Amazon Sponsored Products Guide
Sponsored Products is the most used Amazon advertising format. It’s simple to set up, goes live within the hour, requires no custom creative, and directly drives sales. Whether you’re launching a new product or scaling an existing one, Sponsored Products should be a core part of your Amazon advertising strategy.
What Are Sponsored Products?
Sponsored Products are ads that promote individual products across Amazon. When a shopper searches for a relevant term, your sponsored product ad appears in the search results, typically in the top positions or interspersed with organic results. Your ad also appears on product detail pages for related products, increasing visibility.
The format is simple: your product’s image, title, price, and reviews appear as a sponsored listing. It’s essentially a promoted version of your regular product listing. When a shopper clicks your ad, they land on your product detail page.
How Sponsored Products Pricing Works
Sponsored Products use a cost-per-click (CPC) auction model. You set a maximum bid you’re willing to pay when someone clicks your ad. However, you typically pay less than your maximum bid. Amazon uses a second-price auction system, meaning you pay £0.01 more than the second-highest bid in the auction. If you bid £0.50 and the second-highest bid is £0.35, you pay £0.36.
This means you should bid your true maximum value. Bidding conservatively reduces your visibility; bidding aggressively increases it but may not cost proportionally more due to second-price auction mechanics.
Campaign Structure
Sponsored Products campaigns are organized hierarchically:
Campaign → Ad Groups → Keywords → Bids
A single campaign can contain multiple ad groups. Each ad group targets a product (or multiple products) with keywords and bids. You can set different bids for different keywords within the same ad group, or different bids across ad groups within the same campaign.
Automatic Targeting
Automatic Targeting lets Amazon’s algorithm determine where your ads appear. Amazon shows your ads for any searches it considers relevant to your product, without you needing to specify keywords. This is the simplest approach and is ideal for beginners or when you’re unsure which keywords to target.
Automatic Targeting has four targeting types:
Close Match
Amazon shows your ad for searches very closely related to your product’s title, description, and keywords. This is the most conservative automatic targeting type, with the best conversion-to-click ratio.
Loose Match
Amazon shows your ad for searches broadly related to your product. This generates more traffic than Close Match but may include less relevant searches.
Substitutes
Amazon shows your ad for searches related to products your product could substitute for. If you sell a silicone baby spoon, your ad might appear for searches like “metal baby fork”, since both are feeding utensils.
Complements
Amazon shows your ad for searches related to products that complement yours. Your silicone spoon ad might appear for “baby bowl” searches, since bowls and spoons are often purchased together.
You can set a default bid for Automatic Targeting, or set different bids for each of the four types. For example, you might bid higher for Close Match (expecting higher conversion) and lower for Substitutes (expecting lower conversion).
Manual Targeting
Manual Targeting gives you control to specify exact keywords you want to target, brands to target, or product categories. This requires more upfront research but gives you precision in campaign structure.
Keyword Targeting with Match Types
Broad Match: Your ad shows for the keyword plus related variations, in any order. If you target “baby spoon”, your ad appears for “silicone baby spoon”, “baby spoon set”, “feeding spoon”, “baby utensils”. Broad match generates the most traffic but may include irrelevant searches.
Phrase Match: Your ad shows for the exact phrase plus additional words before or after. If you target the phrase “baby spoon”, your ad appears for “silicone baby spoon” or “baby spoon set”, but not “spoon baby” (wrong order). Phrase match is more targeted than Broad but less restrictive than Exact.
Exact Match: Your ad shows only for that precise keyword or very close variations. Targeting “baby spoon” shows only for searches very close to “baby spoon”. Exact match generates less traffic but targets only highly relevant searches.
Negative Keywords
Negative Phrase: Prevents your ad from showing for searches containing that phrase. If you add a negative phrase for “plastic”, your ad won’t show for “plastic baby spoon”, even if it matches your other targeting criteria.
