Sponsored Products on Amazon: How to Set Up Ads That Sell

Over 70% of Amazon sales come from the first page of search results, and Sponsored Products on Amazon give you a way to get there, even if your product isn’t ranking yet. These ads are the backbone of Amazon PPC and often deliver the highest return on ad spend for sellers who know how to use them.

In this post, I’ll walk you through exactly how to launch a Sponsored Product campaign, how to avoid wasting your ad budget, and how to optimize your campaigns. Let’s get started.

What Are Sponsored Products on Amazon?

Sponsored Products on Amazon are pay-per-click (PPC) ads that promote individual product listings directly within the Amazon marketplace. These ads increase visibility by placing your product in front of shoppers who are actively searching for similar products or keywords. When someone clicks the ad, they’re taken straight to your product detail page.

Besides displaying a small “Sponsored” label, these ads appear identical to organic product listings. You’ve likely seen them, usually at the top of search results or scattered throughout product detail pages. In my experience, they’re one of the simplest and most effective ways to build early momentum, especially during a product launch or seasonal promotion.

Unlike Sponsored Brand Ads or Sponsored Display Ads, you don’t need to be Brand Registered to run Sponsored Products campaigns. That’s one reason many new sellers start here. These ads are available to professional sellers, vendors, book vendors, authors, and agencies. As long as your product is in stock and has the Buy Box, you’re eligible to run a Sponsored Products campaign.

Sponsored Products are also the most widely used ad type among Amazon sellers. That’s because they offer a strong mix of cost-efficiency, targeting control, and performance. Whether you’re just launching or scaling up, they’re the first place to start with Amazon advertising.

How Do Amazon Sponsored Product Ads Work?

Sponsored Products on Amazon run on a cost-per-click (CPC) system. You set a bid for how much you’re willing to pay when someone clicks your ad, and Amazon runs an internal auction to decide which ads appear for each search.

Let’s say a shopper searches for “wireless phone charger.” Amazon evaluates all eligible ads, compares bids, and selects winners based on keyword relevance and bid amount. You never pay more than your max bid, but your actual CPC is typically just a bit higher than the next-highest bidder’s.

What I like about this model is that you only pay when someone clicks. There’s no charge for just being seen (impressions). Plus, strong performance from Sponsored Product ads can help improve your organic ranking over time. Here’s how it works: PPC drives immediate visibility by placing your product at the top of search results, which leads to clicks and, most importantly, sales. Amazon tracks those conversions as a sign that your product is relevant and in demand. As a result, your organic placement for those keywords can improve, reducing your need for paid traffic over time.

Where Your Ads Show Up

Sponsored Product ads appear in high-traffic areas across Amazon. The most prominent placement is right at the top of Amazon search results, above the organic listings. They can also appear throughout the rest of the search page and in multiple placements on product detail pages.

Your ads show on both desktop and mobile, including the Amazon shopping app. Unlike Sponsored Display ads, these placements stay entirely within Amazon’s ecosystem. That means you’re focused on reaching active, high-intent shoppers rather than paying for off-site impressions.

How You Get Charged (PPC Model)

With Sponsored Products and most of Amazon’s other ad types, you’re only charged when someone clicks on your ad. This is the core of Amazon’s pay-per-click advertising model. Your cost per click (CPC) can vary from a few cents to several dollars, depending on your product category, competition, and bidding strategy.

You’ll also set a daily budget to control your overall spend. Amazon uses this to manage your ad delivery over the month. While daily spend can fluctuate slightly—say, $110 one day and $90 the next—it will generally stay near your monthly cap. If you set a $100/day budget, Amazon will aim to stay close to $3,000 across 30 days.

Sponsored Product Targeting Options

Amazon offers two main targeting types for Sponsored Products on Amazon: automatic and manual. You’ll choose one when setting up your campaign, and that decision is locked once the campaign goes live. Both methods support negative targeting, which lets you block low-performing keywords or ASINs to improve efficiency.

Automatic Targeting

With automatic targeting, Amazon handles the targeting for you. Their system matches your ads to keywords and products based on the content of your product listing and shopper behavior. It’s an easy way to get started, especially if you don’t have a keyword list yet.

Amazon divides automatic targeting into four match types:

• Close match: targets search terms that are closely related to your product. For example, if you sell a dog bed, your ad might show for “orthopedic dog bed” or “medium dog bed for crate.”
• Loose match: allows broader keyword connections, even if they’re less direct. Your ad might show for terms like “pet sleeping mat” or “dog accessory.”
• Substitutes: places your ads on listings for similar or competing products. If you sell a stainless steel water bottle, your ad might show on a listing for a BPA-free plastic bottle.
• Complements: shows ads on listings for items that pair well with your product. A seller offering yoga mats might have their ad appear on listings for yoga blocks or resistance bands.

