicted win rate for keywords, as well as ACoS (Ad Cost of Sales) to assess the success of your campaigns.

3. Sponsored Products:

The standard product listings that appear in search results and product detail pages are Sponsored Products. They’re pay-per-click, keyword-optimised display advertisements for individual items. The link takes you to the product details page.

Use a reporting tool that displays your Sponsored Product Ads’ clicks, spend, sales, and advertising cost of sales (ACoS) to assess their performance.

4. Native Ads:

On the company’s own website, Native Ads can be used. Recommendation advertising, search advertisements, and custom advertising are examples of these types of adverts.

Business mentor Muzi recommends creating time-sensitive goals, such as increasing sales or boosting brand recognition. If you’re aiming to increase sales on Amazon, for example, your Advertising Cost of Sales (ACoS) might be a good metric of success. You might realise that you’re selling the wrong products. Selecting the appropriate items to advertise has a lot of advantages. The most popular goods, as well as competitive pricing, have the greatest potential for sales conversions.

Create user-friendly product pages that are easy to understand and buy. Make sure your titles are accurate and descriptive, as well as your content. Include high-resolution pictures where appropriate. Make a budget and stick to it. Plan, act, and test what works and what doesn’t as part of your digital marketing strategy. Experiment with ad formats, keywords, target audiences, and content, for example. Then distribute the remaining funds in such a way that the sweet spot is satisfied.

Keep track of changes: Amazon is always changing. Additionally, new trends are coming into vogue all the time. Even if your current campaign is successful, you must be adaptable and check your advertisements on a regular basis.

Consider markets with less competition and lower CPCs (cost-per-click) and higher return on advertising spend. These might be international markets where local online vendors are unable to provide certain items or satisfy the demand for them.

The constantly expanding e-commerce sector, as well as the ever-increasing competition, are driving marketplace digital advertising spending. As a result, Amazon’s ad business is flourishing, especially given its efforts to diversify its ad offerings across its ecosystem.

Amazon advertising presents both advantages and difficulties. As a result, vendors must have a well-planned, adaptable advertising strategy to differentiate themselves in an oversaturated market. They also need to be flexible in the face of ever-changing market conditions.

If you are looking to advertise or explore the opportunity highlighted with our Amazon Advertising 101, reach out to our team via [email protected] or contact us online to discuss an Amazon advertising strategy.

Creating Effective Ad Campaigns

To maximise your results with Amazon Ads, it’s essential to create well-structured and targeted ad campaigns. Start by conducting thorough keyword research to identify the most relevant keywords and phrases that your target audience is searching for. This ensures your ads appear in front of shoppers who are most likely to convert.

Organise your ad campaigns by main product categories, and create ad groups within each campaign for more specific targeting. This structure allows you to tailor your ad copy and bids to different products and audiences, improving overall performance.

Craft compelling ad copy that highlights your product’s unique features, benefits, and any special promotions. Use urgency and clear calls to action to encourage shoppers to click. Experiment with different ad formats, such as sponsored product ads, headline search ads, and product display ads, to see which resonates best with your audience.

Utilise negative keywords and conservative match types to minimise wasted spend and ensure your ads are shown to the most relevant shoppers. Regularly monitor your ad campaigns using Amazon’s advertising platforms, such as Seller Central and the ad console, to track performance and make data-driven adjustments.

Ongoing optimisation is key—adjust your ad copy, targeting, and bids based on performance data to maximise your return on investment. By following these best practices, you can create effective ad campaigns that drive results and help you achieve your advertising goals on Amazon.

Managing Ad Spend

Effectively managing your ad spend is crucial for maximising the impact of your Amazon advertising efforts. Start by setting a daily budget for each ad campaign and bidding strategically, taking into account the cost of each click and the potential return on investment.

Regularly monitor your ad spend and campaign performance, making adjustments as needed to ensure your advertising goals are being met. Amazon offers automated bidding strategies that can help optimise your ad spend and improve campaign results, allowing you to focus on higher-level marketing efforts.

Leverage Amazon’s robust reporting tools to gain valuable insights into your ad spend, clicks, and conversions. Use this data to make informed decisions and continually refine your campaigns for better performance.

Balance your Amazon ad spend with other digital marketing initiatives, such as social media marketing and direct-to-consumer websites, to create a well-rounded marketing strategy. Always consider your total ad spend and net profit to ensure your advertising efforts are generating a positive return on investment.

By regularly reviewing and optimising your ad spend, you can ensure that your Amazon advertising campaigns remain efficient, effective, and aligned with your overall business objectives.