Amazon Sponsored Display Ads for Beginners: From Basics to Advanced Tactics 2025

Selling on Amazon and want your product to be advertised on those flashy banner ads? Well, they’re Amazon Sponsored Display Ads for you! 

Yes, it yields peak visibility and appears in front of a massive audience on Amazon marketplace as well as off-Amazon channels. But, do you know how to effectively use Sponsored display ads to work in your favour and have every ad dollar work hard for conversions? 

According to Amazon, 59% of surveyed shoppers say they are more likely to make a purchase from an ad seen on Amazon. 

As an Amazon seller, you may have various questions about Sponsored display ads and what its got to offer to you.

This article covers everything I hope you will require to supercharge your Sponsored ads and yield great results and improve your ROAS and ACOS. 

Well, here’s the beginning of your optimized sponsored ads journey!

What are Amazon Sponsored Display Ads?

Amazon Sponsored Display Ads, formerly known as Amazon Product Display Ads, are a self-service ad type that allows you to showcase your product and grow your brand on and off Amazon. For sellers looking to maximize the potential of these ads, partnering with an Amazon PPC agency can help create tailored campaigns, optimize ad spend, and ensure every ad dollar works hard for conversions. This ad type goes beyond keyword targeting, unlike other ad types like Sponsored Product Ads or Sponsored Brand Ads. If you’re still evaluating Amazon Sponsored Products vs Sponsored Brands differences, this distinction becomes critical when choosing the right Amazon PPC strategy, as Sponsored Display focuses majorly on audience behavior and buyer personas. Amazon tracks the viewer’s shopping behaviour, interests and what product listings they have previously visited.

Its the same as times you have shown interest in baking equipment and all the ads around you are about cake moulds, frosting, piping bags, etc. 

This is a strong marketing tool that gives sellers like you the ability to do precise targeting and spend ad budgets only on potential customers. 

Where do Sponsored Display ads Appear on Amazon?

Your Amazon Sponsored Display ads appear on product detail pages, search results pages, related product sections, and even on third-party apps and third-party mobile or desktop websites like Twitch, Freevee, IMDB, etc. 

It creates a top-of-the-mind awareness of your product for customers anytime they are ready to purchase a similar product. 

Pro tip- Make use of Amazon’s auto-generated ad creatives to also create ad campaigns. 

Features of Amazon Sponsored Product Display Ads

Amazon Sponsored Display ads come with a lot of perks. Let’s look into them. 

1. Various targeting options

Amazon Audiences

Amazon allows you to tap into its own audience and get your products and brand before a global audience. Amazon has accumulated its pre-set audience based on four main categories that are built and curated by Amazon PPC Ads using various first-party shopping, streaming, and entertainment insights.

Views remarketing

Views remarketing (also known as Amazon retargeting ads) offers a way to re-engage audiences that once showed interest in your product or products similar to yours. You can seamlessly reintroduce your brand to recover missed sales opportunities and expect potential conversions. 

Purchase remarketing

Here, you can build CLV (Customer lifetime value), improve repeat purchases, build customer loyalty, and cross-sell to existing customers based on historical purchase behaviour.

2. Cost-Effective Amazon Advertising Model

Display ads having a CPC model, you only have to pay when someone clicks on your ad. You can improve your CTR (Click-through rate) by targeting the right audiences to avoid unnecessary ad spend. 

3. Raise brand awareness and Product Visibility

The perk about running Display ads is that Amazon can place your ad absolutely anywhere. Say you had a product launch and you spot your product on Amazon’s homepage. Imagine the kind of impression you can get from that. Insights from Amazon Brand lift case studies demonstrate how Sponsored Display Ads have helped brands achieve significant increases in visibility and customer engagement, making them a powerful tool for building awareness.

You can experience a drastic improvement in heightened product visibility across your entire product catalogue. 

4. Dynamic Segments

Dynamic segments allow you to dynamically target those products that are similar to the ones that are already being advertised. It’s also referred to as “Similar Product Targeting” which is quite self-explanatory. 

You can effortlessly target popular detail pages of other similar and complementary products and have it work in your favour. 

When and why should Amazon Sponsored display ads be used over other ad options?

Attributes	Sponsored Products	Sponsored Brands	Sponsored Display
Purpose	Drive sales for individual products.	– Improve brand awareness – Boost traffic	– Build brand awareness – Retarget customers with exclusive analytics tools.
Targeting	– Keywords – Product ASINs – Categories	– Keywords – Product ASINs – Categories	– Audience behavior, views, and interests. – Products ASINs – Categories
Audience	On-Amazon	On-Amazon	On and off-Amazon audiences, including those browsing similar or complementary products.
Ad placement	– Search results page. – Product detail pages.	– Top of search results page. – Product detail pages. – Brand Store.	– Product detail pages. – Search results pages. – Amazon home page. – Third-party websites and apps
Ad format	– Product image – Price – Rating	– Custom headline. – Logo. – Product carousel.	– Dynamic ad creatives, images, pricing, etc.
Ideal user	– Driving product-specific sales. – Targeting specific search queries.	– Building brand awareness. – Promoting product portfolios.	– Retargeting potential customers. – Expanding audience reach. – Boosting conversions dynamically.
Cost structure	CPC	CPC	CPC and CPM
Retargeting Option	No	No	Yes

What if my inventory hits zero, but I keep getting charged for clicks?

This is a common scenario sellers face while running Sponsored display campaigns. Simply set up Inventory and Amazon Advertising Campaign Management Alerts in your Amazon Seller Central account. Alternatively, sellers can leverage Amazon account management services to handle inventory tracking, campaign adjustments, and overall account optimization. These services ensure that your campaigns remain cost-effective and aligned with your business goals, even during high-demand periods.