In my experience, automatic campaigns are best used for keyword and ASIN discovery. They’re fast to launch and can help you find high-converting keywords for your product. Once you have that data, you can move your top keywords into a manual targeting campaign for more control and improved performance.

Manual Targeting

Manual targeting gives you more control over your campaign, in exchange for a little more work. You select exactly which keywords or products to target and set individual bids for each. You can focus on either keyword targeting or product targeting within a campaign or ad group, but not both at the same time.

With keyword targeting, you can rely on Amazon’s keyword suggestions, your own keyword list, or a combination of both. Alternatively, product targeting lets you go after specific ASINs or product categories. You can target direct competitors, similar listings, or complementary products. Amazon allows you to refine category targeting by brand, price range, average rating, and more. Like I discussed earlier, I often pull converting ASINs and keywords from automatic campaigns and plug them into manual product targeting campaigns for more control on bids, ad spend, etc.

Keyword Match Types Explained

If you’re using manual keyword targeting, you’ll need to choose a match type. This controls how closely a customer’s search must match your keyword to trigger your ad. There are three match types to know:

Broad match gives you the widest reach and often the lowest CPCs. Your ad can show for synonyms, variations, or loosely related terms, even if the customer isn’t searching exactly for your product. For example, a broad match on “dog bed” might trigger ads for “pet crate” or “dog pillow for car,” even though those shoppers may not be looking for a bed. Because of this, it’s essential to use a strong negative keyword list. Without one, broad match can quickly burn through your budget on irrelevant clicks.

Phrase match is the middle ground between broad and exact. Your ad shows when the search includes your keyword phrase in the exact order, though other words may appear before or after. A phrase match on “Doppler cotton sheet set” could trigger an ad for “king Doppler cotton sheet set” or “buy Doppler cotton sheet set online.”

Exact match gives the tightest control and usually the highest conversion rate. Your ad only shows when the search term matches your keyword exactly, including plurals. This helps keep traffic highly relevant, though CPCs can be higher depending on competition.

Before launching manual campaigns, I strongly recommend building a solid keyword list using a reliable keyword tool. Guessing can be expensive and time-consuming. Using data-backed insights from tools like Helium 10 or Jungle Scout can help you find keywords that are actually converting. If you’re looking for a starting point, here’s my list of the 7 best Amazon keyword research tools.

How to Create a Sponsored Product Campaign (Step-by-Step)

If you’re ready to launch your first Sponsored Product campaign, this walkthrough will show you how to set up a manual targeting campaign inside Seller Central. Manual campaigns give you more control over targeting, bidding, and individual keywords, making them a smart choice once you’ve gathered some keyword insights or built your own keyword list.

If you’re looking for help setting up an automatic targeting campaign instead, check out our Beginner Guide to Amazon Advertising.

Step 1. Log in to Seller Central and Open Campaign Manager

Start by logging into your Amazon Seller Central account. From the main dashboard:

• Go to the Advertising tab
• Click Campaign Manager
• Select Create campaign

You’ll be presented with a few ad types: Sponsored Products, Sponsored Brands, and Sponsored Display. Choose Sponsored Products, then click Continue to begin setting up your campaign.

Step 2. Name Your Ad Group and Choose Products

Next, you’ll create an ad group, which is where you’ll select the products to advertise and organize your targeting settings.
Give the ad group a name that clearly identifies what it’s about—for example, something like KW_Exact_YogaMat_Black.

When starting out, it’s usually best to create one ad group per campaign to keep things simple and organized.

Now choose the product or products to include in this ad group. For your first campaign, I recommend adding only one product per ad group, ideally, a product with a fully optimized listing and good reviews. This makes tracking results and optimizing performance easier.

Step 3. Choose Your Targeting Options

You’ll now select a targeting method. For this example, we’ll choose Manual Targeting, but Automatic Targeting definitely has its place as well. Once you select manual targeting, you’ll see two options:

• Keyword Targeting
• Product Targeting

We’re going with Keyword Targeting, which allows you to tell Amazon exactly which search terms you want your ad to show for. If you choose Product Targeting, you can still follow along, but instead of keywords, you’ll need to search for specific products or upload your own list of product ASINs where you want Amazon to display your advertisement.

Step 4. Add Keywords

Now it’s time to add your keywords, the search terms that will trigger your ads. Amazon offers keyword suggestions based on your product, but you can (and should) enter your own keywords too. If you’ve done prior keyword research or used tools like Helium 10, this is where that list comes in handy.

