Why Advertise on Amazon?
Amazon is where a huge share of UK shoppers start their product search, often ahead of Google, and they arrive ready to buy. Advertising on Amazon is how you get your products seen in an increasingly crowded marketplace where organic visibility alone is rarely enough.
Three reasons Amazon advertising is powerful:
- Intent — people on Amazon are shopping, not browsing, so ads reach buyers at the moment of purchase.
- Visibility — ads put you at the top of results and on competitor listings, where the sales happen.
- A virtuous circle — ad-driven sales improve your organic ranking on Amazon, which drives more sales.
Done well, Amazon advertising drives profitable sales and strengthens your whole presence on the platform. Done badly, it quietly burns budget on the wrong clicks. This guide covers how it works, the ad types, and how to run it without wasting money. For how it compares to search ads, see Google Ads vs Meta.
What Are the Main Types of Amazon Ads?
Amazon offers three core ad types, each with a job:
- Sponsored Products — ads for individual products that appear in search results and on product pages. The workhorse of Amazon advertising and where most sellers start; they promote a single listing to shoppers searching relevant terms.
- Sponsored Brands — ads featuring your logo, a custom headline and multiple products, shown at the top of search. Great for brand visibility and promoting a range (requires Brand Registry).
- Sponsored Display — ads that retarget shoppers on and off Amazon, and target competitor products and relevant audiences.
Most sellers begin with Sponsored Products (highest intent, easiest to control), then add Sponsored Brands and Display as they grow. Each plays a role across the funnel, from capturing high-intent search to building brand awareness and retargeting. The right mix depends on your goals, catalogue and whether you are Brand Registered.
How Do Amazon Ad Campaigns Work?
Amazon ads run on a pay-per-click auction, similar to Google, you bid to appear for search terms, and pay when someone clicks. The essentials:
- Keywords and targeting — you target the search terms shoppers use, or let Amazon auto-target and learn from the data.
- Bids — how much you will pay per click; higher bids win more visibility.
- Campaign structure — organising campaigns and ad groups by product, category or strategy so you can control and optimise them.
- Automatic vs manual — automatic campaigns let Amazon find keywords (great for discovery); manual campaigns give you control over the winners.
A common, effective approach is to run automatic campaigns to discover which search terms convert, then move the best performers into tightly controlled manual campaigns, and add poor performers as negative keywords. This "harvesting" cycle is the core of profitable Amazon PPC.
What Are ACoS and TACoS?
Amazon advertising has its own key metrics, and understanding them is essential to running it profitably:
- ACoS (Advertising Cost of Sales) — your ad spend divided by the sales those ads generated, as a percentage. Lower means more efficient. A "good" ACoS depends on your margins: if you make 40% margin, an ACoS below 40% means the ads are profitable.
- TACoS (Total Advertising Cost of Sales) — ad spend as a percentage of your total sales (ad-driven plus organic). This shows the bigger picture: a falling TACoS over time means your ads are building organic momentum, exactly what you want.
Judge campaigns on these against your margins, not on clicks or impressions. The goal is not the lowest possible ACoS (that usually means under-investing), but the level that maximises profitable sales. Watching TACoS trend down as organic sales grow is the sign of a healthy Amazon strategy.
What Budget Do You Need for Amazon Ads?
There is no fixed figure, Amazon ad budgets scale with your catalogue, margins and goals, but a few principles help:
- Start with enough to gather data — a few hundred pounds a month lets you learn which keywords and products convert.
- Let profitability guide scaling — once you know your ACoS and which campaigns are profitable, pour more budget into the winners.
- Budget by product — your best-margin, best-converting products deserve the most spend.
- Account for the learning phase — early spend is partly research; do not judge the first few weeks too harshly.
Because Amazon ads are tied directly to sales, they are largely self-funding once optimised, profitable campaigns pay for themselves and more. The key is to start, measure ACoS and TACoS, cut what loses money and scale what makes it. This is the same disciplined, returns-led approach behind any good paid media strategy.
What Are the Most Common Amazon Advertising Mistakes?
Sellers waste money on Amazon in predictable ways. Avoid these and you are ahead of most:
- Poor listings — ads send traffic to a listing that does not convert (bad images, weak title, few reviews). Fix the listing first; ads amplify what is already there.
- No negative keywords — paying for irrelevant searches that never convert.
- Set-and-forget — not reviewing and optimising, so spend drifts to poor performers.
- Judging on ACoS alone — ignoring TACoS and the organic-ranking benefit.
- Bidding the same on everything — instead of backing proven winners.
- Ignoring the auto-to-manual cycle — missing the chance to harvest and control profitable keywords.
The biggest one is advertising a listing that is not ready to convert, the fastest way to lower your ACoS is often to improve the product listing, not the bids. If you would like a review of your Amazon ads and listings, or help getting started, book a free audit and we will show you where the profit is.
