Amazon Advertising is Amazon’s platform for paid product and brand promotion. Sellers, vendors, and brands bid to place ads across Amazon’s search results, product pages, streaming services, and partner sites. Most formats charge per click, so you pay only when a shopper clicks your ad.
That definition covers what the platform was in 2019. It no longer covers what it is.
Amazon’s advertising business brought in $68.63 billion in 2025, up from $56.22 billion the year before. Q4 alone was $21.3 billion, a 22% jump year over year. That growth isn’t coming from search ads. It’s coming from Prime Video, streaming, audio, programmatic, and now conversational shopping assistants.
Most guides still describe Amazon ads as three sponsored formats in a search bar. At Sequence Commerce we manage Amazon ad accounts across dozens of brands, and the surface map matters more each year.
By the end of this guide you’ll know every place your ad can appear, how the auction picks winners, what it costs to start, and whether it’s worth doing at all.
What Is Amazon Advertising?
Amazon Advertising is a self service and managed advertising platform that lets brands pay for visibility across Amazon’s properties. It runs on an auction. You set a bid, Amazon decides which ads to show, and you’re charged when someone clicks.
The platform exists because organic visibility on Amazon has become difficult. Amazon accounted for more than 75% of all US retail media ad spending in 2025, on a 40.6% share of US ecommerce sales, according to eMarketer. When that much money moves through one auction, unadvertised products get buried.
What separates advertising on Amazon from Google or Meta is the data underneath it. Amazon knows what people bought, not just what they clicked. That first party purchase history feeds targeting and measurement in a way no other ad platform can match.
Amazon Advertising vs Amazon PPC vs AMS
These three terms get used interchangeably, and the confusion trips up a lot of new advertisers.
Amazon Advertising is the platform. It’s the official name, sometimes shortened to Amazon Ads.
Amazon PPC is a pricing model, not a platform. PPC stands for pay per click. Most Amazon ad formats use it, but not all. DSP campaigns often run on cost per thousand impressions instead. So every Amazon PPC campaign is Amazon Advertising, but not every Amazon Advertising campaign is PPC.
AMS stands for Amazon Marketing Services. It’s the old name. Amazon consolidated its ad tools under the Amazon Advertising brand back in 2018, but the term stuck around in seller forums and older articles. If you see AMS referenced anywhere, it means the same thing as Amazon Ads today.
You’ll also see the Amazon advertising platform called the Advertising Console. That’s the interface where campaigns get built and managed.
Who Can Advertise on Amazon
Not every account type gets access to every format.
Professional sellers on Seller Central can run Sponsored Products immediately. No brand registration required. Individual plan sellers can’t advertise at all, so the $39.99 monthly Professional plan is the entry point.
Brand Registry enrolled sellers unlock Sponsored Brands and Sponsored Display. Brand Registry requires an active registered trademark. This is the single biggest gate between a new seller and the full format lineup.
Vendors on Vendor Central get access to the same sponsored formats plus additional placements.
Any brand or agency can access Amazon DSP, including companies that don’t sell on Amazon at all. DSP buys Amazon audience data to run ads on third party sites.
If you’re setting up an account for the first time, our Amazon Seller Central guide covers registration. For managed campaign work, our Amazon advertising management team runs accounts end to end.
How Amazon Ads Work: The Auction
Every ad placement on Amazon is decided by an auction that runs in real time. A shopper types a query, Amazon identifies every eligible advertiser, ranks them, and fills the ad slots. The whole thing takes milliseconds.
Understanding this one mechanism explains most of what confuses new advertisers, including why a high bid sometimes loses and why costs move without any change on your end.
How the Auction Runs
When a shopper searches, Amazon pulls every ad that could match. Eligibility depends on your targeting, your budget status, and whether your product is in stock and winning the Buy Box.
Out of stock products don’t serve ads. Products that have lost the Buy Box to another seller usually don’t either. This catches people out constantly. Campaigns look like they’ve stopped working when the real problem is inventory or a pricing issue on the listing.
From the eligible pool, Amazon ranks the ads and assigns them to available slots. Top of search slots go to the strongest candidates. Rest of search and product page slots fill from there.
