Amazon Advertising Tutorial: Beginner’s Guide to Ads Setup

Amazon Advertising Tutorial: Beginner’s Guide to Ads Setup

Yes, advertising on Amazon can be a game-changer, but only IF you know what you’re doing. Don’t be fooled by the same generic advice “Set a random daily budget, cross your fingers, and hope for the best”. Unfortunately, that’s not how you win when it comes to Amazon ads.

We’re skipping all the fluff and getting straight to the good stuff: why a $10–$20 daily budget is a bad idea, what to know about Amazon’s automatic bidding, and how to launch and optimize manual campaigns like a total pro. We’ll also talk about the common mistakes new advertisers make (so you don’t have to learn the hard way).

So if you’re a seasoned seller fine-tuning your ad strategy or a newbie who wants to start strong, this guide has you covered. 

1. Why Amazon Advertising Matters More Than Ever

There’s no doubt that Amazon is the biggest e-commerce marketplace in the U.S., with millions of product searches happening every hour. But with countless sellers fighting for that sale, standing out can feel like trying to yell over a stadium full of people. Maybe you’ve tested every trick on how to increase your sales on Amazon, yet somehow, your results are still underwhelming. Maybe it’s time to consider spending some marketing budget on Amazon ads.

Why are Amazon ads a MUST?

High Buyer Intent – Amazon is not like social media, where people are just scrolling for memes, Amazon shoppers are actually there to buy a thing or two, therefore your ads have a much better shot at converting to sales.

Brand Protection – If you don’t run ads under your own brand name, your competitors will. Imagine someone searching for your product and ending up buying theirs. That’s not cool.

Faster Product Launches – Ads give your new products the momentum they need, which helps boost organic rankings faster.

But let’s be real. Running Amazon ads isn’t as simple as setting a budget and hoping for the best. There are things such as keyword bidding, campaign types, and budget management to figure out. So if you plan to go in blindly or simply let Amazon’s default settings do all the work, you might as well be throwing money away.

And since we’re being honest, it doesn’t even matter how good your Amazon landing page is if the right people aren’t seeing it. Traffic matters, and building a solid Amazon marketing funnel is key to turning clicks into sales.

2. Accessing Amazon Advertising via Seller Central

Seller Central is Amazon’s main dashboard where you can manage everything related to your business on Amazon, from product listings and inventory to orders, customer service, and of course, advertising. It’s practically your seller HQ. Before you start running ads, you must log in to Seller Central and head to the Advertising/Campaign Manager section, where you’ll find the Amazon Ads Console, your all-in-one dashboard for creating, managing, and analyzing campaigns.

First things first…

Do you have a Professional seller account? If not, then you must create one. Amazon only gives full advertising access to Professional accounts, so if you’re still on an Individual plan, it’s time to upgrade. Also, your product listings should be in top shape, because even the best ads can’t save a poorly optimized listing.

Lock it down

Amazon strongly recommends enabling two-factor authentication (2FA) to protect your account. It might seem like a minor step, but a compromised seller account can lead to wasted ad spend or fraud. Nobody wants that.

Welcome to your new command center

The Amazon Ads Console will give you access to your existing campaigns, key stats such as impressions, clicks, sales, and ACoS (Advertising Cost of Sales). This is where you’ll create new campaigns, adjust your budget, set bids, and track performance.

If you’re new to this, you MUST take some time to explore and figure out how it works before throwing money at ads.

Are your listings ready for ads?

Before spending a dime, make sure your product listings are conversion-friendly. Meaning it has high-quality images that meet Amazon’s specs (at least 1000 x 1000 pixels), remember – blurry photos don’t sell. Your listing also needs concise bullet points that clearly highlight the key benefits – no lies, no fluff. It needs SEO-optimized titles that include top keywords because people need to find your product first (More about this in our post on Amazon SEO Strategy). And last but not least, it needs to have competitive pricing to make your customers click that “Add to Cart” button almost instantly.

If these basics aren’t in place, your ads won’t perform well, no matter how much you spend. 

3. Launching Your First Amazon Ads Campaign

Most Amazon sellers make the most rookie mistake of jumping into a campaign with a super low budget and bid, hoping for magic to happen. Spoiler alert: it usually leads to crickets and a mountain of inconclusive data. Instead, let’s take a more thoughtful approach in creating your campaign:

Choose Your Campaign Type

Sponsored Products: These highlight individual products in search results and product pages, this is perfect for boosting direct sales and launching new products.

Sponsored Brands: Here, you get to show off multiple products and your brand logo in a banner, this is great for brand visibility and cross-selling.

Sponsored Display: This one’s all about tracking down those customers who peeked at your product but didn’t add to cart. You can follow them on and off Amazon like a friendly (but not creepy) reminder.

We explain these different ad formats in more detail further below, but if you feel out of your depth, check out professional Amazon Sponsored Brand Ads Management, Amazon Sponsored Display Ads Management and Amazon Sponsored Product Ads Management services.

