Amazon PPC Advertising Guide 2026: Sponsored Products, Brands, and Display

Key Takeaways

• 74% of Amazon sellers use Sponsored Products — the most popular ad type
• Amazon PPC is pay-per-click: you only pay when someone clicks your ad
• Second-price auction: you pay $0.01 more than the second-highest bidder
• Full-funnel approach (Products + Brands + Display) outperforms single ad type
• AI-powered tools are transforming campaign optimization in 2026

Why Amazon Advertising Matters

In 2026, selling on Amazon without advertising means falling behind. Organic reach is limited, competition is fierce, and paid ads are essential for visibility.

The advantage: Amazon shoppers have high purchase intent. They're already looking to buy.

The Three Ad Types

1. Sponsored Products

The most common Amazon ad type. Your product appears in search results and on product detail pages.

Key Features:

• Appears in search results and product pages
• Shows product image, title, price, rating
• No Brand Registry required
• Available to all sellers

Best For:

• Direct sales
• Keyword targeting
• New product launches
• Competitive conquesting

2. Sponsored Brands

Showcase your brand with logo, custom headline, and multiple products.

Formats:

• Product Collection: Logo + headline + multiple products
• Store Spotlight: Drive traffic to your Amazon Store
• Video: Autoplay video in search results

Requires: Amazon Brand Registry Best For:

• Brand awareness
• Store traffic
• New customer acquisition
• Brand defense

2025 Updates:

• AI-powered headline suggestions
• Enhanced creative editing (update video without losing data)

3. Sponsored Display

Audience-based targeting on Amazon and external sites.

Targeting Options:

• Product targeting (competitor products)
• Audience targeting (interests, behaviors)
• Retargeting (viewed your products)
• B2B targeting (Amazon Business customers)

Requires: Amazon Brand Registry for most features Best For:

• Retargeting
• Competitor conquesting
• Off-Amazon reach
• B2B sales

2025 Updates:

• AI-generated images in Ads Console
• B2B targeting options

Campaign Structure

Account Organization

Portfolio Level:

• Group campaigns by brand, category, or goal
• Set portfolio-level budgets
• Easier reporting and management

Campaign Level:

• One objective per campaign
• Daily budget setting
• Targeting type selection

Ad Group Level:

• Group related products
• Keyword/target organization
• Bid management

Recommended Structure

Campaign Type	Purpose	Targeting

Brand Defense	Protect brand searches	Brand keywords
Category	Capture category intent	Category keywords
Competitor	Conquest competitor traffic	Competitor ASINs
Auto Discovery	Find new keywords	Automatic

Targeting Strategies

Automatic vs. Manual Targeting

Automatic Targeting:

• Amazon chooses keywords/products
• Good for discovery
• Less control, often less efficient

Manual Targeting:

• You choose keywords/products
• More control
• Better for optimization

Best Practice: Start automatic to discover winning keywords, then move to manual for optimization.

Keyword Match Types

Match Type	What It Matches	Example

Broad	Related searches	"running shoes" matches "best shoes for running"
Phrase	Contains phrase	"running shoes" matches "blue running shoes"
Exact	Exact term only	"running shoes" matches only "running shoes"

Negative Keywords

Block irrelevant searches to prevent wasted spend.

Example: Selling premium headphones? Add "cheap," "budget," "free" as negatives.

Bidding Strategies

The Second-Price Auction

Bid Types

Dynamic Bids - Down Only:

• Amazon reduces bids when conversion is unlikely
• Safest option, preserves budget

Dynamic Bids - Up and Down:

• Amazon increases bids (up to 100%) when conversion is likely
• Higher spend, potentially higher sales

Fixed Bids:

• Your bid stays constant
• Maximum control

Placement Adjustments

Increase bids for premium placements:

• Top of search (first page)
• Product pages

Example: Base bid $1.00 + 50% top of search = $1.50 for top placement

Campaign Optimization

Key Metrics

Metric	What It Measures	Target

ACoS	Ad Cost of Sales	Varies by margin
ROAS	Return on Ad Spend	3x+ typically good
CTR	Click-Through Rate	0.3%+ for search
CVR	Conversion Rate	Category dependent

ACoS vs. TACoS

ACoS (Advertising Cost of Sales):

Ad Spend / Ad Revenue × 100

TACoS (Total ACoS):

Ad Spend / Total Revenue × 100

TACoS is more important — it shows advertising's impact on overall business.

Optimization Workflow

Weekly:

• Check budget pacing
• Pause losing keywords (high spend, no sales)
• Increase bids on winners
• Add negative keywords

Monthly:

• Review search term reports
• Graduate keywords from auto to manual
• Test new targeting
• Analyze competitor activity

Common Mistakes

Mistake 1: Set and Forget

Fix: Weekly optimization, at minimum.

Mistake 2: Sponsored Products Only

Missing brand building and retargeting opportunities.

Fix: Implement full-funnel approach with all three ad types.

Mistake 3: Ignoring Search Terms

The search term report reveals what customers actually search.

Fix: Review weekly, add winners as exact match, add losers as negatives.

Mistake 4: Unrealistic ACoS Targets

Aggressive ACoS targets can limit visibility and growth.

Fix: Calculate break-even ACoS based on margin, then set realistic targets.

Mistake 5: Poor Product Listings

Great ads can't save bad listings.

Fix: Optimize title, bullets, images, and A+ Content before heavy ad spend.

2026 Trends

AI-Powered Tools

Amazon is rolling out AI-powered creative tools and auto-optimization. Benefits:

• AI-generated images
• Headline suggestions
• Automated bid adjustments
• Creative testing

Expanded Reach

Sponsored Products now appear on external sites, expanding beyond Amazon's ecosystem.

Video Ads

Video format growing across all ad types. Investment in video creative pays off.

The Bottom Line

Amazon advertising in 2026 requires:

Full-funnel strategy — All three ad types working together

Continuous optimization — Weekly check-ins minimum

Data-driven decisions — Use search term and placement reports

Quality listings — Ads amplify, not fix, poor listings

AI adoption — Leverage new tools for efficiency

---

Track your Amazon advertising alongside Meta, Google, and other channels. AdBid provides unified e-commerce analytics across all your sales channels. Get started.