Amazon PPC Uncovered: The Ultimate Step-by-Step Guide for 2025

Introduction:

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Amazon PPC (Pay-per-Click) is a powerful advertising tool that helps brands, agencies, and third-party sellers advertise their products effectively.

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With over 300 million shoppers actively browsing and looking to buy, Amazon’s internal advertising system offers a cost-effective way to increase sales and get your business noticed.

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Why Amazon PPC Matters

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Amazon ads have become a primary driving factor for success in 2025. A strong strategy focused on the right keywords and budget management can help rank your products higher in search results, outpacing competitor product listings.

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For newbie sellers, it can seem tricky, but with a detailed guide on the basics and setup, you’ll be on your way to avoiding budget burn.

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Key to a Successful Campaign

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• A successful campaign depends on how well you manage your advertisements.
  
• Setting up Amazon PPC for better products is the first step to success.

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What is Amazon PPC advertising?

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Amazon PPC is a powerful advertising tool helping sellers and brands promote their products on the Amazon platform.

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Using this model, you create campaigns that drive sales and generate more views for your products. It amplifies brand visibility, reaching customers actively searching for related items.

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How Amazon Advertising Works?

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With Amazon Advertising, you target users who see your ads, driving clicks to your product listing.

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This increases the potential for Store visits, boosting your overall sales.

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Though fees and charges apply, great campaigns can fast-track your success by offering promotion opportunities with strong returns.

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How much does PPC on Amazon cost?

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The costs of Amazon PPC vary significantly depending on several factors.

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Factors that affect cost:

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• A seller typically pays $0.15 to $6 per click, depending on the product category, keywords, and competition.
  
• Running ad campaigns targeting highly competitive keywords results in higher costs, while niche categories cost less.

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How Does Amazon PPC Work?

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Amazon PPC lets sellers place ads to promote products on Amazon.

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When a shopper searches a keyword, like Crocs shoes, Amazon displays Sponsored Product ads in search results or product detail pages.

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Understanding the Auction Model:
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To make ads visible, sellers bid on specific keywords related to their products.

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The process is an auction. The winning ad is selected based on bid and relevance.

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Amazon uses a modified second-price auction, meaning the winning ad typically pays the second-highest bid. If the highest bid is $5 and the second-highest is $4, the winner pays $4, not the full $5.

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This system encourages more sellers to participate in PPC and helps ensure competitive ads get noticed.

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Key Advantage:

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lt’s a pay-per-click system. Sellers pay when a shopper clicks the ad, not for views without engagement.

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Why is PPC important for Amazon sellers?

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PPC (Pay-Per-Click) advertising is a crucial strategy for Amazon sellers to increase visibility and sales.

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Millions of products are listed on Amazon.com. Competition is fierce, and standing out is essential for sellers of all business sizes.

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Visibility & Targeting

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This exposure drives traffic, influences rankings, and significantly boosts sales.

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Staying Competitive

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As the e-commerce landscape evolves, with the influx of buyers in 2024, PPC remains one of the most effective ways for brands to reach new users.

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Without it, sellers risk losing valuable opportunities to competitors already leveraging ads to stay visible.

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Consumer Insights & Revenue Impact

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PPC helps businesses understand consumer behavior, turning search activity into revenue.

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In May 2022, Amazon generated 2.4 billion dollars from PPC, illustrating how vital it is for sellers aiming to succeed in the Amazon marketplace.

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Amazon PPC: Key terms and features

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Amazon PPC campaigns are guided by key metrics tracking their success.

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Be sure to monitor these essential advertising metrics:

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Advertising Cost of Sales (ACoS):
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ACoS (Advertising Cost of Sale) measures the efficiency of an Amazon PPC campaign.

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It represents the ratio between ad spend and sales revenue generated from ads.

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Example:

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If you spend $5 on ads and generate $20 in sales, your ACoS is (5/20)*100 = 25%.

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Return on Ad Spend (ROAS):

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ROAS measures revenue generated for every dollar spent on advertising. A higher Return on Ad Spend shows your campaigns are more profitable.

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Click-Through Rate (CTR):
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A click-through rate is the ratio of clicks to impressions for an ad. It reflects how well your ad creative and targeting resonate with your audience.

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A higher CTR indicates that your ad is more aligned with the interests of your target audience.

