A Complete Beginner’s Guide to Amazon Ads

If you’re selling on Amazon, you’ve almost certainly thought about Amazon Ads. But how do they work? With millions of shoppers browsing Amazon daily, advertising can be the key to standing out and getting sales. But if you’re new to it, Amazon Ads can feel overwhelming. That’s where this guide comes in! 

We’re going to break everything down in simple terms—what the different types of Amazon Ads are, their pros and cons, and what to watch out for. By the end, you'll have a clear understanding of how to run Amazon Ads effectively without wasting your budget (we hope).

1. Sponsored Products – The Entry-Level Powerhouse

Sponsored Products are the most commonly used Amazon Ads. These are pay-per-click (PPC) ads that promote individual product listings. They appear in search results and on product detail pages, making them highly visible to shoppers already looking for what you sell. If you use Amazon as a consumer you 100% will have seen them almost every time you search. Look for the little ‘sponsored’ icon on the product before you click. 

Why Sellers Love Sponsored Products:

• Low barrier of entry – The creative is your product so no big design briefs and videos of founders dancing to get you live. 

• Cost-effective – You only pay when someone clicks on your ad.  

• Highly visible – Your product appears where shoppers are searching. 

• Flexible budget options – Start with as little or as much as you want.

Why they may not:

• Competitive keywords can be expensive – If you’re in a crowded niche, bidding wars can drive up costs. 

• Requires ongoing management – If you set it and forget it, you might waste money on irrelevant clicks.

  
  

What to Watch Out For:

• Keyword selection is key. If you bid on broad keywords, you might attract clicks from people who aren’t ready to buy. Start with higher intent and broaden out if your budgets are modest.

• Monitor and optimise. Check your campaign reports regularly. If a keyword is costing you money but not bringing sales, it may be time to pause. 

2. Sponsored Brands – For Those Wanting to Build a Brand Identity

Sponsored Brands (formerly Headline Search Ads) promote not just one product but multiple products under your brand. These ads include your logo, a custom headline, and a selection of your products.

Why Sellers Love Sponsored Brands:

• Great for brand awareness – Showcases your brand and multiple products. 

• High-visibility placement – Ads appear at the top of search results. 

• Custom messaging – Helps create a branded shopping experience.

  
  

Why they may not:

• More expensive than Sponsored Products – You’ll need a higher budget. 

• Requires Brand Registry – You must be a registered brand on Amazon to use this feature.

  
  

What to Watch Out For:

• Creative matters. Your headline and images need to grab attention quickly.

• Test different products. Some combinations perform better than others.

3. Sponsored Display – Retargeting for Repeat Exposure

Sponsored Display ads help you re-engage with shoppers who have viewed your product but haven’t purchased it yet. These ads appear both on and off Amazon, targeting customers based on their browsing history.

Why Sellers Love Sponsored Display:

• Brings shoppers back – Retargets those who showed interest but didn’t buy. 

• No keyword research needed – Amazon uses its audience data to show ads. 

• Expands reach beyond Amazon – Appears on third-party sites and apps.

  
  

Potential Drawbacks:

• Can be costly – Since these ads target people across the internet, costs can add up quickly. 

• Lower conversion rates – Shoppers may not be in a buying mood when they see the ad.

  
  

What to Watch Out For:

• Keep an eye on ROI. High impressions don’t always mean more sales.

• Ensure your targeting is relevant. You don’t want to waste money showing ads to people who aren’t interested.

4. Amazon DSP (Demand-Side Platform) – For Bigger Budgets and Advanced Targeting

Amazon DSP allows advertisers to buy display and video ads across Amazon and external websites. It’s not just for sellers—it’s for big brands wanting to create high-impact advertising campaigns.

Why Sellers Love Amazon DSP:

• Unmatched targeting – Uses Amazon’s data to target shoppers based on interests, past purchases, and browsing behavior. 

• Supports multiple formats – Includes video, audio, and display ads. 

• Ideal for brand building – Works well for increasing awareness.

  
  

Why they won’t:

• Requires a big budget – Amazon DSP isn’t cheap and may not be the best option for small sellers. 

• More complex to manage – Unlike other Amazon Ads, it requires expert knowledge. Even for agencies, we need to apply to be able to run DSP ads. 

  
  

What to Watch Out For:

• Best suited for established brands. If you’re a small seller, start with Sponsored Products or Sponsored Brands before diving into DSP.

• Measure your success carefully. DSP works differently than PPC campaigns, so tracking ROI requires a different approach.

  
  

Common Mistakes to Avoid When Running Amazon Ads

Even experienced sellers make mistakes when running Amazon Ads. Often even the best ad campaigns have space to increase their efficiency and ROI:

Not setting a proper budget. Running ads without a budget limit can lead to overspending. Start small and scale as you see results.

Ignoring negative keywords. If you don’t exclude irrelevant keywords, you might end up paying for clicks that never convert into sales.

Not optimising ads regularly. Amazon Ads isn’t a “set and forget” system. Regularly review your campaigns to adjust bids and keywords.

Failing to track ROI. Always monitor how much you’re spending versus how much revenue your ads generate. If an ad isn’t performing, tweak it or cut it.

Overbidding on high-competition keywords. Some keywords are so competitive that bidding on them drains your budget quickly. Find a balance between search volume and cost.

Final Thoughts – Which Amazon Ad Type Should You Start With?

If you’re just getting started, Sponsored Products is the best place to begin. It’s beginner-friendly, budget-friendly, and provides a direct link between ads and sales. Once you’re comfortable, you can explore Sponsored Brands to strengthen your brand presence. If you have a bigger budget and want to expand your reach, Sponsored Display and Amazon DSP are great advanced options.

The key to success with Amazon Ads is testing and optimisation. Start small, track performance, and adjust your strategy based on data. With time, you’ll learn what works best for your products and how to maximize your return on investment.

Good luck selling! 

If that all sounds like a lot of effort you want us to manage it all for you, then drop us a line and we can get you going!