What Determines Whether Your Ad Wins
Your bid is one input. It isn’t the only one, and it usually isn’t the deciding one.
Bid is the maximum you’re willing to pay for a click. It sets your ceiling.
Relevance is how closely your product matches the query. A product that genuinely answers the search gets favored over one that’s loosely connected. Relevance comes from your listing, so title, bullets, backend terms, and category all feed into it.
Expected conversion is Amazon’s read on whether a click will turn into a sale. Products with strong conversion history, good reviews, competitive pricing, and Prime eligibility carry an advantage here.
The practical effect is that a well converting product with a modest bid regularly beats a poorly converting product with an aggressive one. Amazon makes money when the sale happens, not when the click happens. The auction is built around that.
This is also why listing quality and ad performance can’t be separated. If conversion is weak, no bid adjustment fixes it. Our listing services team works on that side specifically.
What You Actually Pay
Amazon runs a second price auction. You’re charged just enough to beat the next competitor, not your full bid.
If you bid $2.00 and the advertiser below you effectively bid $1.20, you pay somewhere around $1.21. You never pay more than your maximum, and you often pay noticeably less.
That’s why average cost per click sits below what most advertisers set as their bid. It also means raising a bid doesn’t automatically raise your costs by the same amount. It raises your ceiling, and the auction decides the rest.
Not sure whether your account is losing money in the auction or on the listing? Get a free Amazon ad account audit from Sequence Commerce →
Where Your Ads Appear in 2026
This is where most explanations of Amazon Advertising are years out of date. The platform used to be search results and product pages. It’s now a full media network.
Amazon added more than $12 billion in incremental revenue from its full funnel strategy in 2025, according to CFO Brian Olsavsky. That figure exists because the inventory expanded well beyond the marketplace.
Still the core. Sponsored Products appear in search results and on competitor product pages. Sponsored Brands sit at the top of search with a logo, headline, and multiple products. Sponsored Display runs across product pages and off site.
This is where the majority of ads spend lives and where most sellers should start.
Streaming and Video
Prime Video became an ad supported service two years ago and has grown fast. Its ad supported audience reached 315 million viewers in Q4 2025, and CEO Andy Jassy said the streamer contributed meaningfully to ad revenue that quarter. Amazon is expanding Prime Video ads into Belgium, Denmark, Norway, and Turkey during 2026.
Sponsored TV lets brands run video ads on Fire TV and streaming inventory with self service access. Twitch adds live streaming placements.
Video used to be a big brand format. Self service access and Amazon’s Creative Studio video generator changed that. Our streaming TV ads guide and video advertising service cover this in depth.
Audio and Twitch
Amazon serves audio ads across Amazon Music’s ad supported tier, Alexa enabled devices, and Twitch. These are non skippable audio spots aimed at reach rather than direct response.
Audio suits brand building more than immediate conversion. Details are in our Amazon audio advertising guide.
Off Amazon Through DSP
Amazon DSP is the programmatic platform. It buys display and video inventory across third party sites and apps using Amazon’s shopper data for targeting.
DSP is the only part of the platform open to companies that don’t sell on Amazon. A brand selling exclusively through its own site can still buy Amazon audiences. Our DSP agency page covers how that works.
Conversational Surfaces
This is the newest and least documented placement.
Amazon has moved sponsored ads into Rufus, its AI shopping assistant, and is migrating those capabilities into Alexa for Shopping. Alexa brings signals Rufus doesn’t have, including recipe searches and music preferences, which feed relevance.
Early results reported by eMarketer are striking. Almost 20% of shoppers who interact with a sponsored prompt keep talking about that brand. Around 70% of those who buy after clicking a sponsored prompt are new to the brand.
That second number is an interesting one. Conversational placements are behaving like a discovery channel, not a retargeting one. Amazon is also exploring serving ads inside third party chatbots.
Almost no advertiser has a budget allocated here yet. That gap tends not to last.