Additionally, Amazon allows you to automatically pause PPC ads for products that go out of stock by enabling the Campaign Status Adjustment Based on Inventory feature in your campaign settings. This prevents unnecessary ad spend when inventory hits zero.

Finally, regularly monitor your campaign performance and stock levels to always stay on top of your Amazon advertising game and ensure cost-effective ad spend. 

How to set up an Amazon Sponsored Display Ad?

1. Head over to “Campaign Manager” by hovering on “Advertising” on your Amazon Seller Central dashboard. 

2. Select “Sponsored Display” among the other Ad targeting options. 

3. Next, give your campaign a name and set your start and end date. Keep a straightforward name so you can easily track it later on.

4. Then, pick your daily budget. According to common practices among Amazon sellers:

• Smaller Sellers: Start with $20–$50 daily and scale up based on ROAS (Return on Ad Spend).
• Experienced Sellers: Budget between $50–$100 for consistent campaigns, especially in competitive niches like supplements, beauty etc. 
• Peak Seasons (e.g., Black Friday, Prime Day): Allocate $100–$300+ daily to maximize visibility during high-traffic periods.

5. Pick your choice of ad format that you want to advertise, between image and video.

Pro tip- Use images to showcase static product details. A crisp image can act as a reminder to retarget customers or grasp the viewer’s attention and boost brand engagement.
Use videos to show complex features or usage demonstrations for a better understanding for the viewers. 

6. Pick the products you want to advertise and allow Amazon to dynamically shuffle them and show the one that has the best chance at converting. 

7. Pick your choice of targeting option that best suits your business needs. 

Contextual targeting

This type of targeting refers to the characteristic similarities between your products and the others while customers are actively browsing.

Contextual advertising allows you to track these viewers on a more granular level on basis of price, brand and prime eligibility.

Audiences targeting

In audience targeting, you can target beyond keywords and products and primarily focus on audience behaviour. It targets folks that have shown prior interest in your products or products similar to yours. This approach works exceptionally well when planning your product launch on Amazon or during brand announcements, as Sponsored Display Ads help build awareness among high-intent audiences before you even start ranking organically.

8. Here, choose a bidding strategy that aligns with the purpose of your ads. 

Optimize Reach

This bid optimization type has the potential to drastically increase your impressions and lower the click through rate. 

Optimize Page Visit

Here, you can experience a high click through rate as this option improves your product visibility, getting more people interested in what you have to offer. 

Optimize Conversions

It is recommended to use this option on your very first campaign, as it would help drive sales from new and existing customers. 

9. Finally, set the bid amount you are willing to spend and be ready to get your ad up and running!

What should my bid optimization look like while running Sponsored Display ads?

Amazon offers two options, CPC (cost per click) or vCPM (cost per thousand impressions) pricing models. It is recommended to start with the $1 default bid for CPC campaigns and $5 default bid for vCPM campaigns, and later adjust based on your ads performance.

The recommended daily budget for the top 10 categories is here below. However, keep them flexible and adjust based on competition, campaign performance and goals.

Category	Recommended Daily Budget
Electronics	$50–$150
Health & Personal Care	$40–$100
Beauty & Skincare	$50–$120
Home & Kitchen	$30–$80
Toys & Games	$25–$70
Clothing, Shoes & Accessories	$40–$100
Sports & Outdoors	$30–$70
Books	$15–$50
Pet Supplies	$25–$60
Grocery & Gourmet Food	$30–$75

How do I Improve my ROAS with Amazon Sponsored Display Ads? 

Segment your audience for better audience targeting

Segment your audience based on purchase history, interests or demographics to make sure your ad dollars are working hard for every single click. 

Run ads on 10 ASINs at the same time

Its a simple bet. The more ASINs you put out there, better the engagement and conversion potential. 

Retarget Customers with Promotions

Use Sponsored Display Ads to retarget past customers or those who abandoned carts with special offers like BOGO discounts/promotions or bundle deals.

For example, you can give something like, “10% Off Your Next Purchase. Shop Now!” for customers who previously viewed your listing.

Stack Sponsored Display with Other Ad Types

Sponsored Display Ads are more effective when part of a multi-campaign Amazon advertising strategy. Pair them with Sponsored Brands for awareness and Sponsored Products for conversions.

For example, use Sponsored Display to retarget shoppers who clicked on your Sponsored Brand Ad but didn’t purchase.

Make use of AI Image Generation (Beta) when in need

Amazon gives you the opportunity to generate your own custom AI image based on accurate prompts. You can use these images to expand your reach and Sponsored display ad performance across Amazon, websites and apps. 

With the use of this tool, advertisers selling in the US who use Sponsored Display branded creative see a 13.6% higher return on ad spend (ROAS) on average.

Monitor and Adjust Based on ACoS and ROAS

Track your campaign’s performance metrics, especially ACoS (Advertising Cost of Sale) and ROAS (Return on Ad Spend). Test new creatives as and when required. With better returns, experiment with ad formats like custom creatives to enhance engagement and further boost your ROAS.

High ACoS signals you to lower your bids to reduce costs and test which audiences convert best. Experiment with ad formats, be it images or videos and pause the ads that are under-performing. Use A/B testing to understand what works best for your individual campaign and ensure your ad spend is being used effectively. one of the best ad format to increase ACos is going for the amazon headline search ads.

ACOS Calculator can come handy to take a quick peak at your ACOS at any point.

Low ACoS or high ROAS means that you need to increase bids slightly to maximize visibility and maintain strong returns.

Wrapping Up,

We’ve come to an end to all the learning about Amazon sponsored display ads and everything you need to know to make your work easier. With the right approach, some ground-work and strategies, you can boost conversions and improve your Amazon profitability!