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Amazon Advertising EXPLAINED – PPC, TACoS, CTR and more!

by Jessica Clark | Last Updated: December 8, 2023
Amazon Advertising EXPLAINED – PPC, TACoS, CTR and more!

In my recent article ‘Preparing for Product Launch - Amazon SEO Index and Rank Strategies’ I said that to launch a product on Amazon you need to:


Do Amazon listing optimization


Have an Amazon Advertising Strategy.

In that article, I revealed my 6 Amazon SEO Strategies to Get Indexed and Ranked on Amazon.

Now, I turn the spotlight on Amazon PPC (Pay-Per-Click) ads. Let's dive deep into the world of Amazon Ads and break down the ins and outs of advertising on the largest online marketplace.

Helium 10 - amazon listing software

What is Amazon Ads?

Let's talk about Amazon Ads.  the powerhouse of advertising on the platform. If you want to get your products noticed and increase Amazon sales, this is the way to go.

The ads pop up in various spots on Amazon's website and mobile app, including search results and product pages, as well as on external websites and apps linked with Amazon.

sponsored amazon ads example

With Amazon Ads, you can pick from different ad formats that suit your specific marketing goals:

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Sponsored Product Ads let you promote individual products within search results and relevant product pages.

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Sponsored Brand Ads (also known as headline search ads) let you display your brand logo, tagline, and a selection of products in a single ad unit, which is awesome for boosting brand visibility. It’s also a way to promote several products in a collection in one campaign.

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Amazon Sponsored Display Ads enable sellers to promote both on and off Amazon. This is a form of retargeting that appears on Amazon and third-party websites and apps.

amazon ppc optimization options

What is Amazon Advertising?

The Amazon Ads platform is simply called Amazon Advertising. It is designed with robust targeting capabilities that help you reach shoppers based on varied factors like:

and purchasing behaviour.

For you as an advertiser, this means your ads reach the right people, making them more likely to convert into customers.

The interface is user-friendly, and you get detailed performance insights, making it easier for both newbies and seasoned advertisers to manage and perfect their campaigns.

Amazon Advertising can also be integrated with third-party software and automation tools like Helium 10 Adtomic so that can have complete control of your campaigns.

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Unravelling Amazon PPC: The Basics

What Is Amazon PPC?

Ever wondered, "What is Amazon PPC?" Well, Amazon PPC, or Pay-Per-Click, means you're only shelling out cash when a potential buyer clicks on your ad.

For new sellers and solopreneurs who are bootstrapping their Amazon business, it means you can advertise to get your product visible AND only pay when you get actual engagement or clicks.

How Much Are Amazon Ads?

Let's get down to the brass tacks – how much are Amazon Ads going to set you back?

Amazon sellers pay according to the cost per click (CPC) amount. This amount is how much a seller is willing to ‘bid’ for certain keywords or customer searches.

The bid amount is a bit of a moving target, influenced by factors like keyword competition and market demand:

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High-demand keywords or competitive product categories might result in higher CPCs.

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Niche products or specific long-tail keywords usually have less competition and lower CPCs.

But to give an idea, CPC can range from a few cents to several dollars.

Controlling Amazon Ad Spend - How much does Amazon PPC cost?

The cost of running an Amazon ad campaign can vary widely. Some sellers have a daily budget of $10 or less, while other sellers may spend $100 per day or even much more.

Part of your Amazon advertising strategy is to set an overall budget. Deciding on how much to spend on Amazon PPC should align with your cash flow and end game plan.

You can control your advertising budget inside Amazon’s advertising platform. Amazon Advertising offers a new inbuilt feature called “Stream” so that you can see how your ads perform by hours of the day. Using tools like Adtomic you can also automate your campaigns and control spend.

Common Amazon PPC Mistakes

As with most things in life, there are plenty of situations where we unknowingly go down the wrong path.

Most mistakes have already been made, so for a quick education (and to save yourself some time and money) read my 13 Common Amazon mistakes and Solutions to Improve TACoS article.

helium 10 - best amazon keyword research tool

What is Helium 10 Adtomic

Let’s segue a little and talk about Adtomic. This tool by Helium 10 is an advanced PPC advertising platform that will help you create Amazon ads, decide which keywords to target, analyze the results of your campaigns, and help you understand how to improve your return on advertising spend.

The key features of this tool are:

Advanced optimization & automation capabilities to save HOURS of time.
Actionable analytics so you can make quicker decisions.
Critical data to understand how PPC is affecting sales.
Simplifying Amazon Advertising so you avoid costly or time-consuming mistakes.

How Does Adtomic Work?

Here are some real-life examples of how Adtomic can help with PPC advertising:

  • Centralized PPC search terms in one view and advanced analytics showing you clicks and PPC orders and those with zero orders where you’re wasting money.
  • Use rules set in the background to dynamically manage your campaigns. You decide the rules and Adtomic works in the background to execute them.
  • Atomic makes suggestions for new search terms and keyword suggestions for your manual campaigns.
  • You can look at the data and schedule ads to STOP during low conversion times of the day. Targeting more profitable times of the day! See the screenshot below that shows how this works.
amazon ppc manager analytics

How To Get Adtomic

Adtomic is an add-on tool that you can attach to your existing Helium 10 plan. Our Helium 10 Pricing article explains how this works.