The Amazon Ad Formats
Four formats cover the vast majority of Amazon ad spend. Here’s what each one is and who can use it.
| Format | What it does | Requirement | Best for | |
|---|---|---|---|---|
| Sponsored Products | Promotes single products in search and on product pages | Professional seller account | Direct sales, every seller’s starting point | |
| Sponsored Brands | Logo, headline, and multiple products at the top of search | Brand Registry | Brand awareness, catalog promotion | |
| Sponsored Display | Retargeting and audience ads on and off Amazon | Brand Registry or vendor | Re engaging shoppers, competitor targeting | |
| Amazon DSP | Programmatic display and video across the web | Available to any advertiser | Full funnel reach, audience buying |
Sponsored Products
The workhorse format. It promotes individual products in search results and on product detail pages, and the ad looks close to an organic listing.
Sponsored Products is available to any Professional seller with no brand registration needed, which makes it the default entry point. It’s also the format most likely to produce measurable sales quickly, because it reaches shoppers already searching for something specific.
Sponsored Brands
A banner style placement at the top of search results showing your logo, a custom headline, and up to three products. Variants include video and Store Spotlight, which drives traffic to your Amazon Store.
Sponsored Brands requires Brand Registry. It’s built for visibility and brand recall rather than immediate conversion, so measuring it purely on same session sales undersells it.
Our guide on Sponsored Products vs Sponsored Brands compares the two in detail.
Display Ads
Display ads reaches shoppers based on behavior rather than a live search. It can retarget people who viewed your product, target audiences by interest, or place your ad on specific competitor listings.
It runs both on Amazon and across third party sites, which makes it the bridge between sponsored ads and programmatic.
Amazon DSP
The programmatic platform for display, video, and audio inventory across the open web. DSP uses Amazon’s shopper data for targeting and connects to Amazon Marketing Cloud for measurement.
DSP historically required managed service and significant minimum spend. Self service access has widened considerably. It remains the most complex part of the platform and the one most likely to need specialist management.
How Amazon Campaigns Are Structured
Every Amazon ad account uses the same three level hierarchy. Getting this right early prevents most reporting headaches later.
Portfolios, Campaigns, and Ad Groups
Portfolios sit at the top. They’re folders that group campaigns, usually by brand, product line, or objective. Portfolios can carry their own budget caps.
Campaigns hold the budget, the start and end dates, the targeting type, and the bidding strategy. The budget is set here, which means campaign structure directly determines where your money can go.
Ad groups live inside campaigns and contain the actual products and targets. Keywords, product targets, and bids all sit at ad group level.
The rule that matters: keep products within an ad group similar to each other. An ad group mixing a $12 accessory with a $200 flagship product will produce data you can’t act on, because the two products need completely different bids to hit the same efficiency.
Automatic vs Manual Targeting
Automatic targeting hands keyword and product selection to Amazon. The algorithm matches your ad to queries based on your listing content. You set a bid and Amazon decides where to serve.
Manual targeting puts you in control. You choose the keywords or products to target and set individual bids for each.
Neither is better in the abstract. Automatic campaigns surface search terms you wouldn’t have guessed, which is genuinely useful early on. Manual campaigns give precision once you know what converts. Most mature accounts run both.
Creating Your First Campaign
The path through the console is short:
- Log into Seller Central and open Advertising, then Campaign Manager
- Select Create Campaign and choose your format
- Name the campaign using a consistent convention so reporting stays readable
- Set your daily budget and campaign duration
- Choose automatic or manual targeting
- Add products to the ad group and set your starting bid
- Launch
Give any new campaign at least two weeks before judging it. Amazon needs volume before the data means anything, and early performance is often unrepresentative.
Targeting and Match Types
Targeting is how you tell Amazon which shoppers should see your ad. There are two families: keyword targeting and product targeting.
Keyword Targeting and the Three Match Types
Keyword targeting shows your ad when a shopper searches a term you’ve chosen. Match type controls how loosely Amazon interprets that term.
Exact match serves only when the search closely matches your keyword, allowing for plurals and minor misspellings. Tightest control, lowest reach.
Phrase match serves when the search contains your keyword in order, with words allowed before or after. A phrase match on “running shoes” can serve for “mens running shoes.”
Broad match serves for related searches including synonyms and variations, in any order. Widest reach, least control, and the match type most likely to spend on irrelevant traffic.