For each keyword, select a match type:

• Broad Match: Matches similar terms, variations, and related searches.
• Phrase Match: Matches searches that contain your exact phrase.
• Exact Match: Only matches searches that are nearly identical to your keyword.

Each match type behaves differently. I usually start with Exact and Phrase Match in separate campaigns to maintain tighter control, especially when testing.

A solid starting point is to add around 10 to 15 highly relevant keywords per ad group. From my experience, if you go higher than this, Amazon struggles to allocate your budget properly, and you wind up with some keywords getting almost no ad spend, making it very difficult to optimize your campaigns.

Step 5. Set Your Keyword Bids

Now it’s time to set your bids, the maximum amount you’re willing to pay per click for each keyword.

Amazon will show a suggested bid for every keyword. These are based on internal data, including how that keyword has performed both in your account and across Amazon more broadly. Suggested bids can give you a useful starting point, especially if you’re new or don’t have any campaign history yet.

That said, they’re not perfect. Suggested bids can be inconsistent and sometimes way too high to be profitable. I’ve seen bids fluctuate dramatically for similar keywords, so don’t treat them as gospel. Think of them more as a signal of how competitive a keyword might be.

What matters most is setting a bid that fits your margins and gives you a chance to show up in the auction.

For the same keyword across different match types, a tiered bidding strategy often works best: highest for Exact, a bit lower for Phrase, and the lowest for Broad.

Step 6. Choose Your Campaign Bidding Strategy

Next, choose how Amazon should adjust your bids based on the likelihood of a conversion. Your options are:

• Dynamic bids – up and down: Amazon adjusts your bid up or down based on real-time conversion likelihood.
• Dynamic bids – down only: Amazon lowers your bids when your ad is unlikely to convert. Best for beginners.
• Fixed bids: Amazon always uses the bid you set, with no adjustment.

You’ll also see the option to adjust bids by placement, like Top of Search or Product Pages. You can leave this section blank for now unless you already know where your ads perform best. It’s usually best to wait until you have data before making adjustments here.

Step 7. Name Your Campaign and Set Your Budget

Finally, name your campaign. Just like your ad group name, it’s important to use a consistent format to help keep things organized. For example: SP_Manual_KW_Exact_YogaMat_Black

Now choose your daily budget. This sets the maximum amount you’re willing to spend per day on this campaign. I recommend starting with at least 2x your product’s price, so if you sell a $25 item, set a budget of $50. That gives Amazon enough room to drive impressions and clicks, so you can gather useful data and optimize your campaign.

If you’re starting on a tighter budget, you can go lower; something like $10/day is a common minimum, but understand that this may limit your number of impressions and slow down the pace at which your campaign gathers data. A low budget combined with high bids (e.g., $1+ per click) can burn through your spend quickly with only a handful of clicks, which isn’t enough to effectively optimize your campaign.

Set a start date, and unless you’re running a short-term promotion, you can leave the end date blank. This will keep the campaign running continuously.
Lastly, you’ll have the option to advertise in additional marketplaces. Unless you’re business sells internationally, stick to your primary marketplace—like the U.S.

Step 8. Review and Launch Your Campaign

Before hitting launch, take a final pass through all your campaign settings:

• Is the campaign name clear and specific?
• Is the daily budget realistic for your goals?
• Are the right products included in the ad group?
• Are your keyword match types and bids correct?

Once everything looks good, click Launch campaign.

Your Sponsored Product ad should start showing within about 30–60 minutes. After launch, resist the urge to make immediate changes. I usually let new campaigns run for at least 7–14 days before making big optimizations. This gives Amazon enough time to gather data and stabilize performance.

How to Optimize Amazon Sponsored Product Campaigns

Launching your ads is just the beginning. If you want to get real results with Sponsored Product Ads, you need to actively optimize your campaigns.

This means tracking performance, updating your keywords, and adjusting your bids based on real data. The goal is to cut wasted spend, double down on what’s working, and improve efficiency over time. Here’s how to do it.

Analyze Performance Data and Reports

After your campaign has been live for a week or two, start reviewing your performance data. Don’t rush, Amazon needs time to gather enough impressions, clicks, and sales to give you useful insights.

Focus on these core metrics:

• Impressions show whether your keywords are getting visibility.
• Clicks and CTR (Click-Through Rate) tell you how compelling your ads are.
• CPC (Cost Per Click) shows how much you’re paying for traffic.
• Conversion Rate and ACoS (Advertising Cost of Sales) reveal how efficiently your ads turn clicks into purchases.

