Amazon Sponsored Products is the foundation of Amazon advertising. It's a pay-per-click ad format where your product listing appears in Amazon search results and on competitor product detail pages when shoppers search for relevant terms. You bid on keywords, Amazon runs an auction, and if you win, your product shows up with a small "Sponsored" label. The shopper clicks, you pay, and ideally they buy.
Sponsored Products accounts for the majority of Amazon ad spend. It's the first ad type most sellers launch, the last one they'd turn off, and the one that most directly drives sales velocity and organic ranking on Amazon. Understanding how to structure, bid, and optimize Sponsored Products campaigns is not optional for any brand selling on the platform.
Campaign Types: Automatic vs. Manual
| Feature | Automatic Campaigns | Manual Campaigns |
|---|---|---|
| Keyword selection | Amazon chooses based on your listing content (title, bullets, description, backend keywords) | You choose specific keywords and match types |
| Targeting types | Close match, loose match, substitutes, complements | Keyword targeting and/or product targeting (specific ASINs or categories) |
| Control level | Low. Amazon decides which queries trigger your ads. | High. You select keywords, match types, and bids for each. |
| Best for | Keyword discovery, new product launches, catching long-tail queries you wouldn't think to target | Scaling proven keywords, controlling ACoS, building targeted campaigns around top performers |
| Typical ACoS | Higher (20-40%) because targeting is broad | Lower (10-25%) when optimized with proven keywords and refined match types |
| When to use | Always. Run alongside manual campaigns to continuously discover new converting search terms. | Always. Your primary scaling and efficiency engine once you have keyword data. |
The standard approach: run automatic campaigns to discover which search terms convert, then "graduate" proven keywords into manual campaigns where you can set precise bids and match types. This auto-to-manual pipeline is the core workflow for Amazon PPC management.
Keyword Match Types
Manual campaigns give you three match types. Each controls how closely a shopper's search query must match your keyword for your ad to show.
| Match Type | How It Works | Example Keyword: "organic dog food" | Would Match | Would NOT Match |
|---|---|---|---|---|
| Broad | Triggers on queries containing all keyword words in any order, plus related terms | "organic dog food" | "best organic food for dogs," "dog food organic grain free" | "organic cat food" (different product context) |
| Phrase | Triggers when the query contains your keyword in exact order, with words before or after | "organic dog food" | "best organic dog food for puppies," "organic dog food reviews" | "organic grain free dog food" (word inserted between phrase) |
| Exact | Triggers only when the query matches your keyword precisely (with minor variations like plurals) | "organic dog food" | "organic dog food," "organic dog foods" | "best organic dog food," "organic dog food for puppies" |
How to use them together: Start broad to discover which queries convert. Move winners to phrase match for more control. Promote your highest-performing, highest-volume keywords to exact match where you can set the most aggressive bids. Use negative keywords at each level to prevent wasted spend on irrelevant queries.
Bid Strategies
Amazon offers three bidding approaches for Sponsored Products:
- Fixed bids: Your bid stays the same regardless of conversion likelihood. Gives you maximum control but doesn't adapt to real-time signals. Best for experienced sellers who want precise spend management.
- Dynamic bids, down only: Amazon lowers your bid when a click is less likely to convert. Your bid is the ceiling, never the floor. This is the safest dynamic option and a good starting point. Most sellers should start here.
- Dynamic bids, up and down: Amazon raises your bid (up to 100%) when conversion is likely and lowers it when it's not. Can increase top-of-search visibility but also increases spend. Use this when you have strong conversion rate data and want to bid aggressively for high-converting placements.
Placement adjustments add another layer. You can increase bids by up to 900% specifically for "top of search" (first row of results) or "product pages" (competitor detail pages). Top of search typically has 2-3x higher conversion rates than other placements (Perpetua, 2024), so bidding up for that placement often improves overall ACoS even though the per-click cost is higher.
Campaign Structure Best Practices
How you organize your campaigns directly affects how well Amazon's algorithm can optimize and how easily you can manage bids. Here's a proven structure:
- Separate campaigns by product group. Don't put 50 SKUs in one campaign. Group similar products (same category, similar price point, similar margin) into their own campaigns. This lets you set budgets and bids appropriate to each product's economics.