Amazon Advertising Strategy Types Explained

Bidding on relevant and high-volume PPC keywords is a common strategy when running Amazon Ads. But you can also decide to bid on long tail, low competition (and low cost) keywords.

Either way, when you choose your keywords you need to assign a maximum bid amount against each keyword.

Pro Tip: When bidding on PPC keywords you compete with other sellers. If you set your maximum bid too low, then you risk being outbid and losing out on advertising space. If a keyword is especially important then you need to consider increasing your bid.

When it comes to a keyword bidding strategy you can choose from:

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Dynamic Bids: This means that Amazon will automatically raise your bid in real-time when your ad may be more likely to convert to a sale, and Amazon will automatically lower your bid when less likely to convert to a sale.

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Fixed Bids: this means that you will set a fixed $ bid amount for a keyword. Amazon will not automatically lower or raise your bid for you.

You can also select the keyword targeting:

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Automatic: Amazon will target keywords and products that are similar to the product you are advertising.

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ManualYou do the homework and target the most relevant keywords for a product. As a new seller, these are likely to be keywords that are generating good sales for your competitors. Using the Helium 10 Cerebro tool, you can do Amazon keyword research.

helium 10 - best amazon keyword research tool

Measuring Ad Success

How to Monitor Amazon Ads

Monitoring your campaigns is a must! To get good ad data you need to run your ads for at least 4 weeks. If you track your ad performance, you can:

Track essential metrics like Click-Through Rate (CTR), conversion rate.
Work out Total Advertising Cost of Sales (TACoS) – Amazon Ads terminology for return on investment.
See which keywords are converting more customers.
Stay alert to ad positioning and if there are certain on page positions that convert better (e.g., related products or customer also bought)
Be dynamic and control ad spend (start and stop campaigns) based on the above metrics.
Pro Tip: A robust conversion rate for Amazon Ads is around 10-15%. if you’re getting high click-through rates but low conversion, then this may be an indication that your PPC ads are effective but your product listings need optimization.
Helium 10 - amazon listing software

Calculating TACoS

You can calculate TACoS easily. Just divide your total ad spend by your total sales revenue and then multiply that by 100.

how to calculate amazon ads cost
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Low TACoS: If your TACoS is decreasing over time, then it means you are getting better conversions AND possibly more organic sales. This is good news, and you should pay attention to what is working. Especially if you plan on scaling.

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High TACoS: If your TACoS is increasing, this generally indicates that your ads are not driving steady conversions or organic sales. You should act fast to optimize Amazon ads, campaigns, or product listings.

Pro Tip: Paying attention to TACoS is a good thing. But there are certain categories (e.g., toiletries, food, supplements) using “Subscribe and Save” where sellers are willing to accept high TACoS in return for long-term customers with ongoing recurring revenue.

Amazon PPC optimization – The Winning Play

Paying attention to ad performance and ad budget is important. But if things aren’t going right you need to be responsive and change your strategy.

How to Optimize Amazon PPC campaigns

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Experiment with various ad creatives, copy, and targeting options – fine-tuning to find what works for your products and customers.

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Leverage Amazon Analytics to gain insights into customer behavior – knowledge is power!

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Increase your bids on strong-performing keywords, whilst pausing or lowering bids on keywords that aren’t converting.

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Target an advertising position that converts better for your product.

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Creating brand-based audiences is another Amazon PPC Strategy. Using keywords, interests, demographics, and purchasing behavior to target customers who are more likely to make a purchase.

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Optimize your product listings to increase conversions.

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Wrapping Up the Amazon PPC Playbook

So, there you have it –Amazon Ads, PPC strategies, and Ad optimization explained. Running a successful ad campaign on Amazon requires a strategic approach that combines effective targeting, compelling ad creatives, continuous monitoring, and regular optimization.

I hope that you are now better equipped to take on Amazon Advertising, making the most of your advertising budget and ready to beat down your TACoS!

Helium 10 - amazon listing software

At Hustle Life we love bringing you well-researched content to help you online side hustle grow into a thriving business. So that we continue to create great content without opening the site to annoying advertising, we accept affiliate payments. Thank you for using our Helium 10 affiliate links.

If you enjoy our content, please remember to like, and follow us on Facebook.

Jessica Clark Amazon FBA Expert

Jessica Clark has a passion for all things eCommerce. She’s always learning and adapting to find efficiencies and to stay competitive in a fast-paced sector.


How Much Should I Spend on Amazon PPC?

The million-dollar question! Assess your goals, competition, and budget before determining how much to spend on Amazon PPC. But even if you set your budget low (e.g., $10/day), you should expect to run a campaign over a few weeks and spend a few hundred dollars.

How Long Does It Take for Amazon Ads to Work?

Similar to building a winning team, Amazon PPC requires time to yield results. Give it a few weeks, monitor performance, and adjust your strategies accordingly.

A big mistake that many new sellers make is to “chicken out” of their advertising campaigns because of high TACoS. Don’t expect to get low TACoS right away. You need to build momentum over time. If you follow the strategies, review your analytics, and optimize, then you’re on the right track.

How Can I Improve Organic Ranking?

A better organic ranking will help you control or reduce advertising spend. The neat thing about PPC advertising on Amazon is that good CTR and good conversions will help improve your Amazon seller rank. This will naturally move your listing up to a better search page results position. So, running an optimized PPC campaign will also positively affect your Organic Rank!

Doing thorough keyword research is another proven strategy for improving organic ranking.

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