How much should I spend on Amazon PPC? While there’s no one-size-fits-all answer, there are proven benchmarks and calculations that can guide your decision. In this article, Megaficus will share practical rules of thumb, show you how to calculate a profitable ACOS, and help you allocate spend across different campaign types for maximum return.
Quick Summary
- Recommended PPC budget: A good rule of thumb is to allocate up to 35% of your total sales revenue for PPC. Start small, monitor performance, and scale based on what brings the best return.
- Calculate break-even ACOS: Divide your profit per unit by the selling price. To stay profitable, your actual ACOS should be below this threshold.
- Allocate your PPC budget by campaign type:
- Sponsored Products: 60 – 75%
- Sponsored Brands: 15 – 25%
- Sponsored Display: 5 – 10%
- Adjust daily budget based on performance: Prioritize spend on products with high CVR (e.g., 20%) and strong profit margins (e.g., 50%) to maximize ROI.
Why Budgeting Matters in Amazon PPC?
Your budget directly affects how far and how well your PPC campaigns perform. Spending too much without a clear plan can quickly use up your resources. On the other hand, spending too little limits your reach, causing poor budget management, low ROI, and missed growth chances.
It also affects your ad visibility throughout the day. If your budget runs out too early, your ads disappear during peak buying times, reducing potential conversions.
Finally, smart budgeting helps maximize conversions without overspending. By allocating more funds to high-performing keywords and adjusting for peak hours, you boost sales while keeping ad costs under control.
Factors That Influence How Much You Should Spend On Amazon PPC
When asking how much should I spend on Amazon PPC, it’s essential to evaluate multiple performance metrics and market conditions. Below are the key factors that directly impact your spend.
Click-through rate (CTR)
Amazon CTR measures how often shoppers click your ad compared to how often it’s shown, and a low CTR usually signals that your product listing or ad copy isn’t compelling. In such cases, adjusting your bid strategy or increasing your budget can improve ad visibility and click potential.
CTR = (Clicks ÷ Impressions) × 100
While an average CTR of 0.5 – 1% is generally acceptable and 2 – 3% is considered excellent, if your CTR drops below 0.5% you should reassess your creative elements and consider investing more to secure better placements.
Keyword competitiveness
Highly competitive keywords require higher bids, which can raise your overall spend. If you’re targeting broad or trending terms like “wireless headphones,” expect higher cost-per-click (CPC) rates.
To control costs, you can mix high-competition keywords with long-tail ones like “space-saving kitchen gadgets.”, which not only helps maintain visibility across broader search segments but also improves budget efficiency by targeting more specific, less competitive queries.
Quality of the product page
The performance of your Amazon PPC campaign is closely tied to how well your product page is optimized, as high-resolution images, clear bullet points, and a persuasive call-to-action all help increase conversion rates (CVR).
While the average CVR on Amazon is around 9.58%, aiming for 12–15% allows you to generate more sales with fewer clicks, which in turn maximizes the effectiveness of your ad spend.
Campaign type
Your chosen campaign type plays a major role in determining how much you should spend on Amazon PPC. Each ad type offers different benefits, costs, and levels of control over targeting:
- Sponsored Products: Sponsored Products are the most common and cost-effective. Click prices start around $0.02. This option fits sellers who want to drive traffic with a smaller budget, and you can control spending and target buyers ready to purchase.
- Sponsored Brands: Sponsored Brand Ads cost more, starting at about $0.10 per click. These ads promote multiple products and build brand awareness. If your goal is long-term growth, plan a bigger budget for this type.
- Product Display Ads: Sponsored Display Ads also start low, about $0.02 per click. They help you retarget visitors and reach a broader audience. Your spending should depend on how much you want to boost brand recall and re-engage customers.
How To Distribute Your Overall Amazon PPC Budget Wisely?
How much you should spend on Amazon PPC depends on factors like your overall goals, product margins, and growth stage, and setting a well-balanced budget helps you maintain strong visibility while avoiding unnecessary overspending.
Distribute your overall Amazon ad budget wisely
When asking how much should I spend on Amazon PPC, a good rule of thumb is to allocate around 30% to 35% of your projected monthly revenue for advertising. This range works especially well for new sellers who are actively trying to gain visibility and traction.
For example, if you’re aiming for $5,000 in monthly revenue, allocating around $1,500 or roughly $50 per day to PPC can provide a balanced and sustainable starting point, but exceeding 35% of your revenue on ad spend may begin to erode your profitability.
Organize your ad budget by campaign types
Once you’ve set the total PPC budget, the next step is to split it across different campaign types. Amazon offers three main ad formats, each with a distinct role in driving traffic and conversions:
- Sponsored Products (60% – 75%): You should allocate the largest share of your PPC budget to this ad type because it targets shoppers actively searching for similar products, allowing your listings to secure top placements and achieve higher click-through and conversion rates.
- Sponsored Brands (15% – 25%): You can use this ad type to strengthen brand recognition by showcasing your logo, headline, and multiple products in one banner, which benefits from typically lower CPCs and supports long-term brand growth.
- Sponsored Display (5% – 10%): You should dedicate a small portion of your budget to this format to remarket and reach customers both on and off Amazon, helping you expand audience reach and reinforce brand visibility across the buying journey.
Determine the break-even ACOS
Before launching ads, you should calculate your break-even ACOS to avoid losing money, which can be done by dividing profit per unit by the selling price. For example, if your product sells for $50 and costs $30, the profit is $20, making the break-even ACOS 40%.
