Amazon PPC: How to Set Up and Run Profitable Ad Campaigns

Updated: March 2026

Amazon PPC (Pay-Per-Click) is the fastest way to get your products in front of shoppers who are ready to buy. You choose which products to advertise, set a budget, and only pay when someone clicks on your ad. When set up correctly, PPC drives immediate visibility, increases sales velocity, and strengthens your organic ranking over time. This guide covers the three Amazon ad types, how to structure your campaigns, what a good ACOS looks like, and the most common mistakes we see when auditing seller accounts.

What Is Amazon PPC and How Does It Work?

Amazon PPC is Amazon’s advertising platform for sellers and vendors. It works on an auction model: you bid on keywords or product targets, and Amazon shows your ad to shoppers searching for those terms. You only pay when someone clicks your ad, not when it’s displayed.

The amount you pay per click depends on how competitive the keyword is and what other sellers are bidding. You set a maximum bid, but you’ll usually pay slightly more than the second-highest bidder — not your full bid amount.

Industry data shows that Amazon advertisers typically see a return on ad spend (ROAS) of 3:1 to 4:1, meaning for every £1 spent on PPC, you earn £3–£4 in revenue. At Kangaroo UK, our managed accounts regularly exceed this benchmark because we combine PPC with listing optimisation and keyword research to ensure the traffic we drive actually converts.

What Are the Three Amazon Ad Types?

Amazon offers three main PPC ad formats. Each serves a different purpose, and a good strategy typically uses all three together.

Sponsored Products - These are the most widely used Amazon ads. They promote individual product listings and appear in search results and on product detail pages. Sponsored Products are keyword-targeted, meaning your ad shows when a shopper searches for a term you’re bidding on. They’re the best starting point for most sellers because they drive direct sales and the setup is straightforward.

Sponsored Brands - These ads appear at the top of search results and showcase your brand logo, a custom headline, and up to three products. They’re designed for brand awareness and are particularly effective if you have a range of products in a category. Sponsored Brands are only available to sellers enrolled in Amazon Brand Registry. Video ads are also available within this format and tend to achieve higher click-through rates than static ads.

Sponsored Display - These ads target shoppers based on their browsing behaviour, both on and off Amazon. You can retarget people who viewed your product but didn’t buy, or target shoppers browsing competitor products. Sponsored Display is the closest Amazon gets to traditional display advertising and is useful for remarketing and competitor conquesting.

How Should I Structure My Amazon PPC Campaigns?

Campaign structure is where most sellers either get it right or waste a lot of money. A clear structure makes it easier to control budgets, track performance, and optimise over time.

Start with automatic campaigns. When you launch a new product, run an automatic Sponsored Products campaign first. Amazon chooses which keywords to target based on your listing content. This acts as a discovery tool — it shows you which search terms shoppers are using to find products like yours. Let it run for 2–4 weeks to gather data.

Harvest and move to manual. Review the search term report from your automatic campaign. Identify the keywords that are driving sales at a profitable ACOS, then move those into a manual campaign where you have full control over bids. Add the best-performing terms as exact match keywords for tighter targeting.

Use negative keywords aggressively. In the Amazon accounts we audit at Kangaroo UK, the single most common waste of ad spend is a lack of negative keywords. If a search term is costing you clicks but not converting, add it as a negative keyword so your ads stop showing for that term. This alone can cut wasted spend by 20–30% in most accounts.

Separate brand and non-brand campaigns. If shoppers are searching for your brand name, those clicks will convert at a much higher rate than generic searches. Keep branded keywords in a separate campaign so you can allocate budget efficiently and measure true brand vs non-brand performance.

What Is ACOS and What Should Mine Be?

ACOS stands for Advertising Cost of Sale. It’s the percentage of your ad-attributed revenue that you spent on advertising. For example, if you spent £10 on ads and generated £50 in sales, your ACOS is 20%.

What’s a good ACOS? It depends on your margins. If your product has a 30% profit margin before ad spend, then an ACOS below 30% means you’re making money on every sale. Industry averages sit around 20–36% depending on the category, but the right target ACOS is specific to your product’s economics.

ROAS (Return on Ad Spend) is the inverse: it tells you how much revenue you earned for every pound spent. A 25% ACOS equals a 4:1 ROAS. We track both metrics for our clients and set targets based on individual product margins, not generic benchmarks.

For a deeper dive into which metrics to monitor and what good looks like, see our guide on PPC tracking metrics.

How Much Should I Spend on Amazon PPC?

There’s no single right answer, but there are sensible starting points. For a new product launch, we typically recommend starting with £10–20 per day on Sponsored Products to gather data. Once you know which keywords convert, you can increase spend on those and cut the rest.

A common rule of thumb is to allocate around 10% of your expected revenue to Amazon advertising. So if a product generates £5,000 per month in sales, a £500/month PPC budget is a reasonable starting point. As your campaigns mature and you identify your profitable keywords, you can scale up confidently because you’re spending based on data, not guesswork.

During deal events like Prime Day and Prime Big Deal Days, we increase daily budgets by 2–3x and monitor hourly. CPCs rise significantly during events — industry data from October 2025 showed a 43% year-on-year increase in CPCs during Prime Big Deal Days — so your normal budget will run out faster.

What Are the Most Common Amazon PPC Mistakes?

In the accounts we audit at Kangaroo UK, we see the same mistakes repeatedly:

• No negative keywords. This is the number one waste of ad spend. Without negatives, your ads show for irrelevant searches and you pay for clicks that will never convert.
• Running only automatic campaigns. Automatic campaigns are a great starting point for discovery, but relying on them long-term means Amazon controls your targeting. You need manual campaigns with exact and phrase match keywords to maximise efficiency.
• Advertising products that aren’t retail-ready. Driving traffic to a listing with poor images, weak bullet points, or no reviews is throwing money away. Make sure your retail-ready listings are in place before increasing ad spend.
• Setting and forgetting. PPC is not a set-it-and-forget-it channel. Bids, budgets, and keywords need regular optimisation based on performance data. We review our clients’ campaigns daily.
• No campaign structure. Dumping all products and keywords into a single campaign makes it impossible to control where your budget goes. Structured campaigns by product, match type, and brand vs non-brand give you the control you need to scale profitably.

Do I Need an Agency to Manage My Amazon PPC?

You can set up and run Amazon PPC yourself through Seller Central. The interface is manageable for basic campaigns, and for sellers with a small catalogue, it’s a reasonable place to start.

Where it gets complex is when you’re managing multiple products across multiple ad types, trying to scale without blowing your ACOS, or competing in categories where CPCs are high and margins are tight. That’s where an experienced Amazon marketing services team makes the difference, not because we know a secret trick, but because we’re in the data every day, making the small adjustments that compound over time.

At Kangaroo UK, PPC management is part of our broader Amazon account management service. We don’t run PPC in isolation; it’s integrated with listing optimisation, keyword strategy, and deal planning. That joined-up approach is what consistently delivers better results than PPC management alone.

Want help getting more from your Amazon ads?

Our Amazon PPC specialists manage campaigns daily for brands across the UK.

Book a free Amazon PPC review or call us on 01530 560177.

Author

Abhilav Vishwakarma, Amazon Marketplace Leader - Abhilav leads the Amazon team at Kangaroo UK, managing Seller and Vendor Central accounts for brands across the UK. He specialises in Amazon PPC strategy, campaign optimisation, and account growth. Abhilav and the team review client PPC campaigns daily, driving measurable improvements in ACOS, ROAS, and overall profitability.