1 Why Is Amazon Advertising So Important?

As someone selling on Amazon, advertising on the platform might seem like such an obvious choice that it hardly needs explanation. But let me break it down with some data.

Amazon has become a digital advertising powerhouse alongside Alphabet and Meta. As of Q3 2024, it’s been expanding its advertising revenue at an overwhelming pace, with a 23% compound annual growth rate over three years. Amazon advertising has the distinct advantage of being based on customers’ actual purchase data. Plus, beyond the e-commerce platform itself, Amazon can reach a broad consumer base through its own solutions like Prime Video, Alexa, and Fire TV.

What’s more, customers are using Amazon as a channel to discover new brands and products. In fact, 75% of Amazon customers say they use Amazon to discover new products and brands³⁾, and 52% are willing to purchase products from unfamiliar brands. This is precisely why brands and products with low brand awareness need to get exposure to more customers through Amazon advertising.

Given how crucial Amazon advertising is for sellers, Amazon provides various ad formats so you can run efficient campaigns tailored to your objectives and targets. These broadly fall into two categories: Self-service Ads (which include Sponsored Products and Sponsored Brands) and DSP (which can only be managed through agencies). Today, we’ll look at the most commonly used Self-service Ads—specifically, Sponsored Products, Sponsored Brands, and Sponsored Display, which are the most frequently used options.

1) https://www.amzigo.com/articles/the-ultimate-guide-to-amazon-advertising-in-2025
2) https://quartr.com/insights/company-research/the-rise-of-google-meta-amazon-and-youtube-in-advertising
3) https://www.businessdasher.com/amazon-statistics/
4) https://clearadsagency.com/maximising-sponsored-product-performance-with-amazon-marketing-cloud/

2 Sponsored Products: The Most Basic Yet Powerful Weapon

Since Amazon is a search-based platform, Sponsored Products ads—which primarily appear on search results pages—are the most widely used ad format. They’re displayed at the individual product level alongside the product’s main image, title, ratings, and price, appearing on both search results pages and product detail pages. Because these ads appear at the stage closest to purchase in the customer journey, they use a click-based CPC (Cost Per Click) pricing model.

Targeting options are broadly divided into keyword targeting and product targeting. Keyword targeting offers both Auto and Manual options. Auto mode lets Amazon’s algorithm automatically show your ads for keywords and products that are highly relevant to your product. In contrast, Manual mode enables you to specify target keywords when setting up your campaign. Manual targeting is further divided into three options: Exact, Phrase, and Broad.

You can also run campaigns targeting individual competitor products, specific categories, or competing brands through product targeting. For instance, you could use a strategy to attract customers who are viewing competitor products to your own products.

3 Sponsored Brands: The Power of Increasing Brand Awareness

While showing products to customers who search specific keywords with purchase intent through Sponsored Products is effective for driving short-term sales, long-term growth on Amazon requires turning customers who’ve experienced your products into loyal brand fans and persuading them through your brand story and values. This is where Sponsored Brands comes in.

Like Sponsored Products, Sponsored Brands appear on search results pages and product detail pages based on keyword or product targeting. Still, it allows you to use brand logos, custom ad copy, images, or videos, and can showcase up to three products. You can also use your Brand Store as a landing page, allowing customers to explore your entire brand beyond just product details.

Unlike Sponsored Products, since Sponsored Brands is also used for brand awareness, you can run campaigns using not only CPC but also vCPM (Viewable Cost Per Mile: cost per 1,000 viewable ad impressions) pricing.

4 Sponsored Display: Exposure Inside and Outside Amazon

Sponsored Display is advertising that appears both inside and outside Amazon. While Sponsored Products and Sponsored Brands allow targeting at the keyword and product level, Sponsored Display lets you target Amazon customer pools organized by specific criteria—and there’s an incredible variety of them. You can target customers who’ve viewed particular categories or products, continuously retarget customers who’ve purchased or clicked on your products (essentially following them to the ends of the earth), and target customers who show high interest in specific categories based on their Amazon browsing and purchase history.

The products someone views and buys reveal a lot about their lifestyle. For example, parents with babies will frequently purchase baby products, and people who buy eco-friendly products are likely very interested in environmental issues. Amazon, with all this data, creates targetable audiences for Sponsored Display based on lifestyles like “parents with children,” “customers who primarily buy discounted products,” and “frequent travelers.” Since this targets specific customer groups rather than keywords, these ads can appear not only within Amazon (on detail pages, search results pages, and the main page) but also outside Amazon (on partner sites, apps, etc.), providing exposure throughout the entire customer purchase journey.

The pricing model supports both click-based CPC and impression-based vCPM. Like Sponsored Brands, you can use both images and videos as creative assets and set custom ad copy. This ad format is optimized for persistently following and persuading customers who are hesitating to purchase your products, or for expanding your new customer base.

5) https://www.supplykick.com/blog/amazon-sponsored-display

5 Useful Amazon Advertising Tips Worth Knowing

This column seems particularly long and dry since it covers the fundamental aspects of Amazon advertising. Nevertheless, thank you for reading this far. As a token of my appreciation, I’d like to share just two more useful Amazon advertising tips.

Does Amazon’s advertising revenue only include purchases made immediately after clicking an ad? People are typically reluctant to click ads, and they rarely purchase immediately after clicking, so if that were the logic, it would be hard to expect good ROAS (Return On Advertising Spend). Fortunately, Amazon also uses what’s called an Attribution Window—an advertising attribution period where sales within a specific timeframe after an ad click are recognized as sales attributed to that ad. For third-party sellers, Sponsored Products uses a 7-day window, while Sponsored Brands and Sponsored Display use 14 days, meaning sales within those periods after an ad click count as advertising revenue.

Since CPC is the primary pricing model, when adding targets in Amazon advertising, you need to enter bid values (advertising bid prices) like in an auction. While adjusting bid values for the targets themselves to improve advertising efficiency is beneficial, for more efficient and purpose-driven campaign management, I also recommend adjusting bid values by ad placement and audience.

Amazon advertising provides data by placement, as shown above. You can set the percentage by which bid values can automatically increase for each placement. For example, Top of Search—one of the placements—literally means the very top of search results pages, and since most clicks on search results pages happen at the top, it tends to have high CTR (Click-Through Rate). However, because competition is fierce, CPC is also measured high. If you want to focus your ad spend on Top of Search, you could lower your base bid value and adjust the Top of Search bid increase rate so your ads primarily appear in Top of Search placements. This way, by checking data for each placement, you can fine-tune bid values to secure more exposure in high-performing placements.

You can also adjust bid values by the audiences that Amazon has created. For Sponsored Products, you can set up separate bid adjustments for customers who have previously purchased your brand’s products, customers who are likely to buy your products based on recent shopping history, and customers who have clicked on or added your products to their cart. Since Sponsored Brands is a branding-focused ad format, you can adjust bid values for new customers who haven’t purchased your brand yet. Using this feature appropriately based on your advertising objectives can be very useful. For instance, if your goal is to acquire new customers, you can set bid values to increase for new customers. Alternatively, if you’re advertising a discounted product, you can target customers who have previously clicked on that product or only added it to their cart to drive purchases.