Match type is a control, not a strategy. Which keywords deserve which match type depends on your data. Our keyword research guide covers how to find the terms in the first place.
Product and Category Targeting
Instead of keywords, you can target products and categories directly.
ASIN targeting places your ad on specific product detail pages. Advertisers use it to appear on competitor listings or alongside complementary products.
Category targeting serves your ad across an entire product category, with optional filters for price range, star rating, or brand.
Product targeting reaches shoppers at a different moment than keyword targeting. They’re already looking at a product, which means they’re further along and comparing options.
Negative Keywords
Negative keywords stop your ad from serving on specific searches. They exist to prevent waste.
If you sell sugar free syrup, you don’t want clicks from people searching for regular syrup. A negative keyword blocks that.
Negative exact blocks one specific term. A negative phrase blocks any search containing that phrase.
Negatives are the most neglected control in most new accounts. Ads run for months on searches that could never convert, and nobody checks.
Budgets and Bids
These two controls decide how much you spend and how competitively you compete. They’re often confused.
How Daily Budgets Work
Daily budget is the maximum a campaign can spend in a day. Amazon paces spend across the day but can exceed the daily figure on high traffic days, then balance it out across the month.
When a campaign exhausts its budget, ads stop serving until the next day. This is worth watching. A campaign that runs out at 11am misses every afternoon and evening shopper for the rest of the day, which is often when conversion is strongest.
Budget caps also apply at portfolio level if you set them there.
The Bid Types and What Each Does
Amazon offers three bidding strategies:
Dynamic bids, down only lowers your bid in real time when Amazon predicts a click is less likely to convert. It never raises your bid. This is the most conservative option.
Dynamic bids, up and down raises your bid by up to 100% when conversion looks likely, and lowers it when it doesn’t. More aggressive and more volatile.
Fixed bids uses your exact bid every time with no adjustment. Full manual control.
Each behaves differently in the auction. Which one suits a given campaign depends on maturity, margin, and goal, which is optimization territory rather than mechanics.
Placement Adjustments
Amazon serves ads in three placement groups: top of search, rest of search, and product pages. You can apply a percentage multiplier to bids in each group.
A 50% adjustment on top of search means you’ll bid 50% higher for those slots specifically. Top of search typically converts best and costs most.
Placement adjustments are one of the highest impact levers in the account. They’re also easy to get wrong, because the right multiplier is entirely dependent on your own placement report data.
Running campaigns and not sure where spend is leaking? Talk to our Amazon advertising team →
Measuring Performance
Amazon gives advertisers more data than most know what to do with. Three metrics carry the most weight.
ACoS, TACoS, and ROAS Explained
ACoS is the Advertising Cost of Sales. The formula is ad spend divided by ad attributed revenue, expressed as a percentage. An ACoS of 25% means you spent $25 in ads for every $100 in ad driven sales. Lower means more efficient.
TACoS is Total Advertising Cost of Sales. Ad spend divided by total revenue, including organic sales. TACoS shows whether advertising is building a business or just renting sales. Falling TACoS alongside rising revenue means organic is growing, which is the healthiest pattern in the account.
ROAS is Return on Ad Spend. Ad revenue divided by ad spend, expressed as a multiple. A ROAS of 4 means $4 back for every $1 in. It’s the inverse of ACoS and the two say the same thing in different units.
Use our ACoS calculator, ROAS calculator, and target ACoS calculator to run your own numbers.
The Reports That Matter
Three reports carry most of the signal:
Search term report shows the actual queries that triggered your ads, as opposed to the keywords you targeted. This is where wasted spend becomes visible and where new keyword ideas come from.
Placement report breaks performance down by top of search, rest of search, and product pages. It’s the input for placement adjustments.
The budget report shows how often campaigns ran out of budget and what that cost in missed impressions.
What Good Looks Like
There’s no universal target. A product with a 60% gross margin can sustain an ACoS that would bankrupt a product running at 20%.
The right starting point is your break even ACoS, which equals your gross margin percentage. Above that, ads lose money on the first purchase. Below it, they profit.
