Mastering Amazon Advertising Campaign: From Start to Profits

Over 60% of US online product searches begin on Amazon in 2025, making Amazon Advertising a vital e-commerce tool. This guide will show you how to run profitable Amazon Advertising campaigns and boost your organic ranking for long-term success. 

An Amazon Advertising Campaign is defined as a paid marketing effort on the Amazon platform (formerly Amazon Marketing Services, or AMS) that operates using a Pay-Per-Click (PPC) model. This means sellers only incur a cost when a customer clicks on their ad, rather than simply viewing it.

The campaign system relies on an Upgraded Second-Price Auction model to determine placement. In this auction, a seller’s ad ranking and the final price paid are determined by two core factors:

1. The Bid Amount: The maximum amount the seller is willing to pay for a click.
2. Ad Relevance: Amazon incorporates the ad’s predicted performance, estimated by its expected Click-Through Rate (CTR) and Conversion Rate (CVR), into the ranking process.

This mechanism means that a highly relevant ad (one likely to convert) can win a premium placement without needing to pay its full maximum bid, or it may even outrank a slightly higher bid from a less relevant competitor.

The system uses either keyword targeting (matching search terms) or product targeting (matching competitor listings) to place ads in relevant shopping results.

What are the Benefits of Running Amazon Advertising Campaigns as a Seller?

Paid advertising campaigns are instrumental for scaling businesses within the highly competitive Amazon ecosystem.

• Gaining Immediate Product Visibility: PPC provides immediate placement at the top of search results or on competing product pages. This is especially critical for new product listings, which lack the sales history and reviews required to rank organically.
• Driving Initial Sales Velocity: Advertisements accelerate the velocity of sales, quickly signaling demand to Amazon’s algorithm. This signal is key to achieving a positive flywheel effect and improving organic rank.
• Achieving Highly Targeted Reach: Amazon’s targeting mechanisms ensure ads are placed in front of high-intent, “ready-to-buy” shoppers who are actively searching for the product or a direct competitor.
• Valuable Data Insights: Campaign performance generates detailed Search Term Reports. This data provides critical insight into the exact phrases customers use to find (and buy) the product, which is invaluable for optimizing campaign keywords and improving product listing content for organic rank.
• Clearing Overstock Inventory: Similar to promotions, focused Amazon advertising campaigns can rapidly move excess or slow-moving stock, contributing to overall inventory health.

What Are the Core Types of Amazon Advertising Campaigns for Sellers?

Amazon offers three primary Sponsored Ad formats that should be integrated into a complete sales funnel strategy.

To use Sponsored Brands or Sponsored Display, a seller must have a Professional selling plan, and the selling account must be associated with a brand enrolled in Amazon Brand Registry. Sponsored Products are typically more cost-effective, with some advertisers reporting spending 13%–79% less per click compared to alternatives.

How to Set Up Your First Amazon Advertising Campaign Step-by-Step?

Launching a foundational Amazon Advertising campaign (such as Sponsored Products with Automatic Targeting) is straightforward, provided prerequisites are met.

Step 1: Define Your Campaign Goal

Start by determining what you want to accomplish with your campaign. This could be an aggressive launch to boost visibility, a defense campaign targeting your branded keywords, or an efficiency-focused campaign that optimizes ad spend for profitability. Clear goals will guide decisions related to targeting, bidding, and budgeting.​

Step 2: Log in to Seller Central’s Campaign Manager

Go to Advertising → Campaign Manager in your Amazon Seller Central account. This is the centralized hub for creating, managing, and reviewing your advertising performance. From here, you can also manage portfolios, budgets, and historical ad data for more advanced organizations.​

Step 3: Select Campaign Type and Products to Advertise

Click Create Campaign, then choose one of Amazon’s most popular ad types. Select the ASINs (products) you wish to advertise. Consider starting with top sellers or new launches that need visibility. You can also assign your campaigns to portfolios to organize them by product line or advertising strategy, which helps maintain better control over budget caps and reporting.​

Step 4: Set Daily Budget and Choose Targeting

Set your daily budget based on how much exposure you want. Amazon recommends at least $10 per day (or regional equivalent) for consistent impressions.​

Next, select your targeting type:

