Amazon Sponsored Products Strategy for 2026

Sponsored Products accounts for 75%+ of all Amazon ad spend — and most sellers still run it like it's 2019. One auto campaign, one manual campaign, a suggested bid, and prayers. That's not a strategy. That's a slot machine. After managing $205M+ in Amazon sales across 50+ brands, I'm going to walk you through the Sponsored Products framework we actually use — the one that turns ad spend into organic rank and sustained profitability.

How Should You Structure Amazon Sponsored Products Campaigns?

You need four campaign types within Sponsored Products, and each one does a fundamentally different job.

1. Auto Campaigns (Discovery Engine)

Auto campaigns let Amazon decide which search terms trigger your ads based on your listing content. They're your intelligence-gathering operation.

Setup:

• One auto campaign per parent ASIN

• Starting bid: $0.75-$1.25 depending on category

• Daily budget: $30-$50

• All four targeting groups enabled: close match, loose match, substitutes, complements

The purpose isn't profitability — it's intelligence. Your auto campaign finds keywords and ASINs you didn't know convert for your product. Every week, pull the search term report. Terms with 2+ orders and reasonable ACoS get promoted to manual exact match campaigns. Then negate them in the auto so you stop paying discovery prices for proven keywords.

2. Broad Match Campaigns (Expansion Net)

Broad match shows your ads when shoppers search for terms that include your keywords in any order, plus related variations.

Setup:

• 15-30 keywords per ad group (grouped by theme)

• Bid: Amazon suggested bid or slightly above

• Daily budget: $30-$50

Broad match catches the middle ground between auto's shotgun approach and exact match's precision. It surfaces long-tail variations of your core keywords that you wouldn't have thought to target. Same graduation process as auto: winners move to exact, losers get negated.

3. Phrase Match Campaigns (Controlled Expansion)

Phrase match is the underrated middle child. It triggers when a shopper's query contains your keyword phrase in order, with potential additions before or after.

When to use phrase match:

• Keywords where word order matters for relevance (e.g., "organic protein powder" vs "powder protein organic")

• Terms where broad match is pulling in too much irrelevant traffic

• Mid-funnel keywords where you want expansion but with guardrails

Most sellers skip phrase match entirely. That's a mistake. In competitive categories, phrase match often delivers the best balance of volume and relevance.

4. Exact Match Campaigns (Profit Engine)

Exact match is where your money gets made. These campaigns target the precise keywords you've validated through research.

Setup:

• 3-5 tightly related keywords per ad group

• Aggressive bids — 20-40% above suggested for ranking keywords

• Top of Search placement modifier: 25-50%

• 60-70% of total Sponsored Products budget

Your exact match campaigns should contain only proven keywords — terms that have demonstrated conversion in your auto, broad, or phrase campaigns. Never guess with exact match. The data should tell you what belongs here.

How to Optimize Bids for Sponsored Products

Bid optimization isn't about finding one magic number. It's about matching your bid to the keyword's role in your strategy.

The four keyword types:

• Ranking keywords — high-volume terms where you're pushing for organic page 1. Bid aggressively. Accept higher ACoS because the organic rank payoff dwarfs the ad cost. These are investment keywords.

• Profitable keywords — terms that convert consistently below your break-even ACoS. These are your cash cows. Bid to maintain position, not to win position. Don't get greedy and cut bids on these — they're funding your ranking campaigns.

• Discovery keywords — terms you're still testing. Bid at or slightly below suggested. Give them enough budget to generate 30+ clicks for a valid conversion rate read. Then promote or kill.

• Defense keywords — your brand name, product name, and close variations. Bid low ($0.25-$0.50) because your relevance score is naturally high. These exist to prevent competitors from stealing your branded traffic.

Bid adjustment framework:

• Keyword ACoS below target by 20%+: Increase bid 10-15% to capture more volume

• Keyword ACoS within 10% of target: Hold current bid

• Keyword ACoS above target by 20%+: Decrease bid 10-15%

• Keyword has 20+ clicks and zero orders: Pause or negate

Adjust bids weekly. Not daily (too reactive), not monthly (too slow). Amazon's algorithm needs 5-7 days to stabilize after a bid change. Respect that cycle.

How Do Placement Modifiers Work in Sponsored Products?

Amazon lets you set bid adjustments for two premium placements:

• Top of Search (first page) — the ads that appear at the very top of search results

• Product Pages — ads shown on competitor detail pages

Here's what most sellers miss: placement modifiers are multipliers on your base bid, not replacements. If your base bid is $1.00 and your Top of Search modifier is +50%, you're bidding $1.50 for top of search placement specifically.

How to use them effectively:

Pull your placement report from Campaign Manager. Compare conversion rates across placements:

• Top of Search typically converts 1.5-3x better than other placements

• Product Pages conversions vary wildly by category

If Top of Search converts at 15% and Rest of Search converts at 5%, you should be bidding significantly more for that top position. Set your Top of Search modifier to +40-75% and consider lowering your base bid slightly to compensate for total spend.