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Example:

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If your ad shows 100 times and 1 person clicks, your CTR = (1 ÷ 100) × 100 = 1%

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Impressions:

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Ad impressions refer to the number of times your PPC ad displays to shoppers, whether or not they click.

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Clicks:
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This is how often buyers clicked your ad.

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Cost Per Click (CPC):
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Sellers are charged a fee whenever a potential buyer clicks their ad, known as cost-per-click (CPC).

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For PPC campaigns on Amazon, this cost can range between $0.30 to $10 per click.

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Attributed Sales:

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Product sales generated within one week of clicks on your ads. Attribution windows depend on ad type.

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Allow up to 48 hours for sales data to update. Sales info may not appear in the 'Today' date range and could show in the 'Yesterday' range instead.

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For detailed performance, refer to the Campaign Performance report. Non-advertised product sales may not be included.

Amazon PPC Ad Types

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There are three types Amazon ads:

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• Sponsored Product Ads
  
  
• Sponsored Brand Ads
  
  
• Sponsored Display Ads
  
  

Almost 80% of small to medium-sized businesses selling on Amazon promote their products on or off the platform. Of these, 77% use Sponsored Products ads, 39% use Sponsored Brands ads, and 30% use Sponsored Display ads.

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Sponsored Product Ads

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Sponsored Product Ads are the most common for sellers looking to gain instant visibility. These product ads appear in the search results and product listing page, blending naturally with organic search results.

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Key Benefits:

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• Drive Sales & BSR Ranking – Get your products in front of the right audience and improve your ranking on the result page.
  
  
• Keyword Research for Proper Targeting – Use proper targeting through Keyword research to increase advantages over third-party sellers.
  
  
• Enhanced Buying Experience – These ads create a seamless buying experience, making it simpler to intermix promotions with shopping.
  
  

With over 70% of sales happening on the first page, Sponsored ads help drive more traffic and boost visibility quickly after a product is launched, offering multiple benefits with a tag of "Sponsored."

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Keyword Targeting Options:
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When setting up Sponsored Products ads, sellers can choose between two keyword targeting methods:
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• Automatic
  
  
• Manual
  
  

Let's break down how they differ.

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Automatic Targeting

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Amazon PPC uses an algorithm to place ads across product listings based on shoppers' behavior.

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With automatic campaigns, Amazon decides where to show your ads using different targeting methods. This approach is ideal for new sellers looking to gather data and optimize bids.

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Targeting groups include:

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• Close match
  
  
• Loose match
  
  
• Substitutes
  
  
• Complements
  
  

These help sellers reach shopper searches effectively.

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The advertising algorithm analyzes search terms to show your ads within detail pages, ensuring relevance for purchases and higher conversions.

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Example:
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If you sell running shoes, your ads may appear for sprinting shoes, Nike shoes, or athletic gear, but also irrelevant items like socks if contextual signals overlap.

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The drawback is less control over spending, as Amazon manages bids using its algorithm, making manual keyword targeting essential for long-term optimization.

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Pro tip: A seller’s perspective should balance automatic campaigns against manual targeting to maximize results while keeping cost in check.

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Manual Targeting

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Manual targeting gives you the power to hand-select the keywords for your ads.

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Instead of relying on automatic systems, you manually choose which keywords to target, and bid for each one, giving you effective control over your campaign.

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This approach allows you to:

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• Keep a close watch on targeted keywords
  
  
• Make adjustments as necessary
  
  
• Monitor performance and optimize for shopper needs
  
  

By doing so, you can potentially lower costs over time.

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This process is perfect for businesses wanting to make long-term decisions and spend wisely.

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Sponsored Brand Ads

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Sponsored Brand ads are a powerful way for brand-registered sellers and vendors to increase brand awareness and sales.

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These ads display in Amazon shopping results, showing your brand’s logo, tagline, and a product collection.

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With Sponsored Brand ads (formerly known as Headline Search Ads), you link directly to a custom landing page or your storefront, making it easier for shoppers to find what they need.

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This strategy helps:

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• Improve ROAS
  
  
• Grow your business
  
  
• Drive traffic toward products by standing out from the competition with creative ads, including videos
  
  

The right ad strategy significantly enhances your marketing campaign’s performance.

