Amazon ads
Sponsored placements inside Amazon, judged on profit.
Amazon advertising is search advertising inside a shop. The person has already decided to buy something; the ad decides whether it is yours. That makes it one of the more direct channels there is, and one of the easiest to run at a loss while the dashboard says it is working.
How do Amazon ads work for a brand that sells on Amazon?
You bid for placements inside Amazon's own search results and product pages, and you pay when a shopper clicks. Sponsored Products promotes a single listing and is open to professional sellers and vendors whose product holds the Featured Offer. Sponsored Brands puts your logo, a headline and several products at the top of results, and requires sellers to be enrolled in Amazon Brand Registry. What Amazon used to call Sponsored Display is now sold as display ads.
The ad sends the shopper to your listing, so the listing does most of the selling. Price, stock, images, reviews and the buy box all decide whether the click you paid for becomes an order, and no bid fixes a weak listing.
This service is for brands that already sell on Amazon. It does nothing for a local service business, because nobody buys a dental check-up or a roof repair on Amazon. If that is you, the search advertising page is the one to read.
Written and maintained by the VIS Mountain team. Last reviewed . The sources behind it are listed below.
Advertising to somebody already holding their wallet
A shopper types a product into Amazon's search box. The results page mixes unpaid listings with sponsored ones, and the sponsored ones are the auction you are entering. The person is already inside a shop with a card on file, so intent is as high as it gets in advertising.
That is the appeal, and also the trap. Amazon reports how much revenue each ad produced, and the number is real. What it does not report is whether that revenue was profitable once referral fees, fulfilment, returns and the advertising itself come off, or whether the shopper would have bought from you anyway through the unpaid listing underneath the ad.
So the work is two jobs. The first is the ordinary craft of search advertising: which terms to bid on, how much, which to exclude, which products deserve budget. The second is refusing to judge any of it by the platform's headline figure, and asking instead what happened to total sales and profit while the ads ran.
Sponsored Products has no monthly or upfront fees. Every dollar is a bid on a click, and there is no floor on how badly a bid can be placed.
The ad types, as Amazon names them now
Names change: the product Amazon called Sponsored Display was folded into its display ads offering. This is how the products stood on Amazon's own pages when this page was written.
| Item | What it is | Who can use it |
|---|---|---|
| Sponsored Products | Cost-per-click ads for a single listing, in and beside shopping results and on product pages. Automatic or manual targeting. Image or video. | Professional sellers, vendors and agencies, for products in eligible categories that hold the Featured Offer |
| Sponsored Brands | Your brand name, a headline and several products or a video, in placements including the top of results. Cost per click or per thousand viewable impressions. | Vendors, and professional sellers enrolled in Amazon Brand Registry |
| Display ads | The format that replaced Sponsored Display. Placements on Amazon, its other properties and third party sites. Self-service, cost per click or per thousand views. | Any business, including ones that do not sell on Amazon. The managed version through Amazon DSP typically needs a minimum spend Amazon puts at 50,000 dollars |
For most brands the money starts in Sponsored Products, where a specific search meets a specific listing. Sponsored Brands earns its place once there is more than one product worth showing together. Display comes last, and often not at all for a smaller brand.
What the listing needs before a dollar is spent
Amazon only shows a Sponsored Products ad when the item is in stock and holds the Featured Offer. Beyond those gates, these decide whether a paid click becomes an order.
- Stock, deep enough that a successful campaign does not sell out and hand the listing to a competitor for a fortnight.
- A price that wins the Featured Offer without giving away the margin the ad has to be paid from.
- A title written as a description a person would read, not a list of search terms.
- Images that show scale, use and what is in the box, with the main image meeting Amazon's requirements.
- Bullet points and description that answer the questions shoppers ask in the questions section, because those are the objections the listing is failing to answer.
See the full checklist: What the listing needs before a dollar is spentHide the full checklist: What the listing needs before a dollar is spent
- Reviews earned within Amazon's rules. Amazon asks for a review automatically on every order, the Request a Review button sends one further neutral request, and Vine supplies reviewers for new products. A discount for a review is not a route.
- The right category and attributes, because the ad system and the shopper's filters both read them.
- A Brand Store, which Amazon offers free to registered brands, so a Sponsored Brands ad has somewhere worth landing.
If several are missing, the honest recommendation is to fix the listing first. Paying for clicks to a page that does not convert only measures how weak the page is.
How an Amazon account is actually run
Deliberately unglamorous. Most of the value comes from doing these things every week rather than from any clever setting.