Negative Exact: Prevents your ad from showing for that exact keyword. If you add a negative exact for “cheap”, your ad won’t show for searches for “cheap spoons”.
Use negatives to exclude irrelevant searches that generate clicks but no conversions. For example, if you sell a premium product, you might add negatives for “cheap”, “budget”, and “inexpensive”.
Product Targeting
Instead of keywords, you can target by product. Specify specific products, brands, or product categories. Your ads appear on the detail pages of those products. For example, you could target all “baby feeding” category products, or specific competitor products, or a specific brand’s entire product line.
Campaign Setup and Best Practices
Daily Budget
Minimum daily budget is £1. Amazon allows you to exceed your daily budget by up to 10% on high-traffic days. A £10 daily budget could spend up to £11. For meaningful testing and results, set your budget based on your profit margins and sales goals. Most successful campaigns run with £10+ daily budget.
Campaign Duration
Campaigns can run continuously (no end date) or end on a specific date. When setting up a campaign, you choose whether it runs indefinitely or ends on a specific date. You can pause campaigns at any time.
You can schedule campaigns up to 4 months in advance, allowing you to plan seasonal campaigns or launches ahead of time.
Attribution Window
Amazon uses a 7 and 14-day attribution window for Sponsored Products. This means if a shopper clicks your ad but makes a purchase within 7 or 14 days (depending on the product category), that purchase is attributed to your ad. Some categories use 7-day windows; others use 14-day. This attribution window is important for understanding your campaign’s true impact.
Let Campaigns Run
Give your campaigns time to produce results. Let them run for at least 2-4 weeks before making major optimizations. Early data can be skewed. Amazon needs time to gather click and conversion data, test different audiences, and optimize ad placement. After 2-4 weeks, you’ll have meaningful data to analyze.
Optimization Strategies
Start with Automatic Targeting
If you’re new to Sponsored Products, start with Automatic Targeting to understand which searches generate traffic and conversions. Use the campaign data to inform your Manual Targeting strategy later.
Pause Low-Performing Keywords
Monitor your keyword performance. If a keyword is driving clicks but zero conversions, consider pausing it or adding it as a negative keyword. If a keyword drives conversions but has a high cost-per-sale, consider lowering your bid.
Increase Bids for High-Performers
Keywords driving consistent conversions at acceptable ACoS should get higher bids to increase visibility. Bid aggressively on your winners.
Implement Negative Keywords
As you gather data, identify searches generating clicks but no conversions. Add these as negative keywords to prevent wasting budget on irrelevant traffic.
Connecting Sponsored Products to Your Broader Strategy
Your Sponsored Products campaigns should support your listing optimization efforts. Your product title and backend keywords inform your keyword selection. Your product photography quality and A+ Content determine whether ad clicks convert to sales.
Your ACoS (advertising cost of sale) measures campaign profitability. You should also consider Sponsored Brands campaigns for broader brand awareness and visibility.
For new sellers, review our guide to advertising as a new seller to understand platform rules and best practices.
Common Sponsored Products Mistakes
- Setting bids too conservatively: Low bids reduce visibility; second-price auction means you pay less than your max bid
- Not letting campaigns run long enough: Pausing after 1 week prevents gathering sufficient data
- Not using negative keywords: Irrelevant clicks waste budget and inflate ACoS
- Poor listing quality: Bad photography or weak copy means ad clicks don’t convert
- Ignoring ACoS targets: Failing to understand your profit margins and appropriate ACoS levels
- Not monitoring performance: Setting campaigns and forgetting about them prevents optimization
Frequently Asked Questions
What is Amazon Sponsored Products and how does it work?
Sponsored Products is the most common Amazon ad format, promoting individual products in search results and on product detail pages. It uses cost-per-click (CPC) bidding with second-price auction mechanics. Ads go live within the hour and require no custom creative.
What is the difference between Automatic and Manual Targeting?