Whether losing money on the first purchase is acceptable depends on repeat purchase rate and customer lifetime value. For category level benchmark data, our Amazon advertising statistics page carries current figures.
How Much Does Amazon Advertising Cost?
There’s no fixed price. You control spend through bids and budgets, and the auction decides the rest.
The CPC Model and Minimum Spend
Sponsored ads have no minimum spend requirement. Amazon’s own guidance is that campaigns can start with budgets as low as $10 a day.
You’re charged only when someone clicks. Impressions are free. And because of the second price auction, you’re never charged more than your bid and usually pay less.
That structure makes Amazon Advertising unusually accessible. A seller can test with $300 a month and get usable data. The cost that actually matters isn’t the ad spend, it’s the ad spend that produces nothing because the underlying listing wasn’t ready.
The one fixed cost is the $39.99 monthly Professional seller plan, which is required for advertising access.
What Drives Your Cost Up or Down
Four factors move cost per click more than anything else:
Category competition. Crowded categories cost more. Supplements and electronics run considerably higher than niche categories.
Listing conversion rate. Better converting products win auctions at lower bids, because Amazon expects the click to produce a sale.
Seasonality. Q4 pushes costs up sharply. Prime Day and Black Friday are the peak.
Ad format. Sponsored Products and DSP price differently, and DSP often runs on impressions rather than clicks.
Our CPC calculator will estimate campaign costs against your own numbers.
Is Amazon Advertising Worth It?
For most brands selling on Amazon, yes. But the honest answer includes conditions, and the conditions matter more than the headline.
When It Pays Off
Advertising works best when the product is already capable of converting. Specifically:
- Your listing has strong images, clear bullets, and a competitive price
- You have enough reviews that shoppers trust the product, generally 15 or more
- Your margin can absorb the ad cost with room left
- You’re in stock and winning the Buy Box consistently
When those are true, advertising is close to the most reliable growth lever available on Amazon. Shopper intent is already high, and you’re paying to be visible at the exact moment of a purchase decision.
When It Doesn’t
Advertising amplifies whatever your listing already does. If the listing converts poorly, ads make you lose money faster.
The clearest cases where advertising isn’t worth starting yet:
- Gross margin under roughly 20%, leaving nothing to spend
- Fewer than 10 reviews, or an average rating below 3.5 stars
- Product is out of stock or losing the Buy Box regularly
- Listing images and copy haven’t been optimized
In practice, the thing that breaks first when brands advertise too early is almost always the review base. Traffic arrives, shoppers compare against established competitors with hundreds of reviews, and the click converts for someone else. The ad spend paid to send a customer to a competitor.
Fixing the listing first is cheaper than advertising through the problem. Our product launch service and Vine program management both address the review side directly.
The Organic Ranking Effect
Ads don’t directly improve organic rank, but they influence it indirectly.
Amazon’s ranking algorithm rewards sales velocity and conversion rate. Ad driven sales count toward both. A product that sells well through advertising builds the performance history that improves organic position.
This is the argument for tolerating a higher ACoS during a launch. The spend buys velocity, velocity buys rank, and rank eventually reduces dependence on ads. TACoS is the metric that shows whether it’s working.
Common Mistakes New Advertisers Make
Five errors account for most wasted spend in new accounts.
Advertising a listing that isn’t ready
The most expensive mistake by a wide margin. Ads send traffic to whatever you have. If the listing can’t convert, the money’s gone.
Never adding negative keywords
Campaigns run for months on searches that could never produce a sale. A monthly search term report review prevents it.
Judging performance too early
Two weeks minimum before drawing conclusions. Amazon needs volume before the data stabilizes, and early numbers are frequently misleading in both directions.
Putting everything in one campaign
Mixing unrelated products in a single campaign means one budget serves all of them, and you can’t tell what’s working. Structure by product type or margin band instead.
Watching ACoS and ignoring TACoS
ACoS alone can look great while total business growth is flat. TACoS shows whether advertising is building something or just moving sales from organic to paid.
Running campaigns already and looking to improve results rather than understand the basics? Our Amazon advertising strategy guide covers optimization, campaign architecture, and scaling.