Establish the break-even
For each product: selling price, referral fee, fulfilment, return rate and cost of goods. What is left is the most an ad can cost per sale before it loses money. Amazon's own guidance ties break-even advertising cost of sales directly to profit margin, and we will not run a campaign without that number.
Choose which products deserve budget
Not the whole catalogue. The products with margin to pay for a click, stock to fulfil the orders and a listing that converts. A few items usually carry the profit, and spreading spend evenly across everything is the most common structural mistake.
Run automatic targeting to harvest terms
Automatic campaigns let Amazon match the ad to searches and products it thinks are related. They are research as much as sales: the search term report shows exactly which shopper queries produced clicks and orders.
See the remaining steps: How an Amazon account is actually runHide the remaining steps: How an Amazon account is actually run
Move what works into manual campaigns
Terms that convert are promoted to manual campaigns with their own bids and match types. Broad match for discovery, phrase and exact for control. This is where the account stops guessing.
- Exact match for the terms that reliably produce orders
- Phrase match for close variations
- Product targeting for competitors' pages where your offer wins on price or reviews
Add negatives every week
The same report shows what you paid for and should not have: the wrong size, the wrong material, a brand you do not sell, a search with no purchase behind it. Negative keywords and negative product targets stop the bleed, and this is the highest-return hour in the month.
Adjust bids and budgets to the break-even
Bids move by term and placement against the number from the first step, not against a target return picked from the air. Daily budgets are not paced through the day, so a small budget can be gone by breakfast and the product invisible by lunch.
Read the whole business, not the ad report
Total sales, unpaid sales and profit for the advertised products, against the period before. Attributed sales rising while total sales stay flat means the ads are buying customers who were already yours.
We work inside your own advertising account, so the campaign history, the reports and the data stay yours if we part company.
Why the highest bid does not always win
Amazon does not publish its ranking formula, and placements are decided by more than the bid. The drawing shows the general shape of a paid search auction.
That is why retail readiness comes before bidding. Raising a bid on a listing that does not convert pays more for the same weak result.
Judging it by profit rather than by ACOS
Amazon's headline measure is advertising cost of sales, or ACOS: ad spend divided by the sales the ads are credited with. Its inverse is return on ad spend. Both are useful for comparing campaigns and misleading as a verdict on the channel, for two reasons.
First, they only count the sales Amazon attributes to a click, and say nothing about margin. A campaign at a healthy-looking ACOS can be losing money on every order once fees and returns are included, and a campaign that looks expensive can be the only reason a product ranks at all.
Read the full breakdown: Judging it by profit rather than by ACOSHide the full breakdown: Judging it by profit rather than by ACOS
Second, attributed sales include people who would have bought anyway. Your ad appears above your own unpaid listing, the shopper clicks the top one, and the sale is credited to the ad. Nothing was gained except a fee.
So the report we build compares ad spend with the total sales and the profit of the advertised products, and watches unpaid sales alongside paid. If total sales and profit rose while the ads ran and fell when they paused, the channel is working. If only the attributed column moved, it is not.
It also means being willing to stop. Some products should not be advertised, and some only until the reviews and ranking can hold the position unpaid.
The rules on reviews, and why they matter here
Reviews decide conversion, conversion decides the auction, and the shortcut is fatal. Amazon's customer product reviews policy lists what it treats as manipulation: money, discounts, free products or refunds in exchange for a review, asking a reviewer to change or remove one, a request for a positive review or an incentive inside the packaging, diverting negative feedback away from Amazon while sending positive feedback to it, and reviews from family or employees. Amazon holds the seller responsible for its employees and third party agencies even when it did not know.
The stated penalties are immediate and permanent loss of selling privileges, withholding of funds, removal of all the product's reviews, delisting, and possible legal action. This is the compliance point with the most expensive failure mode.
Read the full breakdown: The rules on reviews, and why they matter hereHide the full breakdown: The rules on reviews, and why they matter here
Above Amazon's rules sits the Federal Trade Commission. Its rule on consumer reviews and testimonials, 16 CFR Part 465, bars fake reviews, reviews from insiders without disclosure, and paying for reviews conditioned on a particular sentiment. Amazon's policy is stricter than the federal rule, and Amazon enforces faster.
Claims in the ad and the listing are governed as they are anywhere else: truthful, not misleading, backed by evidence. Health and supplement categories carry further restrictions inside Amazon's creative policies.
What we do instead is the slow route: Amazon's own automatic request, the Request a Review button where a second neutral ask is worth it, Vine where the product qualifies, and a listing that answers the objections the reviews raise.
