Guide
Understanding Amazon Ads
Whether you’re looking to lift brand awareness, boost consideration of your products or services, inspire conversions, or increase loyalty, we’ll give you the tools to find the right ad solution to help drive measurable outcomes. We'll help you start with an introduction to the benefits of digital advertising, information on Amazon Ads product offerings, a guide to setting advertising goals, and a glossary of common industry terminology.
Start using Amazon Ads to promote your products and create campaigns.
Create cost-per-click ads to help customers find your products on Amazon.
Inspire high-intent shoppers in the consideration phase into making a purchase.
Should I use digital advertising?
The always-on digital environment has opened up new ways for customers to discover, browse, and shop for products and brands. Digital ads can be any combination of text, image, or video, and appear everywhere from websites to social media and streaming content. Digital advertising offers several advantages:
1. New ways to reach shoppers
Increasingly, customers begin their shopping journey online. It is projected that there will be 278.33 million customers who shop online in the U.S. in 2024, according to Statista.1 This trend presents an opportunity to connect with potential shoppers online.
2. Flexible formats
One size does not fit all, and digital solutions are built with this in mind. Digital advertising offers a selection of customizable features, including a variety of creative ad formats and advertising placements.
3. Customizable budget
Unlike radio, out-of-home billboard placements, and other traditional advertising, which often require significant financial investments, digital advertising can be accessible no matter your budget.
4. Quick execution
With digital advertising, you have the ability to execute and optimize campaigns faster than with traditional types of advertising. As a result, you have the opportunity to reach audiences at the right place and the right time.
5. Real-time insights
Many digital advertising products offer real-time measurement and optimization capabilities. Track your results, see how your ads are performing, and make changes to your campaign as you go.
What does Amazon Ads offer?
With hundreds of millions of active customer accounts worldwide,* Amazon has a deep understanding of how shoppers engage with products and brands as they discover, browse, and purchase online.
Advertising with Amazon Ads can help you reach customers at every stage of their journey. Our offerings help you achieve your advertising goals while helping customers find the products they're looking for.
These self-service, cost-per-click ads for individual product listings appear in shopping results and on product detail pages.
These self-service, cost-per-click ads for brands appear in shopping results, and feature a custom headline, brand logo, and multiple products.
These self-service display ads use automatically generated ad creatives to reach audiences based on relevant Amazon shopping interests.
These free, multi-page brand destinations on Amazon feature your product portfolio and help tell your brand story.
How do I identify my advertising goals?
To get started, set advertising goals that are tailored to your desired outcomes. Explore common goals, their overall objectives, and key metrics for success.
Connect with your customers at the right time with messages that matter.
Maximize customer engagement on your website or Store.
Utilize insights that drive results, on Amazon or third-party destinations.
Keep customers coming back, and build relations that last.
What terms do I need to know?
We’ve rounded up terms that will help you navigate digital advertising. Some terms are applicable to the digital advertising industry as a whole, and some are unique to Amazon Ads.
General advertising
- Attribution: Before someone buys a product or service, they may see several ads: a radio commercial, a billboard, an online pop-up. Attribution refers to which ad was responsible for informing that purchase. Different services have different attribution models, taking into account factors such as how customers interacted with ads and when that interaction occurred relative to a purchase.
- Consumer purchase journey/consumer decision journey: A term that refers to the sum of experiences that shoppers go through when interacting with your company and brand. Instead of looking at just a part of a transaction or experience, the customer journey documents the full experience. You can map your advertising objectives to the stages of the journey, which are, typically: awareness, consideration, purchase or conversion, and loyalty.
- Demand-side platform, or DSP: The software that is used to programmatically purchase and manage digital advertising inventory from multiple publishers. The solution for Amazon Ads is Amazon DSP. Amazon DSP offers both self-service and managed options.
- Supply-side platform, or SSP: A supply-side platform, also called a sell-side platform or SSP, is technology used to help facilitate the selling of ad space on websites and apps based on impressions. It is a core part of the ad tech ecosystem, alongside demand-side platforms, agency trading desks, ad servers, and ad networks.
- Keyword: Words or phrases used to target your ads to relevant shopping queries. You may select the keywords you’d like to target with manual targeting, or let Amazon Ads select the keywords with automatic targeting.
- Placement: The place where an advertisement appears. Examples include in shopping queries on Amazon, on Amazon devices (such as Fire TV or Fire tablet), and on third-party sites.
- Programmatic: A term used in the digital advertising industry that refers to the automated buying and selling of digital advertising inventory.
- Targeting: Digital advertising services use a variety of ways to match ads with potential customers based on interests. Examples include relevant shopping queries or purchases of related products.
Advertising costs
- Budget: The maximum amount of money you will spend on your advertising campaign.
- Bid: The amount you are willing to pay to have shoppers click on your advertisement. With Amazon Ads, you can use automatic bidding (your bid will automatically be optimized to help you reach your objective), or you can choose manual bidding and set your own bid.
- Cost-per-click (CPC): The average cost you pay each time someone clicks your ad. This number is calculated by dividing the amount of money you spent on an ad divided by the number of clicks it received. Sponsored Products and Sponsored Brands are examples of cost-per-click ads, so you only pay when your ad receives clicks.
- Cost-per-thousand-impressions [technically, "cost per mille"] (CPM): The average cost you pay to deliver 1,000 impressions of your ads.
Advertising campaign results
- Advertising cost of sales (ACOS): A metric used to measure performance of Sponsored Products and Sponsored Brands campaigns. ACOS represents the ratio of ad spend to promoted product sales (Sponsored Products) or overall brand sales (Sponsored Brands). It is calculated as ad spend divided by attributed sales.
- Brand lift: A measurement of the direct impact your ads have on a shopper’s perception and behaviors toward a brand. This metric is calculated in a number of ways using post-exposure success metrics, such as brand awareness, and likelihood to purchase metrics.
- Click-through rate (CTR): The percentage of ad impressions that are clicked as compared to the entire number of impressions. The standard calculation for CTR is (clicks/impressions) x 100.
- Conversions: An action that a customer completes; this phrase can be used to refer to any number of actions, including clicking “Add to Cart,” completing a purchase, etc.
- New-to-brand metrics: New-to-brand metrics describe customers purchasing your brand/product for the first time on Amazon over the past year. These metrics gives advertisers the tools to estimate the cost of engaging new customers on Amazon and identify the most efficient channels and tactics to achieve their campaign goals.
- Impressions: The number of times an ad was rendered on a page or device.
- Reach: The total number of users who are shown the same ad on any webpage or screen.
- Return on ad spend (ROAS): A measure of how many dollars you earn for every dollar you spend on advertising. The standard calculation for ROAS is (total ad sales) / (total ad spend).
- Return on investment (ROI): A measure of how much net profit you earn for every dollar you spend. The standard calculation for ROI is
(revenue – cost) / (cost).
Where should I begin?
If you’re new to Amazon Ads and are a registered seller or vendor who sells products on the Amazon store, we recommend you begin with sponsored ads. These ad solutions are easy to set up and designed to work with a variety of budgets. Best of all, these ad types are cost-per-click, which means you only pay when a shopper clicks on your ad. When you create a sponsored ads campaign, you choose your own budget as well as the amount you want to bid for a click.
If you’re interested in using Amazon Ads to promote products or services that you do not sell on Amazon, we offer display ads, video ads, and audio ads.
Ready to get started?
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1Statista, US., 2020
*Amazon quarterly earnings release, Q1 2020. Active customer accounts represent accounts that have placed an order during the preceding 12-month period.