Conclusion
Amazon Advertising stopped being a search ad platform and became a full media network. The auction still works the same way, and Sponsored Products still carries most of the volume. What changed is everything around it: Prime Video reaching 315 million ad supported viewers, self service streaming inventory, and sponsored placements inside AI shopping assistants where roughly 70% of buyers are new to the brand.
The fundamentals haven’t moved. Relevance and conversion decide the auction, listing quality decides both, and TACoS tells you whether any of it is building a business.
Sequence Commerce manages Amazon advertising for brands across dozens of categories, and the pattern is consistent. The accounts that scale are the ones where the listing was ready before the budget arrived.
If you want a clear read on whether your account is losing money in the auction or on the listing, get a free Amazon advertising audit from Sequence Commerce →
Frequently Asked Questions
What is Amazon Advertising?
Amazon Advertising is Amazon’s paid promotion platform for sellers, vendors, and brands. It runs an auction across search results, product pages, Prime Video, audio, and third party sites. Most formats charge per click, so advertisers pay only when a shopper clicks. It was previously called Amazon Marketing Services, or AMS.
How Does Amazon Advertising Work?
Amazon runs a real time auction for every ad placement. When a shopper searches, Amazon ranks eligible ads using your bid, how relevant your product is to the query, and how likely the click is to convert. It’s a second price auction, so you’re charged just enough to beat the next advertiser rather than your full bid.
What Types of Amazon Ads Are Available?
Four main formats. Sponsored Products promotes individual items in search and on product pages. Sponsored Brands shows your logo and multiple products at the top of search. Sponsored Display handles retargeting on and off Amazon. Amazon DSP buys programmatic displays and videos across the web. Sponsored TV and audio ads extend into streaming.
How Much Does Amazon Advertising Cost?
There’s no minimum spend for sponsored ads, and Amazon’s guidance is that campaigns can start around $10 a day. You’re charged per click, never more than your bid, and usually less because of the second price auction. Cost per click varies by category, competition, listing quality, and season.
Is Amazon Advertising Worth It for Small Sellers?
It can be, but only once the listing is ready. Advertising amplifies existing conversion performance rather than creating it. Sellers with at least 15 reviews, a rating above 3.5 stars, gross margin above roughly 20%, and reliable stock generally see returns. Below those thresholds, fixing the listing comes first.
Do I Need a Brand Registry to Advertise on Amazon?
Not for Sponsored Products, which any Professional seller can run. Sponsored Brands and Sponsored Display both require Amazon Brand Registry, which needs an active registered trademark. Amazon DSP is available to any advertiser, including brands that don’t sell on Amazon at all.
What’s the Difference Between Amazon Advertising and Amazon PPC?
Amazon Advertising is the platform. Amazon PPC describes the pricing model, where you pay per click. Most Amazon ad formats use PPC, but not all. DSP campaigns frequently price on impressions instead. So every Amazon PPC campaign is Amazon Advertising, but not every Amazon Advertising campaign is PPC.
Jake Gilbert serves as the Chief Revenue Officer (CRO) at Sequence Commerce, where he spearheads all lead generation initiatives and drives the agency’s growth strategy. With a keen analytical mindset, Jake transforms complex marketplace data into actionable insights that deliver measurable results for clients. His expertise spans conversion rate optimization, customer acquisition funnels, and performance marketing specifically tailored to Amazon and e-commerce ecosystems.
At Sequence Commerce, Jake has developed proprietary reporting frameworks that accurately track and attribute revenue across multiple marketing channels, allowing clients to optimize their ad spend with precision. His data-driven approach to revenue optimization has helped numerous brands scale their Amazon presence while maintaining profitable growth metrics. Jake regularly analyzes emerging marketplace trends and platform algorithm changes to refine client strategies and maintain competitive advantages in the increasingly complex e-commerce landscape.
Before joining Sequence Commerce, Jake built successful sales operations for SaaS companies targeting the e-commerce sector, giving him unique insights into both the technical and strategic aspects of online selling. He holds certifications in advanced analytics and digital marketing, and frequently shares his expertise through the Sequence Commerce blog and industry webinars.