What we need from you
Numbers, product by product: cost of goods, fees, return rates and stock. Without them there is no break-even, and no honest way to run this.
Brand Registry, if you own the brand and want Sponsored Brands or a Brand Store. That needs a registered or pending trademark on your side, and it takes time.
Read the full breakdown: What we need from youHide the full breakdown: What we need from you
Access to your advertising account rather than a new one created in ours, so the history is yours.
The listing work, or permission for us to do it, before spending starts.
A decision on which products the budget is for, and a willingness to hear that some should not be advertised at all.
We do not publish a price for this piece of work on its own, because the right scope depends on what already exists. What is published is the bundle pricing: 2,400, 3,600 or 4,800 dollars a month depending on which channels are running. You can read the full breakdown on the pricing page, and you will get an exact number in writing before anything starts.
How this connects to the rest
Amazon Ads sits under paid advertising, and it is the only channel there that runs inside somebody else's shop. If you are not sure whether Amazon or your own site should get the money, the industry page for Amazon sellers looks at that trade.
It behaves most like Google Ads: keywords, match types, negatives and bids against intent that already exists. The habits transfer.
The listing does the converting, which is the same job a landing page does for any other channel, and the same discipline as e-commerce SEO applied inside a marketplace.
Review management matters more here than almost anywhere, because the review count is in the auction. The rules above are why it has to be done slowly.
The brand that outlasts a policy change is the one with branded search and a customer list of its own. That is SEO and email marketing work, and it belongs alongside the ad account rather than after it.
Bring your fee sheet and your ad report.
We will work out the break-even for your advertised products and tell you which campaigns make money, which buy sales you already had, and what the listing needs before another dollar goes in.
Straight answers.
We run a local service business. Should we advertise on Amazon?
No. Amazon's sponsored ads promote products sold in the Amazon store, and there is no listing for a plumbing call-out or a dental appointment. The channel does nothing for you.
Search advertising on Google and Microsoft is where that demand lives, and those pages are the ones to read.
Do we need Brand Registry?
Not for Sponsored Products, which is open to professional sellers and vendors whose products hold the Featured Offer. You do need it for Sponsored Brands and for a Brand Store if you sell rather than supply as a vendor.
Registry is free but requires a registered or pending trademark, so if you own the brand and plan to grow on Amazon, starting the application early is sensible.
What is a good ACOS?
There is no general answer, and Amazon says as much. The only ACOS that matters is your break-even, set by the margin left after fees, fulfilment and returns for that product.
A campaign at a figure below your break-even makes money on the orders it is credited with. Whether it is making money for the business depends on whether total sales moved, which is why we report both.
Can we offer a discount or a free product for a review?
Not on Amazon. Its policy treats compensation for a review as manipulation, and the stated penalty starts at losing the account. Product inserts that ask for a positive review are covered too.
The federal rule on reviews and testimonials bars paying for reviews conditioned on a particular sentiment. Amazon's rules go further, and Amazon acts faster.
How much should we spend?
Sponsored Products has no monthly or upfront fees, and Amazon states no minimum spend for Sponsored Brands auction campaigns. The right amount follows from the break-even and from how many products can carry a click, which is why we establish those first.
Daily budgets are not paced through the day, so a small budget can be exhausted early and leave the product invisible for the rest of it.
Why is our advertising cost rising every year?
Sponsored placements occupy a large share of the results page and more sellers bid for them each year, so unpaid position is worth less than it looks and advertising is rarely optional. No account setting reverses that.
The response is to advertise fewer products harder, to keep cutting wasted terms, and to build the branded demand and the customer list that the platform does not control.
Where this comes from.
Primary documentation and published research behind the guidance on this page.
- Sponsored Products, Amazon Ads (opens in a new tab)Eligibility, placements, cost per click and how daily budgets are spent.
- Sponsored Brands, Amazon Ads (opens in a new tab)Sellers need Amazon Brand Registry. No minimum spend for auction campaigns.
- Display ads, Amazon Ads (opens in a new tab)The format that replaced Sponsored Display, and the managed-service minimum.
- A guide to targeting with Sponsored Products, Amazon Ads (opens in a new tab)Automatic and manual targeting, match types, the search term report and negatives.
- Customer product reviews policies, Amazon Seller Central (opens in a new tab)What counts as review manipulation, and Amazon's stated penalties.
- FTC rule banning fake reviews and testimonials (opens in a new tab)
Talk to the team
A short call, a look at how the business currently shows up, and a straight answer on what we would do first.