Amazon PPC (Pay-Per-Click) advertising is one of the most effective ways to drive sales on the platform. Sponsored Products — the most common ad type — put your products in front of shoppers who are actively searching for what you sell. Here is how it works.
What Are Sponsored Products?
Sponsored Products are ads that appear in Amazon search results and on product detail pages. They look almost identical to organic listings, with a small "Sponsored" label. When a shopper clicks your ad, they are taken to your product page — and you pay for that click.
You only pay when someone clicks. If your ad appears in search results but nobody clicks, you pay nothing. This makes PPC a relatively low-risk form of advertising — you are paying for actual traffic, not just exposure.
How Pricing Works
Amazon PPC uses an auction system. You set a maximum bid — the most you are willing to pay per click. When a shopper searches for a relevant keyword, Amazon runs an auction among all advertisers targeting that keyword. The highest bidders win the ad placements, but you pay slightly more than the next highest bid (not your maximum).
Typical cost-per-click (CPC) in the UK ranges from £0.20 to £1.50+ depending on the category and competition. High-competition keywords cost more. Niche keywords with less competition can be very affordable.
Setting Up Your First Campaign
In Seller Central, go to Advertising > Campaign Manager and click "Create Campaign." Choose Sponsored Products. Give your campaign a name, set a daily budget (start with £10–£20 per day), and set a start date.
You will then choose between automatic and manual targeting. For beginners, start with an automatic campaign — Amazon uses its algorithm to match your product to relevant searches based on your listing content. This is the fastest way to start driving traffic and gathering data on which keywords work for your products.
Understanding the Results
After your campaign runs for a week or two, review the data. Key metrics to watch are impressions (how often your ad was shown), clicks (how many people clicked), CPC (what you paid per click), sales (revenue from ad clicks), and ACoS (Advertising Cost of Sale — the percentage of ad-attributed revenue spent on advertising).
ACoS is your primary efficiency metric. If your ACoS is 25%, you spent £25 in advertising for every £100 in sales from those ads. Whether that is good depends on your profit margins — if your margin is 30%, a 25% ACoS is sustainable. If your margin is 15%, a 25% ACoS means you are losing money on ad-driven sales.
When to Start Advertising
Start advertising once your listing is optimised — good images, compelling title and bullet points, and competitive pricing. Driving traffic to a poor listing wastes your advertising budget. The listing needs to be able to convert the traffic that ads bring in.
PPC is particularly important for new products that have no organic ranking or reviews yet. Advertising jumpstarts your sales velocity, which feeds back into organic ranking improvements over time.
Budget Expectations
Start small and scale based on results. A £10–£20 daily budget lets you gather meaningful data without significant financial risk. Once you understand which keywords and products perform well, increase your budget on winning campaigns and pause underperformers.
Amazon PPC is not an expense — it is an investment that generates measurable returns. The sellers who learn to use it effectively have a significant advantage over those who rely solely on organic traffic.