Campaign Name, Schedule, and Targeting

• Naming: Get creative with your campaign names. For example, “SP_AutumnLaunch_InsulatedMug_10-15-23” – this way, you’ll know what’s what when you look back on it months later.
• Scheduling: Decide if you want the campaign to stay forever or end on a specific date, like after a big holiday promo.
• Targeting: This is key. If you’re new to the game, start with Amazon’s automatic targeting. It’ll match relevant keywords and product pages for you. But just a heads up: if you don’t keep an eye on it, you could burn through your budget faster than you can say “overbid.” So check your search term reports after a couple of weeks.

Budget and Bids

We’ll dive deeper into budget math in our section further down on calculating campaign budgets, but here’s the gist: too low a budget or bid can seriously hurt your campaign. For example, if your cost-per-click (CPC) is $1.00 but your daily budget is just $5, you’ll get around 5 clicks/day. That’s hardly enough to see if your campaign is working or not. Also we have written a more in-depth blog post on Amazon advertising cost for you to further dwell on this topic.

Monitor Performance

Don’t expect your ads to pop up immediately right after you launch your ad, because it may take a few hours, so don’t panic (it’s totally normal). But do keep an eye on daily impressions and clicks. If there’s zero action, your bid might be too low or your budget might be running out too quickly. One critical step in later ad campaign optimization is continued Amazon search term optimization.

4. Overview of Amazon Ad Formats

Not all Amazon ads are created equal. Here’s what you need to know about each Amazon Ad format:

Sponsored Products – appears in search results (top, side, bottom), product detail pages, and sometimes under “Sponsored products related to this item.”

Key Advantage: The potential customers who see these ads are already in “Buying Mode”, they’re actively searching for something just like your product so getting a sale is very likely.

Best Used: Great for launching new products, running seasonal promotions, or jumping in to steal some of your competitor’s spotlight.

Sponsored Brands – appears in banner at the top of search results, showing off your brand logo and a few of your products.

Key Advantage: This is ideal for raising brand recognition and encouraging cross-selling. You can even link to your Amazon Store or a tailored landing page showcasing all your products.

Best Used: Perfect for getting your brand out there, showcasing your bestsellers, or introducing a new product line that fits well with your current products.

Sponsored Display – appears in product detail pages, follow-up emails, and even third-party sites in Amazon’s network.

Key Advantage: This is perfect for retargeting customers who checked out your product but didn’t hit “buy” (yet). It also lets you reach new audiences who might like similar products.

Best Used: A must for re-engaging potential buyers who left without purchasing, or to bring back customers who haven’t bought in a while.

5. Calculating and Setting a Realistic Campaign Budget

1. Analyze Your CPC and Sales Goals

First things first: check the average cost-per-click (CPC) is for your category. Tools like Jungle Scout or Helium 10 are great for getting keyword-level CPC estimates. For example, if your CPC is around $1.50, you’ll want enough budget to gather several hundred clicks over a reasonable timeframe (maybe two weeks).

2. Set a Minimum Click Threshold

Let’s do the math: say your goal is to gather 200 clicks. With a CPC of $1.50, that will cost you $300. If you spread that out over two weeks, you’ll need around $21/day to hit that goal.

3. Consider Your Product Margin

If your product sells for $40 and your margin is $20, you have some leeway on your ad spend. But you definitely don’t want to blow all that profit. This is where your break-even ACoS (Advertising Cost of Sales) comes in handy. To calculate it, add your cost of goods and Amazon fees, then divide by your product price. Try to keep your ACoS below this number when you’re testing ads.

4. Plan for Data Depth

Be aware that by running ads with a budget that’s too tight for your CPC, your funds will likely run out too quickly each day (that means fewer impressions and conversions). 

5. Adjust Over Time

You should optimize your listings, sharpen your targeting, or even adjust your bids. Always adjusting things as you go so you’re not wasting ad budget on what’s not working.

6. The Pros and Cons of Different Bid Strategies

A bid strategy is how Amazon determines what you’ll pay for each ad click, which impacts where and when your ads appear. Choosing the right strategies can make a big difference, here are the different kind of bidding strategies in Amazon:

Automatic Bidding – Amazon automatically adjusts your bid in real-time based on how likely a shopper is to make a purchase.

Why It’s Good: It’s great for beginners because it’s hands-off, Amazon will do most of the work and collect data so you can improve your future campaigns.

Why It’s Risky: Since you’re not setting limits manually, you could be paying for clicks that don’t convert especially if your product is in a competitive niche. 

Manual Bidding – Unlike automatic bidding, you get to set your own bids for each keyword or targeting group.

Why It’s Good: You have full control and you can decide exactly how much you’re willing to pay per click, which is great once you know which keywords actually drive sales. To figure out which keywords to bid on, you will have to get started with keyword research.

Why It’s Risky: If your bid is too low, your ad won’t get enough visibility; if it’s too high, you could burn through your budget fast.

Dynamic Bidding – This is similar to an automatic bid but with more control. Amazon will automatically adjust your bid up or down based on the likelihood of making a sale, however, you can choose between:

Down Only –  Lowers your bid when Amazon thinks a shopper is unlikely to convert.

Up and Down – Raises your bid when conversion chances are higher and lowers it when they’re not.