The advanced move: Use "Dynamic bids - down only" as your bidding strategy. This lets Amazon reduce your bid when a conversion is unlikely but never increase it above your set amount. Combined with a strong Top of Search modifier, this concentrates your spend on the highest-converting placement while limiting waste on low-converting impressions.

How to Build a Negative Targeting Cascade

Negative targeting is how you stop hemorrhaging money on irrelevant clicks. But most sellers apply negatives randomly. You need a cascade system.

The cascade works like this:

• Auto campaign runs, finds search terms that convert

• Converting terms get added as exact match keywords in your manual campaigns

• Those same terms get added as negative exact match in the auto campaign

• This prevents your auto and manual campaigns from competing against each other for the same keyword

Extend the cascade across match types:

• Search term converts in broad campaign → add to exact campaign as keyword, add to broad campaign as negative exact

• Search term converts in phrase campaign → add to exact campaign, add as negative exact in phrase

• Non-converting term (20+ clicks, 0 orders) in any campaign → add as negative exact everywhere

Negative phrase match vs negative exact match:

• Use negative exact when a specific term doesn't convert but variations might (e.g., negate "cheap protein powder" but keep "best protein powder")

• Use negative phrase when the entire keyword theme is irrelevant (e.g., negate "for dogs" as phrase if you sell human supplements)

Run this cascade every week. It takes 20-30 minutes and saves thousands per month in wasted spend. We've seen accounts cut ACoS by 15-25% in the first month just by implementing proper negative cascading.

Should You Use Day-Parting for Sponsored Products?

Day-parting means adjusting bids based on time of day. It works, but only with enough data and the right tools.

When day-parting makes sense:

• You're spending $10K+/month on Sponsored Products

• You have 60+ days of hourly performance data

• You use a third-party tool (Pacvue, Perpetua, or similar) since Amazon's native console doesn't support granular hourly rules

Typical patterns we see across categories:

• Conversion rates peak 7-10 AM and 7-11 PM (local time for your primary market)

• Conversion rates crater 1-5 AM

• Weekends often have higher conversion rates but lower search volume

• Sunday nights are consistently strong across most categories

Implementation: Reduce bids 25-40% during low-conversion hours. Increase 10-20% during peak hours. Net effect: same daily spend, better allocation of that spend toward converting impressions.

For brands under $10K/month in ad spend, day-parting is a rounding error. Focus on campaign structure, bid optimization, and negative keywords first. Those three levers move the needle 10x more than time-of-day adjustments.

How to Allocate Sponsored Products Budget by Funnel Stage

Not all keywords serve the same purpose. Allocate budget based on where the keyword sits in the purchase funnel.

Top of Funnel (10-15% of budget)

• Category-level keywords ("protein powder," "yoga mat")

• High volume, high CPC, lower conversion rate

• Purpose: brand awareness and new customer acquisition

• Acceptable ACoS: above break-even — this is acquisition spend

Mid Funnel (25-35% of budget)

• Qualified keywords ("organic whey protein isolate," "thick yoga mat for knees")

• Medium volume, moderate CPC, solid conversion rates

• Purpose: capturing shoppers who know what they want but haven't chosen a brand

• Acceptable ACoS: at or near break-even

Bottom of Funnel (50-60% of budget)

• High-intent and branded keywords ("GigaBrands protein powder," "best rated thick yoga mat")

• Lower volume, lower CPC, highest conversion rates

• Purpose: capturing ready-to-buy shoppers and defending your brand

• Acceptable ACoS: well below break-even — these should be your most profitable campaigns

This allocation isn't static. During a product launch, top-of-funnel spend increases to build awareness. During peak season (Q4), bottom-of-funnel spend increases to maximize conversion of high-intent traffic. Adjust quarterly at minimum.

What Does a Mature Sponsored Products Strategy Look Like?

After 6+ months of proper execution, a well-structured Sponsored Products account should look like this:

• TACoS trending between 10-20% (category dependent)

• ACoS on exact match campaigns at 15-25% for most keywords

• Auto campaigns running at maintenance level (15% of total spend)

• Negative keyword lists with 200+ terms per product

• Organic rank on page 1 for your top 10-15 keywords

• Weekly optimization cadence taking 2-3 hours total

The mistake I see at scale? Sellers who get comfortable. They hit profitability, stop adding negatives, stop testing new keywords, and slowly watch competitors erode their position. The marketplace never stops moving. Neither should your Sponsored Products strategy.

If you're doing $50K+/month on Amazon and your Sponsored Products strategy doesn't look like this, we should talk. Our team manages this across 50+ brands daily — it's all we do.

Book a free strategy call: https://calendly.com/d/crft-5qs-x9w

Hunter Harris is the founder of GigaBrands, an AI-assisted Amazon growth agency managing 50+ brands with over $205M in total Amazon sales.