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There are three types Sponsored Brand ads brand-registered sellers choose from:

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• Product Collection
  
  
• Store Spotlight
  
  
• Video Ads
  
  

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Product Collection

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To successfully promote your products using Sponsored Brand ads, focus on a well-curated product collection that aligns with your ad format.

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Key highlights:

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• Feature three products on a custom-branded landing page linked with your Amazon storefront
  
  
• Boost traffic and visibility
  
  
• Improve conversion rates and drive better sales outcomes
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Store Spotlight

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Amazon PPC helps sellers promote products and brands through ads.

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It directs customers to a storefront or page with one click, showcasing different kinds of products across categories and subcategories.

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Example:

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A brand uses Amazon ads to highlight excellent products, giving them the spotlight and driving more traffic to the store.

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Video Ads

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Amazon offers a powerful way to reach customers through video. Sponsored Brand video ads significantly enhance brand visibility.

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Here's how to make the most of video ads to stand out from the competition:

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• Create an informative video that directly highlights your product within the first few seconds
  
  
• Follow best practices and guidelines to keep the video concise and avoid filler
  
  
• Ensure videos autoplay with sound off, and use texts and captions for accessibility
  
  
• Showcase your brand and product at the beginning, with a strong introduction to capture attention

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Sponsored Display Ads

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Amazon's Sponsored Display ads have become a top way for sellers to target high-intent audiences and boost product sales.

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Where Ads Appear:

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These ads are strategically placed to appear on and off Amazon, using mobile phones, apps, and third-party websites like Twitch and IMDB.

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With attractive visuals and limited video creatives, they help re-engage potential customers and influence the buying journey.

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Targeting Capabilities

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Targeting is more precise through contextual methods based on shopping behavior and category relevance.

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Ads show to specific buyers who have already shown interest, maximizing the chances of a purchase.

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Conversion Focus
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Sponsored Display ads improve conversion rates and sales for high-priced products or those with longer buying cycles.

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These ads aim to influence purchase decisions and bring shoppers back.

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Performance Impact
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Leveraging these targeting options allows sellers to effectively re-engage shoppers and improve overall sales performance.

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How to get started with your first Amazon PPC campaign ?

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Now that you're familiar with Amazon PPC, do you feel prepared to launch your first campaign?

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Step 1: Choose your products to advertise

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When deciding what products to promote, it’s important to select items that will drive the most clicks and sales.

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A well-thought-out choice can significantly impact product sales and ranking on Amazon.

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If you're launching a product or have a brand-new item, you may want to start with products already showing strong performance indicators, such as high-selling items with good reviews or popularity, to get more visibility.

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Consider factors like product popularity and current ranking when choosing.

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Tip: For example, each ad type (Sponsored Products, Sponsored Brands, and Sponsored Display) offers different promotional benefits depending on campaign goals and product type.

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I have seen firsthand how selecting the right products can maximize brand awareness and make all the difference in getting noticed on the platform.

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Research and Choose the Right Keywords for Your Campaign

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When running an Amazon PPC campaign, the first step is researching your keywords.

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Using a reliable tool like Helium 10, Jungle Scout, or Amazon's own Brand Analytics, you can easily find data such as:

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• Monthly search volume
  
  
• CPC
  
  
• Competition for specific keywords
  
  

This helps you compile a list of high-performing terms to target.

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Example:
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If you sell a wood toilet paper holder and a metal toilet paper holder, knowing the search intent and volume of these keywords is crucial.

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You want to make sure you're targeting the right match type, applicable in manual targeting, so your ad reaches the right audience.

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Avoid wasting budget by selecting keywords with low searches or high competition.

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Focus on terms with:

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• Good search potential
  
  
• Manageable CPC
  
  

This ensures you maximize ROI.

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Optimize Your Product Listings

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When running an Amazon PPC campaign, it's important to optimize product listings to get the best results.

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Start by:

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• Ensuring your product title is clear and includes relevant keywords
  
  
• Writing a compelling description highlighting features, benefits, and uses
  
  
• Including essential info like warranty details, which can make the listing more attractive
  
  

Use professional images:

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• Show the product from multiple angles
  
  
• Include in-action shots when possible
  
  

For PPC campaigns, it's key to have a compiled list of keywords helping your product rank higher in organic search results.

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You can manage campaigns in two ways:

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• Automatic
  
  
• Manual
  Note: Only manual campaigns let you target specific keywords.
  
  

To optimize listings, make sure they’re ready for both automatic and manual campaigns.

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Adjusting your ad budget allows you to control spend while maximizing visibility.

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When you incorporate these strategies into your product listings, you're setting your PPC campaign up for success.

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Create your campaign:

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To start your first campaign, simply follow these steps:
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Log in to your Amazon account
Click on the “Campaign Manager” under the Advertising menu
Choose your ad type and click “Continue” to begin campaign setup

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Next, choose from three ad options:

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• Sponsored Products
  
  
• Sponsored Brands
  
  
• Sponsored Display
  
  

After selecting your ad type, Amazon will prompt you to provide the following details:

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• Campaign name
  
  
• Start date
  
  
• End date (optional)
  
  
• Daily campaign budget
  
  

Pro Tip: To achieve optimal results, it's helpful for organizing campaigns to establish a naming system.

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Example format: [Product Type] [Duration] [Goal]

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This structure makes it easier to track and manage campaigns and ensures clarity for others reviewing them.

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Budget Guidelines:

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Regarding your daily budget (the maximum amount you’re willing to spend each day), Amazon offers flexibility:

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• Minimum daily budget: $1 for Sponsored Products, Sponsored Brands, and Sponsored Display
  
  
• You’ll likely want to set a higher amount to meet your objectives
  
  
• You can adjust your daily budget anytime
  
  

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Choose your targeting:

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When you start a new Amazon PPC campaign, you need to choose your targeting. There are two main options:

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• Automatic targeting
  
  
• Manual targeting
  
  

Automatic Targeting:
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Amazon uses its data to match your ads with relevant search terms and product listings, based on product information you supply.

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This is a great option if you want to get your campaign up and running quickly, as it requires minimal effort.

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Manual Targeting:

You can select specific keywords and products (e.g., Product A, Product B) to advertise.

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This gives you more control over ad placements and allows you to:

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• Set a default bid for each keyword
  
  
• Deliver ads to the most relevant audience
  
  

Summary:

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• Automatic targeting is ideal for beginners or hands-off setup
  
  
• Manual targeting allows more customization and spend control
  
  
• If you choose automatic targeting, you will still need to review and manually launch your campaign
  
  
• If you selected manual targeting, proceed to the next step

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Upload your keywords

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To set up a successful Amazon PPC campaign, it’s important to upload your keywords strategically.

First, you’ll need to add them to your campaign in the correct format.
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‍This is typically done by entering them manually in Campaign Manager.
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Alternatively, use a .csv file via the Bulk Operations tool when managing large campaigns.

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This helps streamline setup and ensures your targeting options are set properly.
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Make sure to upload a list containing relevant keywords for the best results.

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Keyword match types you can use:

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• Broad match
  
  
• Phrase match
  
  
• Exact match
  
  

Targeting modes:

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• Manual targeting for precision
  
  
• Automatic targeting for simplicity
  
  

Amazon also lets you update campaign settings such as bids, budgets, and targeting regularly to improve performance and reach the most relevant customers.

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Pro tip:

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Add negative exact match and negative phrase keywords.

This prevents your ads from showing for irrelevant searches and makes your campaign more cost-effective.

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Set your keyword bids

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To set your keyword bids effectively, start with thorough keyword research.
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‍Use performance data provided in Amazon Ads to guide bidding decisions rather than guessing.

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Raise or lower your keyword bids based on performance.

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It's essential to monitor your ads regularly and be proactive in making adjustments.

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Why it matters:

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• Prevent wasting money on low-performing keywords
  
  
• Optimize for better ROI
  
  
• Increase bids for strong performers
  
  
• Reduce or pause low-performing terms
  
  

Always align bids with your daily budget and overall campaign goals.

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This improves results and avoids unnecessary cost.

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Submit your ads

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When you submit your ads on Amazon, start by selecting the right targeting and bids for your campaign.

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Once you launch, it's essential to monitor ad performance daily.

Regularly check data to spot issues and make changes as needed.

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Adjust based on performance:

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• Bidding strategy
  
  
• Budget
  
  
• Campaign structure
  
  

Addressing issues early, based on performance data (not just increasing bids), improves outcomes and helps you stay ahead.

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This keeps your campaigns live and effective.

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