What Is Amazon PPC? Amazon PPC Meaning Explained for Beginners (2026)

If you're selling on Amazon and not running PPC, you're bringing a knife to a gunfight. I don't say that to scare you — I say it because organic-only strategies died years ago on Amazon. The marketplace is too competitive, too crowded, and too pay-to-play for any brand to grow without advertising. The question isn't whether to run Amazon PPC. It's whether to learn it yourself or find someone who already has.

This guide explains Amazon PPC from the ground up — what it means, how it works, what it costs, and how to decide if you're ready to run it. No jargon walls. No unnecessary complexity. Just the straight explanation I wish someone had given me before I burned my first $10K learning the hard way.

What Does Amazon PPC Mean?

Amazon PPC stands for Pay-Per-Click — an advertising model where you place ads on Amazon and only pay when someone clicks on your ad. You don't pay for impressions (how many people see your ad). You don't pay for scrolling past it. You only pay when a shopper is interested enough to click.

Think of it like renting a premium shelf spot in a physical store. Your product gets placed where more shoppers can see it. But instead of paying a flat monthly fee for the shelf space, you pay per customer who picks up your product to look at it.

The "PPC" part is the pricing model. The "Amazon" part means these ads appear within Amazon's ecosystem — in search results, on product pages, and across Amazon's display network.

How Does Amazon PPC Work?

Amazon PPC operates on an auction system. Here's how it works in practice:

• You choose keywords (search terms you want your ad to appear for) or product targets (specific products you want your ad shown alongside)

• You set a bid — the maximum you're willing to pay for a single click

• When a shopper searches that keyword, Amazon runs an instant auction among all advertisers bidding on that term

• The winners' ads appear in sponsored placements on the search results page

• If the shopper clicks your ad, you pay your bid amount (actually slightly less — Amazon uses a second-price auction where you pay just $0.01 more than the next highest bidder)

• If they buy your product, that's a conversion. If they don't, you still paid for the click.

The goal is straightforward: pay for clicks that turn into sales at a cost that's profitable given your product margins.

What Are the Types of Amazon PPC Ads?

Amazon offers three ad types. Each does something different.

Sponsored Products

These are ads for individual product listings. They look almost identical to organic search results — just with a small "Sponsored" tag. They appear in search results and on product detail pages.

Who should use them: Every seller. Period. This is where you start and where the majority of your budget should live. Sponsored Products drive the most direct sales and the data is the cleanest for optimization.

Sponsored Brands

These are banner-style ads that appear at the top of search results. They feature your brand logo, a custom headline, and 2-3 products. Clicking the ad can send shoppers to your Amazon storefront or a custom landing page.

Who should use them: Brand Registered sellers who want to build brand awareness and capture shoppers early in their search. These are more expensive per click but build brand equity over time.

Sponsored Display

These are audience-targeted ads that appear on product detail pages, customer review pages, and even off-Amazon on third-party sites. They target shoppers based on browsing behavior and purchase history.

Who should use them: More advanced sellers looking to retarget shoppers who viewed their product but didn't buy, or target shoppers browsing competitor products. Not where you start, but powerful once the fundamentals are in place.

What Does Amazon PPC Cost?

There's no fixed cost for Amazon PPC. What you pay depends on your category, competition, and bidding strategy.

Here are the key cost metrics:

CPC (Cost Per Click): The average amount you pay per click. Across Amazon, the average CPC is roughly $0.80-$1.20, but this varies wildly. Low-competition categories might average $0.30/click. Competitive categories like supplements or electronics can exceed $3-5/click. Daily Budget: You set a daily maximum for each campaign. Start with $20-50/day per campaign while you're learning. You can scale once you have data. ACoS (Advertising Cost of Sale): This is your ad spend divided by your ad-attributed revenue. If you spend $100 on ads and generate $400 in sales, your ACoS is 25%. This is the primary metric for measuring PPC efficiency. Monthly total spend: For a single product, expect to spend $500-$3,000/month as a starting point. Brands with multiple products and aggressive growth targets commonly spend $10K-$100K+/month.

The real question isn't "what does PPC cost?" but "what's my return on that cost?" A $5,000/month ad spend that generates $25,000 in revenue at healthy margins is a great investment. A $500/month ad spend that generates $600 in revenue is a terrible one regardless of how "cheap" it feels.

Why Is Amazon PPC Important for Sellers?

It Drives Immediate Visibility

New products have zero organic ranking. Without PPC, you're waiting and hoping Amazon's algorithm discovers your product. PPC puts your product in front of shoppers immediately.

It Builds Organic Ranking

This is the most underappreciated benefit. Every sale you make through PPC contributes to your organic ranking on that keyword. Amazon's algorithm tracks sales velocity by keyword. PPC-driven sales signal to Amazon that your product is relevant, which improves your organic position.