- Use single-keyword ad groups for top performers. Your 10-20 highest-volume, highest-converting keywords each deserve their own ad group. This gives you exact control over the bid for each keyword without other keywords in the group competing for the same budget.
- Run the auto-to-manual pipeline continuously. Set up a weekly process: pull the search term report from automatic campaigns, identify terms with 3+ orders at acceptable ACoS, add them as keywords in manual campaigns, then add those terms as negative keywords in the automatic campaign to avoid duplication.
- Negate ruthlessly. Review search term reports weekly. Any query that spent more than 2x your target CPA without converting should be added as a negative keyword. This is the single highest-ROI optimization activity in Amazon PPC.
- Budget by performance tier. Allocate 60-70% of your Sponsored Products budget to proven manual campaigns with strong ACoS. Allocate 20-30% to automatic campaigns for keyword discovery. Reserve 10% for testing new keywords, match types, or products.
Key Metrics to Track
- ACoS (Advertising Cost of Sales): Ad spend / ad revenue. Your primary efficiency metric. Target ACoS should be below your profit margin. If your margin is 30%, anything below 30% ACoS is profitable on the ad-attributed sale.
- TACoS (Total Advertising Cost of Sales): Ad spend / total revenue (including organic). Tracks your overall ad dependency. A declining TACoS with stable total revenue means your organic sales are growing, which is the ultimate goal.
- Conversion rate: Orders / clicks. Amazon average is roughly 25-30% for Sponsored Products (Jungle Scout, 2025). Below 8% usually indicates a listing quality problem, not an ad problem.
- Impression share: The percentage of eligible impressions your ads actually won. Low impression share on high-converting keywords means you need higher bids or budget.
Example: Auto-to-Manual Pipeline in Action
A CPG brand in the household cleaning category launched on Amazon with 12 products and a $15K/month Sponsored Products budget. They started with automatic campaigns to discover which search terms converted. After four weeks, they pulled the search term report and found 47 terms with 3+ orders at under 25% ACoS. Those terms were moved into exact-match manual campaigns with bids set 15% above automatic campaign levels to win top-of-search placement. The automatic campaigns had those terms added as negative keywords to prevent overlap. Within 60 days, blended ACoS dropped from 34% to 22% — well below the 30.4% average ACoS across all Amazon categories (Ad Badger 2025). The auto campaigns continued running at lower budget, generating 8-12 new converting terms per month. This pipeline works regardless of category or budget size.
Frequently Asked Questions
How much should I spend on Sponsored Products?
Start with a daily budget that allows at least 10-20 clicks per campaign per day (so you generate enough data to optimize). If your average CPC is $1.00, that's $10-$20/day per campaign. Scale up as you identify profitable keywords. Most established sellers spend 8-15% of their Amazon revenue on advertising, with Sponsored Products taking 60-75% of that budget (Jungle Scout, 2025).
My ACoS is too high. What should I fix first?
Check three things in order. First, your search term report. Are you paying for irrelevant clicks? Add negative keywords. Second, your listing. A low conversion rate (under 8-10%) means shoppers click but don't buy. Improve your images, title, bullets, and reviews before spending more on ads. Third, your bids. Lower bids on keywords with high ACoS and increase bids on keywords with low ACoS and high conversion rates.
Should I run automatic campaigns forever?
Yes. Automatic campaigns serve as a permanent keyword discovery engine. Even mature accounts with hundreds of manual keywords still find new converting terms through auto campaigns. Keep them running at a lower budget (20-30% of total Sponsored Products spend) and harvest new winners into manual campaigns weekly.
How do Sponsored Products affect organic ranking?
Directly. Amazon's A9/A10 algorithm uses sales velocity as a primary ranking factor. Ad-driven sales count toward velocity just like organic sales. A product that sells 50 units/day (30 organic + 20 from ads) will rank higher than one selling 30 units/day organically. This is why TACoS matters: your ad spend should be building organic momentum, not just buying one-time sales.
Sponsored Products is where most Amazon advertising success starts. Getting the campaign structure, keyword strategy, and bid management right creates the foundation for everything else, from Amazon DSP to Sponsored Brands. Texin.ai helps you build and optimize this foundation with the data and structure that turns ad spend into sustainable growth. Let's talk about your Amazon advertising strategy.