Another important metric I track is TACoS (Total Advertising Cost of Sales). It tells you how ad spend compares to total revenue, not just PPC sales. A low TACoS usually means your ads are helping boost your organic search rank. You can easily view all of these important metrics from your Campaign Manager Overview.

Once you’re comfortable reading the performance data, dig deeper with your campaign reports—especially the Search Term Report. This is where the real insights live. It shows exactly what shoppers typed before clicking and which terms actually converted. Combine this with the Targeting, Placement, and Advertised Product reports to identify wasted spend, uncover new keyword opportunities, and fine-tune your bidding and targeting strategies.

You can access all of these reports from the “Measurements & Reporting” section in your Amazon Advertising account.

Optimize Keywords

Once you’ve gathered enough data, start refining your keyword strategy.

If you’re running an auto campaign, I recommend finding your most profitable keywords in that campaign and moving them into their own separate manual campaigns using exact match. This lets you focus your ad spend on keywords that are already working. Add those same terms as negatives in your auto campaigns to avoid overlap and waste.

It’s also important to remove keywords that aren’t converting. My basic recommendation is that if a keyword has 10 or more clicks without a sale, that’s usually a sign to lower your bid or pause it. On the flip side, if a converting keyword isn’t getting many impressions, try raising your bid slightly.

Implement Negative Targeting

If you didn’t add any negative keywords when you launched your campaign, now’s the time to start. Using negative keywords helps you cut wasted ad spend. When you spot search terms in your report that have lots of clicks but no sales after 20 or more clicks, it’s time to block them.

Use Negative Phrase or Negative Exact, depending on how specific you want to be. I usually start with Phrase unless I need more precision.

If you’re using product targeting or running auto campaigns, you can also use negative ASIN targeting to remove your ad from any product pages that aren’t converting well.

It’s important to point out that negative targets aren’t permanent. You can always remove them in the future or use the same keywords in other ad campaigns.

Adjust Your Bids

Bidding should be adjusted regularly, not just once. Every week or two, check in on performance and adjust accordingly:

• Increase bids for keywords that convert but don’t get enough impressions.
• Decrease bids for high ACoS terms or keywords with lots of clicks and no sales.
• Pause any keyword that’s burning through budget without results.

Use the Placement Report to see where your ads perform best. If you’re getting strong results at the top of search, consider adding a placement bid adjustment. Just go slow, this setting can increase spend quickly. I usually wait until I have two full weeks of data before tweaking placement bids.

Your bidding strategy also matters. I typically start with Dynamic Bids – Down Only to stay conservative. If performance is strong, I may test Up and Down to gain more visibility.

Common Mistakes to Avoid in Your Sponsored Product Campaigns

Even experienced sellers can lose money on Sponsored Product ads by repeating the same avoidable mistakes. Here are five issues I see regularly:

• Neglecting Product Listing Optimization
  Your ad is only as strong as your listing. If your title, images, bullet points, or reviews aren’t converting traffic, you’re just wasting money. A weak product page leads to poor conversions. That keeps your ads from performing well, no matter how much you spend.
• Not Utilizing Negative Targeting
  Like we just discussed, skipping negative keywords and ASINs causes your ads to show up for irrelevant or low-converting searches. This eats into your budget and drags down performance. Use your Search Term Report to find and block terms that burn spend without producing results.
• Making Changes Too Soon or Too Often
  This is a common one, especially with new advertisers. Amazon campaigns need time to stabilize. If you adjust bids or targeting every few days, the system never has a chance to optimize. Let your campaigns run for at least one to two weeks before making any major changes.
• Poor Use of Automatic Campaigns
  Automatic campaigns are a discovery tool, not a long-term strategy. Many sellers forget to move high-performing terms into manual campaigns. Others fail to block those same terms in their auto campaigns after harvesting them. This leads to duplicate targeting and wasted ad spend as your campaigns compete with each other for the same keywords.

FAQs About Sponsored Products on Amazon

Conclusion: Sponsored Products: Still the Backbone of Amazon PPC

Years into selling, I still rely on Sponsored Products more than any other ad type. They’re consistent, scalable, and directly tied to purchase intent

But like anything worth doing, they require effort. Set clear goals, review your performance regularly, and don’t be afraid to start small and scale up. With the right strategy, Sponsored Products can quietly power your Amazon business for years to come.

Recommended Articles:

• What is Amazon PPC? The Ultimate 2025 Beginners Guide to Advertising on Amazon
• 7 Best Amazon Keyword Research Tools in 2025
• 7 Best Amazon PPC Tools Every Seller Should Know in 2025