To stay profitable, your actual Amazon ACOS should consistently stay below that 40% mark. If your ACOS rises above this threshold, it means you’re spending too much on ads relative to what you’re earning.
Adjust budgets based on goals
Your budget strategy should change as your campaign performs. You can move more funds to campaigns with high conversion rates and good ROI. At the same time, reduce or pause spending on campaigns that don’t bring profits.
It’s essential to set daily budgets based on key metrics like CVR, ROI, and profit margins. For instance, a product converting at 20% with a 50% profit margin clearly warrants a higher daily spend.
Adjust your PPC budget for seasonal shifts and market trends
When planning your PPC budget, you should account for seasonal spikes and evolving market trends, as periods like Black Friday, Prime Day and the holiday season often generate higher traffic and stronger conversion rates, making them ideal opportunities to increase ad spend.
For instance, if your product is a popular holiday gift item, ramping up your budget in November and December can significantly boost both visibility and sales, while staying flexible allows you to scale back when demand declines or competition becomes too intense.
Monitor and adjust accordingly
You should use Amazon Campaign Manager to track essential metrics such as CTR, ACOS, CVR, and overall ROAS, so you can evaluate campaign performance accurately and make timely adjustments that improve efficiency and maximize returns.
If your ACOS starts exceeding your profit margin, consider lowering bids, pausing poor-performing keywords, or refining your targeting, while conducting weekly or bi-weekly performance reviews is essential to maintain efficiency and maximize returns.
Common Amazon PPC budgeting mistakes to avoid
Even with a set budget, poor execution can lead to wasted spend and missed opportunities. Below are common pitfalls that sellers often overlook; fixing these can significantly improve your ad performance.
Poor Budget and Keyword Management
At MegaFicus, we often see sellers lose up to 30–40% of their ad spend simply because budget and targeting aren’t working together. You might spread $50/day across 10 campaigns, which means each one only gets $5, barely enough to gather meaningful data or win impressions.
Or maybe you “set and forget” your ads; two weeks later, you find one keyword has spent $120 with zero sales, while a profitable one ran out of budget halfway through each day.
Finally, if you’re bidding $2+ on a broad term like “kitchen tools,” you could end up paying for hundreds of irrelevant clicks from shoppers looking for products you don’t even sell.
The solution is to give your best opportunities the attention and budget they deserve. Instead of splitting funds thinly, concentrate on a smaller set of proven products and high-converting keywords so each campaign can run long enough to produce actionable data.
Also, make it a habit to review performance weekly, pausing or lowering bids on wasteful terms while increasing budget for the ones that drive sales. Then, use your search term reports to spot profitable long-tail keywords, which often deliver 2–3x higher conversion rates than broad matches, and add negative keywords to block irrelevant searches.
Ignoring ACOS and TACOS
From our experience working with many clients, Megaficus recommends checking ACOS and TACOS metrics at least once a week since ignoring these numbers can lead to running unprofitable ads, especially when ACOS goes beyond your profit margin, causing losses on every sale.
Overlooking negative keywords
Many advertisers fail to use negative keywords, which causes their ads to appear for irrelevant searches. This leads to wasted clicks and unnecessary spending. To fix this, regularly review your search term reports. Add unrelated terms as negatives to improve targeting and make your budget more effective.
You should review your search term reports weekly or at least every two weeks to identify irrelevant terms, then add these terms as negative keywords to continuously refine targeting and prevent wasted ad spend.
Not adjusting for seasonality
When advertisers maintain the same ad budget throughout the year, they fail to consider significant changes in buyer behavior and demand, causing missed revenue opportunities during high-traffic periods such as holidays or sales events.
Advertisers should increase their budgets during peak times to take advantage of higher demand. They can also reduce spending in slower months to minimize unnecessary costs and use their resources more efficiently.
Amazon PPC FAQs: Budget, ACOS, and ad value explained
PPC costs vary by category, ad type, and competition, ranging from as low as $0.02 to over $4 per click in niches like electronics, while a good PPC cost is one that drives profitable conversions without cutting too deeply into your margins.
A typical good ACOS falls between 15% and 25%, depending on your product’s profit margins. If your ACOS is much higher, it may signal unprofitable ads or the need to optimize your targeting and bids.
Amazon PPC costs range from $0.15 to $6 per click, depending on your product category, keyword competition, and campaign type, and high-demand niches like electronics usually cost more because of intense bidding wars.
Get Professional Help from Megaficus
In the end, there’s no general PPC budget that works for every seller; the right amount depends on your goals, margins, and market conditions. To help you stay on track and maximize returns, here’s a quick checklist to guide your budgeting decisions:
- Know your break-even ACOS before launching ads to avoid overspending.
- Balance budget distribution across Sponsored Products, Brands, and Display to match your goals.
- Track core metrics (CTR, CVR, ACOS, ROAS) weekly for timely optimizations.
- Use negative keywords to cut wasted spend and improve targeting precision.
- Adjust spend seasonally to capitalize on peak demand periods.
- Focus on high-performing products instead of spreading your budget too thin.
- Leverage long-tail keywords to reduce CPC and improve conversion rates.
- Refine product pages to boost CVR and get more out of each click.
If you’re looking to maximize ROI and stop wasting your Amazon ad spend, let Megaficus guide your next PPC campaign. The right spend, at the right time, can transform your sales performance.
