Amazon Ads Explained: A Guide to Sponsored Products, Brands & Display

In a marketplace as vast as Amazon, great products aren’t enough—you need visibility. Amazon Advertising is the powerful engine that can propel your products in front of ready-to-buy customers. But with different ad types available, where should you start?

Understanding the core Amazon PPC (Pay-Per-Click) options—Sponsored Products, Sponsored Brands, and Sponsored Display—is the first step to creating a targeted strategy that boosts sales, builds your brand, and maximizes your return on ad spend.

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The 3 Core Types of Amazon PPC Ads

Think of Amazon’s ad ecosystem as a toolkit. Each tool has a specific purpose in the customer's journey, from product discovery to final purchase.

1. Sponsored Products (The Sales Drivers)

• What they are: Ads for individual product listings. They appear directly in search results and on product pages, looking nearly identical to organic listings but labeled "Sponsored."
• Best for: Driving immediate sales for specific items. They target customers using precise keywords and are ideal for launching new products or boosting best-sellers.
• Key Benefit: High purchase intent. You're reaching shoppers who are actively searching for products like yours.

2. Sponsored Brands (The Brand Builders)

• What they are: Ads that showcase your brand with a custom headline, logo, and a carousel of your products. They link to your Amazon Store or a curated landing page.
• Best for: Increasing brand awareness, telling your brand story, and promoting multiple products at once. They appear at the very top of search results.
• Key Benefit: Builds brand equity and trust while driving traffic to your entire product portfolio, not just one item.

3. Sponsored Display (The Audience Re-Engagers)

• What they are: Visual display ads that use audience and product targeting. They can reach shoppers both on and off Amazon (on thousands of other websites and apps).
• Best for: Retargeting shoppers who viewed your products but didn’t buy, or targeting audiences interested in similar or competing products.
• Key Benefit: Remarketing power. It keeps your brand in front of potential customers even after they leave Amazon, bringing them back to complete a purchase.

Quick Comparison: Where to Use Each Ad Type

Ad TypeBest GoalKey PlacementTargeting FocusSponsored ProductsDrive direct, immediate salesSearch results, product pagesKeywords shoppers search forSponsored BrandsBuild brand awareness & showcase multiple productsTop of search resultsKeywords & brand interestsSponsored DisplayRetarget interested shoppers & find new audiencesAmazon product pages & off-Amazon websitesAudiences & specific products

Pro Tips to Launch & Optimize Your Campaigns

For All Campaigns:

• Start with a Goal: Are you launching (accept higher cost), scaling (balanced growth), or optimizing for profit (lowest cost)? Your goal dictates your strategy.
• Know Your Metrics: Track ACoS (Advertising Cost of Sale) to measure efficiency and ROAS(Return on Ad Spend) to measure revenue return.
• Use Negative Keywords: Prevent your ads from showing on irrelevant searches to stop wasting budget.

For Sponsored Products & Brands:

• Structure Campaigns Thoughtfully: Group similar products and keywords into tightly themed ad groups for better control and optimization.
• Leverage Match Types: Use a mix of Broad, Phrase, and Exact match keywords to balance discovery and precision.
• Bid Strategically: Increase bids on top-performing keywords and decrease or pause bids on underperformers.

For Sponsored Display:

• Remarket to Viewers: Your first campaign should always target shoppers who have viewed your product detail pages—this is your hottest audience.
• Target Competitor Products: Carefully target products that are similar to yours to capture shoppers while they are comparing options.

Beyond the Basics: Advanced Amazon Ad Solutions

Once you’ve mastered the core three, explore these powerful tools:

• Amazon DSP: Programmatic buying for advanced video, audio, and display ads across the internet with sophisticated audience targeting.
• Amazon Attribution: Measure how your off-Amazon marketing (like social media or email) drives sales on Amazon.
• Amazon Posts: Free, social-style image posts that appear in shopping feeds to build brand affinity (separate from PPC).

When Is the Right Time to Start Amazon Ads?

The simple answer: As soon as you have an optimized product listing ready.
Advertising does more than drive immediate sales; it sends strong performance signals to Amazon’s algorithm, which can boost your organic search ranking over time. The sales velocity from ads tells Amazon your product is relevant and popular, leading to more free, organic visibility.

You don’t need a huge budget to start—begin with a focused Sponsored Products campaign, learn from the data, and scale from there.

Conclusion: Your Advertising Blueprint
A successful Amazon brand uses a layered advertising approach. Start with Sponsored Productsto capture demand. Use Sponsored Brands to build recognition around your best-sellers. Employ Sponsored Display to retarget and expand your reach. By understanding the role of each ad type, you can create a cohesive strategy that guides customers from discovery to loyal purchase.

Ready to transform your ad strategy from a cost center to a profit driver? [Get your free Amazon PPC audit]. Our experts will analyze your account and provide a custom plan to lower your ACoS and increase your ROAS.

FAQs

Q: What’s the difference between ACoS and ROAS?
A: ACoS (Advertising Cost of Sale) shows what percentage of your ad sales revenue was spent on ads (lower is usually more efficient). ROAS (Return on Ad Spend) shows how many dollars you earned for each dollar spent on ads (higher is better). They are two sides of the same coin.

Q: How much does it cost to advertise on Amazon?
A: You control your budget. Amazon uses a pay-per-click (PPC) auction model. Average CPCs vary by category but often range from $0.50 to $3.00. You set daily budgets and bids, so you only pay when shoppers click.

Q: Can I run Amazon ads if I’m a new seller?
A: Absolutely. In fact, it’s one of the best ways for new products to gain initial sales velocity and climb the search rankings. Start with a small daily budget on Sponsored Products to learn and gather data.

Q: Which ad type should I use first?
A: For most sellers, Sponsored Products are the essential starting point. They are the most direct way to turn ad clicks into sales and gather valuable keyword data for your business.

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