Automatic Targeting uses Amazon’s algorithm to show ads for relevant searches (Close Match, Loose Match, Substitutes, Complements). Manual Targeting lets you specify keywords or products with match types (Broad, Phrase, Exact) for more control.
What match types should I use for my Manual Targeting keywords?
Broad match provides the most reach; Phrase match balances reach and relevance; Exact match targets only highly relevant searches. Use negative keywords to exclude irrelevant searches. Start with Broad, then refine with Exact as you optimize.
What is a reasonable daily budget for Sponsored Products?
Minimum is £1 daily. For meaningful testing, use £10-50+ daily depending on product price and profi
Dynamic Bidding Strategies
Amazon Sponsored Products offers three distinct bidding strategies that automatically adjust your bids based on the likelihood of conversion. Choosing the right strategy depends on your goals, profit margins, and comfort with bid variability.
Dynamic Bids Down Only
With this strategy, Amazon automatically lowers your bid when it determines a click is less likely to convert. Your bid remains at your specified maximum for searches Amazon believes are high-conversion opportunities, but decreases for lower-probability searches.
This strategy is conservative and cost-effective. You benefit from lower costs on traffic unlikely to convert while maintaining full bids on high-potential traffic. Most sellers with tight profit margins or low ACoS targets use this strategy.
Example: You set a maximum bid of £0.50. For a search Amazon predicts will likely convert, your bid stays £0.50. For a search Amazon predicts is unlikely to convert, your bid might drop to £0.25 or £0.35. This reduces wasted spend on low-conversion searches.
Dynamic Bids Up and Down
With this strategy, Amazon automatically raises your bid (up to 100% increase) when a click is more likely to convert, and lowers it when less likely to convert. This strategy maximizes visibility on high-conversion opportunities while minimizing spend on poor-fit searches.
If a search signals high conversion probability, Amazon can bid up to double your maximum. For example, with a £0.50 maximum bid, Amazon might bid £1.00 for a high-probability conversion search. This aggressive approach captures high-value traffic at the cost of higher average CPC.
This strategy is best for sellers prioritizing sales volume over ACoS targets, or for high-margin products that can afford premium placements. New sellers launching products often use this to accelerate initial sales and reviews.
Example: You set a maximum bid of £0.50. Amazon detects a search from a returning customer in your target demographic with high purchase intent. Amazon automatically raises your bid to £0.75 to win this high-value auction. The same keyword for a low-intent searcher drops to £0.25.
Fixed Bids
With fixed bids, Amazon doesn’t adjust your bid at all. Your bid remains constant for all searches, regardless of conversion likelihood. This provides complete predictability but removes the optimization benefits of dynamic bidding.
Fixed bids are best for sellers who want complete control and transparency, or those managing very niche keywords where conversion variability is minimal. Most successful sellers at scale use dynamic strategies instead.
Placement Bid Adjustments
Beyond overall bidding strategies, you can adjust your bids for specific placements. Amazon allows separate bid adjustments for top-of-page and product page placements.
Top-of-Page Placements: These premium positions at the top of search results command higher visibility but typically higher cost-per-click. You can increase your bid adjustment (up to +50%) to maximize visibility for these placements, or decrease it if you want to appear only when costs are lower.
Product Page Placements: These placements on competitor product detail pages have lower competition but sometimes lower conversion. You might set a lower bid adjustment here to reduce costs while maintaining presence.
For example, if your base bid is £0.50 and you set a +25% adjustment for top-of-page placements, you’re effectively bidding £0.625 for those premium positions while keeping £0.50 for standard placements.
Campaign Reporting Deep Dive
Data-driven optimization depends on understanding which reports to pull, what they reveal, and how to use them for actionable improvements. Amazon provides six key report types for Sponsored Products, each answering different optimization questions.
Campaign Report
The Campaign Report shows aggregate performance across each campaign. It displays impressions, clicks, click-through rate (CTR), cost per click (CPC), total spend, revenue, ACoS, and units sold per campaign.