Over time, this creates a flywheel: PPC drives sales, sales improve organic rank, better organic rank drives free traffic, total revenue grows while advertising dependency shrinks.

It Gives You Data

PPC campaigns generate data you can't get any other way — which keywords shoppers search to find products like yours, which terms convert into sales, what customers are willing to pay, and how your product compares to competitors in real buying scenarios.

This data is invaluable for optimizing your listing, planning product development, and understanding your market.

The Competition Is Already Running It

In 2026, the vast majority of top sellers in every category are running PPC. If you're not, you're ceding that visibility to competitors. The shoppers who would have discovered your product organically are instead clicking on a competitor's sponsored ad.

What Is a Good ACoS on Amazon?

This is the most common question beginners ask, and the answer is: it depends on your margins.

Calculate your break-even ACoS: Take your product's profit margin before ad spend. If you sell a product for $30, your COGS + FBA fees + Amazon referral fee total $18, your pre-ad profit is $12. Your break-even ACoS is $12/$30 = 40%. Anything below 40% ACoS means you're profitable on the ad-driven sale. Target ACoS benchmarks:

• Brand defense campaigns (your own brand terms): 5-15% ACoS. These should be your most efficient campaigns.

• Exact match on proven keywords: 15-25% ACoS. You have conversion data, bids are dialed in.

• Broad/phrase discovery campaigns: 25-40% ACoS. You're paying a premium for keyword discovery.

• Competitor conquest campaigns: 30-50%+ ACoS. You're poaching competitors' traffic. Higher cost, but strategic value.

Important nuance: ACoS isn't the only metric that matters. A 35% ACoS campaign that's driving organic rank growth might have a much lower TACoS (Total Advertising Cost of Sale), because the organic sales it generates don't have ad costs attached. We manage PPC for 50+ brands at GigaBrands and the brands that grow fastest focus on TACoS over ACoS.

How Do You Get Started with Amazon PPC?

Here's the minimum viable approach for beginners:

Step 1: Make Sure Your Listing Is Ready

Do not start PPC with a bad listing. Every click costs money. If your listing doesn't convert, you're just paying to send shoppers to competitors. At minimum:

• Professional main image (white background, product fills 85%+ of frame)

• Keyword-optimized title

• Benefit-focused bullet points

• At least 15 reviews (below this, conversion rates tank)

Step 2: Start with One Sponsored Products Auto Campaign

Create a Sponsored Products campaign with automatic targeting. Set a daily budget of $25-50. Set a default bid of $0.50-$0.75 (adjust based on your category's typical CPC).

Let it run for 2 weeks without touching it. You need data before you can optimize.

Step 3: Review Your Search Term Report

After 2 weeks, download the search term report. This shows every search query that triggered your ad and whether it converted. Look for:

• Converting search terms — These are your winning keywords. Note them.

• Irrelevant search terms — Terms where your ad showed but the shopper wasn't looking for your product. Add these as negative keywords.

• High-spend, zero-conversion terms — Something's wrong. Either the keyword is wrong for your product or your listing isn't converting on that search. Negate or investigate.

Step 4: Create Manual Campaigns

Take your converting search terms and create a manual Sponsored Products campaign with exact match targeting. Bid 10-20% higher than your auto campaign default bid — these are proven keywords and they deserve investment.

Negate those keywords from your auto campaign so you're not competing with yourself.

Step 5: Optimize Weekly

Every week: review search terms, negate waste, harvest winners, adjust bids based on performance. This rhythm is what separates profitable PPC from money pits.

Common Beginner Mistakes

Starting PPC before the listing is ready. Fix your images, copy, and reviews first. PPC amplifies what's already there — if your listing doesn't convert, PPC just amplifies the waste. Setting it and forgetting it. Auto campaigns left alone for months accumulate massive waste. Weekly optimization is not optional. Panicking about ACoS in week one. Early data is noisy. A keyword that looks terrible in week one might be your best performer by week four. Give campaigns time to stabilize before making dramatic changes. Only looking at ACoS. A campaign with 30% ACoS that's growing your organic rank is probably more valuable than a campaign with 15% ACoS on branded terms that would have found you anyway. Look at the whole picture.

What To Do Next

Amazon PPC isn't rocket science, but it does have a learning curve. The basics are simple — bid on keywords, pay for clicks, optimize based on data. The difficulty is in the execution at scale and in making the thousand small decisions that compound over time.

If you're new to Amazon PPC and want to avoid the expensive learning curve, or if you've been running campaigns but aren't seeing the results you expected, an outside perspective can save you months and thousands in wasted spend.

Book a free strategy call — We'll look at where you are today, what's realistic for your product and budget, and give you a clear roadmap for getting started (or getting unstuck). No jargon, no pressure, just straight answers.

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