• Automatic Targeting: Amazon’s algorithm automatically matches your ad with relevant search terms and products. This option is perfect for beginners and for discovering high-performing keywords.
• Manual Targeting: Experienced advertisers can upload keyword lists, adjust match types (broad, phrase, exact), and add negative keywords to fine-tune traffic quality.​

Step 5: Launch and Monitor

Choose your bidding strategy. For initial campaigns, select Dynamic Bids – Down Only, which lowers bids when conversions are less likely. This helps minimize wasteful spending during testing periods.​

Finally, click Launch Campaign. Once live, monitor early performance via key metrics such as impressions, click-through rate (CTR), conversion rate (CVR), and advertising cost of sales (ACoS). Within the first week, use data insights to refine bids, pause underperforming keywords, and scale top performers for better ROI.

What are the Best Practices for Optimizing Amazon Advertising Campaigns?

Optimization is an ongoing process driven by data analysis, focusing on converting wasteful spending into profitable traffic.

Keyword Harvesting and Sculpting

Keyword harvesting and sculpting is a good strategy for optimizing Amazon Advertising Campaigns. This data-driven refinement process, central to any successful campaign, leverages the Search Term Report (STR) to help sellers focus ad spending on profitable terms and eliminate waste.

Keyword Harvesting: Positive Keyword Optimization

Keyword harvesting is the process of mining valuable search terms from your automatic or broad campaigns and transferring them into manual campaigns for precise control.

Sellers use the STR to find high-converting search terms — those that generate sales at efficient ACoS levels. These winning terms are then promoted to Exact Match targeting in manual campaigns with higher bids to maximize visibility and profitability.​

For example, if an auto campaign shows that “lightweight waterproof backpack” has a high conversion rate, you would “harvest” that keyword into your manual campaign, applying Exact Match targeting with a higher bid. This approach enhances your ability to dominate key converting search queries instead of relying on Amazon’s algorithm to allocate impressions.​

Keyword Sculpting: Negative Keywords

Negative keyword sculpting is the defensive counterpart to keyword harvesting; it prevents wasted ad spend on irrelevant or poorly converting terms. Sellers review the STR for queries that generate clicks but no purchases and add them as Negative Exact or Negative Phrase matches to prevent ads from showing again for those searches.​

For instance, if your STR shows that “cheap travel backpack” receives many clicks but no sales, adding that as a negative keyword ensures your ads no longer trigger for shoppers looking for low-priced products. This focuses your spending on profitable audiences and reduces ACoS.​

Bidding Strategy Management

The bidding strategy must align with the campaign’s profitability goal:

ACoS Management

ACoS management is about attention and adjustment: Set clear goals, watch your data, act fast, and continually optimize. These strategies ensure you spend wisely, maximize profitability, and make Amazon ads work for your unique objectives.

Here are the most popular ACoS management strategies for Amazon ad spend, each with practical, step-by-step advice to help you take action:

1. Set Clear ACoS Targets for Each Campaign

Before launching any Amazon campaign, you must know your ACoS target. This number tells you what percentage of your sales revenue you can spend on advertising and still earn profits. It is your clear spending limit.

Find Your Break-Even ACoS: First, find your break-even ACoS. This is the point where you make zero profit. Calculate it by dividing your profit per unit by your selling price. For a product sold at $50 with $20 in profit, your break-even ACoS is 40%. You cannot spend more than this and stay profitable.

Aim for Profit: You must aim for an ACoS below your break-even number. If your break-even ACoS is 40%, aim for a goal like 25%. This lower figure is your profit-driven ACoS. Use this number to guide every single bidding decision you make.

2. Optimize Bids Proactively

You must check and adjust your campaign bids manually and often. Making small, regular changes is the best way to keep your ad spending efficient.

Lower Bids for Losses

Quickly lower the bids on keywords that spend money but generate few sales. If a keyword spent $40 and only made $20 in sales, your ACoS is too high. Drop that bid immediately, for instance, from $2.00 down to $0.75. This prevents wasted budget.

Raise Bids for Profit

Increase your bids for keywords that consistently deliver profitable sales. These are your top performers. If a keyword spent $10 and drove $100 in sales, raise the bid from $1.00 to $1.30. This ensures you capture more valuable, high-converting traffic.

FAQs about Amazon Advertising Campaign: