{"id":4203,"date":"2026-05-19T17:00:00","date_gmt":"2026-05-19T17:00:00","guid":{"rendered":"https:\/\/www.aihello.com\/resources\/?p=4203---bb2f8502-8111-462a-9ea2-57d8c555c90e"},"modified":"2026-05-16T16:14:40","modified_gmt":"2026-05-16T16:14:40","slug":"full-guide-on-amazon-ppc-and-amazon-ppc-metrics","status":"publish","type":"post","link":"https:\/\/www.aihello.com\/resources\/blog\/full-guide-on-amazon-ppc-and-amazon-ppc-metrics\/","title":{"rendered":"Amazon PPC Playbook: How to Skyrocket Your Sales"},"content":{"rendered":"

Amazon PPC<\/a> accounts for 50-70% of total revenue for most sellers<\/a> in 2023. Which makes well-run ads pretty much table stakes to compete in the world’s largest marketplace.<\/p>

At AiHello<\/a>, we\u2019ve worked with 6000+ brands that generate a combined $1.5 billion in annual sales and developed our own Amazon PPC<\/a> software, and in this article, we\u2019ll share the lessons we\u2019ve learned along the way.<\/p>

We\u2019ll explain the intricacies of how Amazon PPC works, uncover our most effective strategies<\/a> for Amazon PPC management<\/a>, and reveal the metrics we used to analyze over $2 billion in ad sales.<\/p>

What is Amazon PPC and how does it work?<\/strong><\/h2>

Amazon<\/a> PPC is a search engine marketing platform that allows you to increase your visibility on certain keywords<\/a> and product pages on Amazon.<\/p>

The \u201cPPC\u201d part of its name stands for Pay-Per-Click, which is a reference to the fact that you only get charged when a customer<\/a> clicks your ads<\/a>.<\/p>

You can specify how much you\u2019re willing to pay per click by bidding for each keyword<\/a> separately. If your bid is the highest, your ad will show up in front of potential customers and you\u2019ll start getting impressions.<\/p>

Now, there are 3 different types of ads on Amazon<\/a>:<\/p>

  1. Sponsored product<\/li>
  2. Sponsored brand <\/li>
  3. Sponsored display<\/a><\/li><\/ol>

    Sponsored Product<\/strong>s<\/h3>

    Sponsored product ads<\/a> appear as regular product listings on both the search results page and the product pages of your competitors. The only difference is that they\u2019ll have a small tag that says \u2018sponsored\u2019 right under the image.<\/p>

    \"amazon<\/figure>

    The above is an example of how they\u2019d show up on the search results page for the keyword \u201cTrainers\u201d.<\/p>

    \"amazon<\/figure>

    Once you open up any product page, you\u2019ll also find a carousel of sponsored product ads right under the product listing<\/a>.<\/p>

    Sponsored product ads are generally considered to be the most effective ad type on Amazon, both from an ROI and revenue standpoint. Most sellers generally spend 70-100% of their budget<\/a> on sponsored product ads and it\u2019s the ad type we\u2019d generally recommend you start with.<\/p>

    Sponsored Brands<\/h3>

    Sponsored brands<\/a> is a highly customizable ad type that is available for brand-registered sellers and vendors to use. It looks quite different from a sponsored products<\/a> ad because it can feature custom images, logos, headlines, videos, and multiple products at once. Sponsored brand ads can also be used to drive traffic directly to your Amazon store instead of a specific product page.<\/p>

    \"amazon<\/figure>

    The first format for sponsored brand<\/a> ads is called a \u201cproduct collection ad\u201d. This format includes 3 different products from your catalog, a custom image, a headline, and your logo. Customers can either click on one of the products and go to the detail page, or click on the image and be taken directly to your store.<\/p>

    \"amazon<\/figure>

    The second format for this ad is called a sponsored brand video<\/a>. This ad allows you to use your own video content, but it features only one product and doesn\u2019t have a logo or headline.<\/p>

    \"amazon<\/figure>

    Sponsored brands can also appear on product detail pages in both video and image form.<\/p>