Why It’s Good: This could actually help you spend efficiently by prioritizing high-converting clicks while reducing wasteful spending.

Why It’s Risky: If Amazon thinks your product won’t convert, there is a chance it will keep on lowering your bid and you might lose out on valuable traffic/data.

We have written a detailed blog post on the topic of Manual PPC or Automated PPC that explains the pros and cons of different approaches in more detail. 

7. Conducting Effective Keyword Research

Poor keyword choices can sink your campaign fast even if you have enough budget. The keywords you choose will decide whether your ad appears in front of the right shoppers, or just get lost in the noise.

Use Amazon’s Own Data

Search Term Report – If you’ve been running an automatic campaign, this will show which search terms gets impressions, clicks, and actual sales. Once you see the best-performing keywords, simply move them into a manual campaign where you can control the bids.

Amazon Auto-Complete – Search words related to your product or listing and Amazon will suggest popular searches. These are terms actual shoppers use to search for a product, making them great options to test in your ads.

Use Third-Party Tools for More Insights

If you have more marketing budget and want to go beyond Amazon’s built-in data, keyword research tools can help. Click here to learn more about the top 10 Amazon Amazon SEO Tools for 2025.

Keyword Match Types: How Specific Should You Be?

Amazon lets you choose how closely a search needs to match your keyword before your ad appears. Here’s what that means:

Broad Match – This gives you the most reach but can lead to irrelevant clicks. Your ad can appear with related terms, synonyms, and similar phrases. 

Phrase Match – Your keyword has to appear in the exact order but can have other words before or after.

Exact Match – Your ad will only appear when the search matches your keyword exactly how it’s written. This is the most targeted option but also the most restrictive.

Using Negative Keywords to Avoid Wasting Money

Knowing how to use negative keywords stops your ad from appearing for irrelevant searches.

• Block words like “free” or “used” if you don’t want bargain hunters clicking on your ad.
• Exclude competitor names you don’t want to compete directly with big brands.

8. Measuring and Interpreting Amazon Ad Performance

Advertising is a numbers game. If you want to keep growing, you need to track your data closely and be willing to tweak your strategy based on what’s actually working.

ACoS (Advertising Cost of Sales)

Your ACoS should be lower than your profit margin if you want to stay in the green. So if your margin is 30%, you need an ACoS below that to keep making money from your ads.

A high ACoS usually means something’s not right, maybe your bids are too high, your listings need work, or your keywords aren’t relevant enough. More on this topic: What is a good ACoS on Amazon.

CTR (Click-Through Rate)

CTR shows how many people click on your ad. If it’s low, your main image, price, or title might not be optimized enough to grab attention, or your keywords aren’t quite right (What is a good CTR for Amazon Ads). Fixing this could be as simple as making your product listing match what shoppers are actually looking for.

Conversion Rate

This tells you what percentage of clicks turn into actual sales. If your conversion rate is under 5%, especially on a product with a high cost-per-click, you’re probably spending too much without seeing results. To fix this, you need better content and get more solid (real) reviews.

Impressions

Impressions show how often your ad gets seen. If you’re not getting enough, your bids might be too low, or your targeting could be off.

9. Common Mistakes and How to Avoid Them

Most Amazon ad mistakes come down to misunderstandings about budgets, targeting, or how the ad console actually works. Here are some common mistakes to watch out for:

Choosing the Wrong Budget Type

Some sellers pick a lifetime budget, assuming it’ll be evenly distributed over time. But if your campaign performs well, that entire budget could be drained in a day which will cut off valuable data too soon. On the other side, a daily budget that’s too low can slow down big promotions. 

Relying Too Much on Automatic Targeting

Auto-targeting is great for gathering initial data, but leave it unchecked and it can burn through your budget fast. If you want to try automatic targeting, use it only to identify winning keywords, then transfer those keywords into a manual campaign for better control.

Ignoring Negative Keywords

If you keep seeing search terms that never lead to sales, add them as negative keywords. Otherwise, you’ll keep wasting money on clicks that don’t convert (more on this topic: Negative keywords Amazon). 

Starting with a Budget That’s Too Low

Setting a higher budget might be scary especially if you’re just starting out, but getting more or less 5 clicks/day will not get you anywhere. 

Overlooking Product Listing Optimization

Here’s the bitter truth: even the best ads won’t fix a weak product listing. If shoppers click your ad but don’t buy, there may be issues with the listing itself. Optimizing listings is key to getting favoured by the Amazon A9 algorithm and Amazon SEO (Amazon SEO Services). Maybe your main image, pricing, or bullet points need work, so make sure your listing looks polished and convincing before throwing money at ads. If you need help with this look for Amazon Listing Optimization Services.

To wrap it up, yes advertising on Amazon can drive serious sales, but it still takes more than just setting a budget and letting ads run. Success comes from a strategic, data-driven approach, adjusting bids based on performance, and constantly tweaking your campaigns. Just as important, your product listing, pricing, and branding need to be solid, because ads alone can’t fix a weak foundation. Treat Amazon advertising as an ongoing process, not a one-time setup, and you’ll be on the path to success.