What it reveals: Overall campaign health. Which campaigns are profitable, which are burning money, which are underperforming in impressions or CTR.
How to use it: Identify underperforming campaigns that need optimization or pausing. Compare campaigns to identify best practices (if Campaign A has 25% ACoS and Campaign B has 45% ACoS, investigate Campaign A’s structure to replicate its success).
Targeting Report
The Targeting Report shows performance at the targeting level. In automatic campaigns, it breaks down performance by targeting type (Close Match, Loose Match, Substitutes, Complements). In manual campaigns, it shows performance by keyword or product target.
What it reveals: Which targeting types or specific keywords are driving sales efficiently. Which are wasting spend with high cost-per-sale. Which targeting types have high impressions but low clicks.
How to use it: In automatic campaigns, adjust bid adjustments to increase bids on high-performing targeting types and decrease on low performers. In manual campaigns, identify high-ACoS keywords to pause or negative out, and high-performing keywords to increase bids on.
Search Term Report
The Search Term Report shows the actual customer search queries that triggered clicks on your ads. This is crucial data because customers don’t always search using your exact keywords.
What it reveals: What customers actually search for when your ads appear. Which search terms drive conversions (add these to manual campaigns). Which search terms drive clicks but zero conversions (add as negative keywords). Customer intent and language around your product category.
How to use it: Pull this report weekly. Identify high-converting search terms and add them as exact-match keywords to manual campaigns with higher bids. Identify terms with many clicks but zero conversions and add them as negative keywords. This creates a virtuous cycle where performance improves with each optimization cycle.
Keyword Placement Report
The Keyword Placement Report shows where your ads appeared for each keyword. It breaks down performance by placement (top of search results, product pages, rest of search results) and device type (desktop, mobile).
What it reveals: Which placements drive higher conversion rates. Whether your ads are getting top-of-page impressions (indicating bid competitiveness). How mobile and desktop performance differ.
How to use it: If top-of-page placements have significantly higher conversion rates, increase bids to secure more top positions. If product page placements have poor conversion, reduce bids for those placements. Use device-level data to adjust mobile bids if mobile conversion rates differ significantly.
Advertised Product Report
The Advertised/Purchased Product Report shows performance by the products you’re advertising. It breaks down clicks, conversions, revenue, and ACoS by advertised ASIN. It also shows what customers purchased (both the advertised product and other products in complementary purchases).
What it reveals: Which ASINs generate profitable sales volume. Which ASINs drive high-margin sales. Whether advertisements for one product drive purchases of other products (cross-selling). Attribution of purchases to specific advertised products.
How to use it: Identify high-performing ASINs and increase budget allocation to them. Pause advertising for ASINs with poor ROI or low sales volume. Investigate cross-selling opportunities where advertising one product drives sales of higher-margin products.
Performance Over Time Report
This custom report shows campaign performance trended over days or weeks. You can compare performance across date ranges, identify trends, and understand how seasonal variation or bid changes affect results.
What it reveals: Campaign performance trends. The impact of bid changes or optimizations on results. Seasonal variation in ACoS, CTR, and conversion rate. Whether your campaigns are improving or declining over time.
How to use it: Monitor weekly trends to detect problems early. If ACoS increases for three consecutive weeks, your campaign is deteriorating (increased competition, lower conversion rate, or bid inefficiency). Use this data to make proactive adjustments. Identify seasonal trends to plan budget allocation.
Building a Reporting Cadence
For optimal results, establish a consistent reporting routine. Pull the Campaign Report weekly to monitor overall health. Pull the Search Term Report weekly to identify optimization opportunities. Pull the Targeting Report monthly to evaluate bid adjustment effectiveness. Review the Keyword Placement and Performance Over Time reports monthly to understand trend direction.
This systematic approach ensures you catch underperformance early and capitalize on emerging opportunities.
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