    From our experience sponsored brand ads<\/a> tend to perform as well as sponsored products in terms of ROI, but it’s difficult to get the same volume of clicks using them so they end up comprising only 0-20% of spend for most sellers.<\/p>

    Video ads tend to be the most effective because they have a comparatively higher CVR and CTR<\/a> than any other ad type. When done right, they can be the most effective ads in any account.<\/p>

    Sponsored Display<\/strong><\/h3>

    Sponsored display is a form of banner advertising that can show up on both search result pages and on product detail pages. They feature both custom images and regular product images or even custom videos.<\/p>

    Sponsored display is the only ad type that doesn\u2019t have the ability to target<\/a> keywords. With sponsored display ads<\/a> you can only target competing products and custom audiences.<\/p>

    It\u2019s also the only ad type where you don\u2019t have to pay per click, you also have the option of paying per impression instead.<\/p>

    \"amazon<\/figure>

    This is what a display ad might look like on a search results page. They usually show up at the very bottom of the page and they\u2019re not in a very noticeable position.<\/p>

    \"amazon<\/figure>

    They can also be shown in 4 different positions on product detail pages.<\/p>

    \"amazon<\/figure>

    They can also show up in video form on product pages as well.<\/p>

    Sponsored display tends to be the worst-performing ad type in terms of ACoS<\/a> and revenue. Most sellers don\u2019t use them and the ones who do are usually only allocating around 5% of their total budget towards it.<\/p>

    The most popular strategy<\/a> to use with sponsored display is retargeting<\/a> people who have seen your products but have not purchased them or have purchased them in the past and are due for a refill.<\/p>

    Amazon PPC for beginners: key things to know<\/strong><\/h2>

    Successful advertising on Amazon<\/a> comes down to three things: good targeting, good bids, and good conversion.<\/p>

    This means that your goal with PPC should be to drive relevant traffic (good targeting) at a fair price (good bids) and have a product that\u2019s good enough for people to buy (good conversion).<\/p>

    To track all this, you need to know the following metrics:<\/p>

    ACoS: Your advertising cost<\/a> of sales<\/a> is the percentage of a product\u2019s price that gets spent on ads. If it costs $20 in ads to sell a $100 product then your ACoS is 20%.<\/p>

    CPC<\/a>: Your cost per click is just how much you pay Amazon for each click your ads get. Your CPC is controlled by your bids and it directly affects your ACoS and clicks.<\/p>

    CTR: Your click-through rate is the percentage of impressions that turn into clicks. A good click-through rate is 0.3-0.5% in most categories and it\u2019s an indication of how attractive your product is and how accurate your targeting is.<\/p>

    CVR: Your conversion rate<\/a> is the percentage of clicks that turn into sales on your product page. The higher this percentage is, the lower your ACoS will be and the higher your sales will become. <\/p>

    CAC: Your customer acquisition cost is the amount of money<\/a> you spend on ads to sell one unit. <\/p>

    Clicks: Perhaps the simplest of them all, clicks are just how much traffic you\u2019re driving through your PPC to your products.<\/p>

    Now that you know all these metrics, we can introduce you to a few formulas we use to explain Amazon PPC more effectively.<\/p>

    No. impressions * CTR = Clicks<\/p>

    Clicks * CVR = Unit sales<\/p>

    CPC * CVR = customer acquisition cost<\/p>

    CAC \/ Product price = ACoS<\/p>

    With this in mind, your goal with Amazon ads<\/a> becomes to get as many impressions as possible, with the highest CTR you can so you can get more clicks.<\/p>

    Then you need as high of a CVR as you can get so you can sell as many units as possible.<\/p>

    Finally, you need a low CPC while doing all of this so your ACoS remains reasonable and you turn a profit<\/a>.<\/p>

    We\u2019ll explain how to<\/a> do all this in the next section.<\/p>

    Amazon PPC strategy that increases sales and lowers your ACoS<\/strong><\/h2>

    There are a lot of Amazon PPC tips<\/a> and tricks but not a lot of evidence they work. In this section, my goal is to give you the real fundamentals that you can apply to any account to improve its performance.<\/p>

    These are the same strategies we used to help our clients:<\/p>