Key Takeaways
- Start with Sponsored Products. They reach shoppers who are already searching, you pay only when someone clicks, and there is no minimum spend.
- Cost is set by an auction, not a price list. Your cost per click depends on your category, the keywords you bid on, the placement, the season and how well your listing converts.
- Know your break-even ACoS before you spend. If your advertising cost of sale is higher than your profit margin before ads, every ad sale loses money.
- Fix the product page first. Ads send traffic; the listing turns it into sales. Products that are out of stock or not winning the Featured Offer do not show ads at all.
- Add formats in order. Sponsored Brands and Sponsored Display come next, then Sponsored TV and Amazon DSP when you are ready to pay for awareness.
Advertising on Amazon means paying to put your products or brand in front of shoppers on Amazon and across Amazon's network of sites, apps and streaming TV. Most brands start with Sponsored Products, which appear in search results and on product pages and charge per click. As sales grow, they add Sponsored Brands, Sponsored Display, and later Amazon DSP and Sponsored TV for reach beyond people already searching.
This guide explains every Amazon ad type in 2026, what drives what you pay, and the order we use to start a brand, based on 15 years of running Amazon advertising for product brands.
What is Amazon advertising?
Amazon Ads is Amazon's advertising business. It sells ad space on Amazon itself (search results, product detail pages, the home page), on Amazon-owned properties such as Prime Video, Twitch and Fire TV, and on third-party sites and apps through its programmatic platform. Amazon is now one of the three largest sellers of digital advertising in the US, alongside Google and Meta.
What makes Amazon different from Google or social ads is where the shopper is. Someone searching "stainless steel water bottle" on Amazon is usually ready to buy, and Amazon can see whether the ad led to a purchase. That closed loop is why Amazon advertising has become a required line in most product brands' budgets, not an experiment.
Who can advertise on Amazon?
- Sellers with a Professional selling account in Seller Central (3P, third party) can run Sponsored Products.
- Brand owners enrolled in Amazon Brand Registry can also run Sponsored Brands and Sponsored Display.
- Vendors who sell wholesale to Amazon through Vendor Central (1P, first party) can run the sponsored ad types.
- Any business, even one that does not sell on Amazon, can buy Amazon DSP and streaming TV ads.
What types of Amazon ads are there?
There are six ad products most brands will use. The table below shows what each is for and what drives its cost. We do not print average prices here: they swing widely by category and season, and any single number would mislead you.
| Ad type | What it is for | Where it shows | How you pay | Main cost drivers |
|---|---|---|---|---|
| Sponsored Products | Sales from shoppers already searching | Search results and product detail pages | Cost per click (CPC) | Keyword competition, bid, placement, conversion rate |
| Sponsored Brands (including video) | Brand visibility at the top of search, defending branded searches | Top of and within search results; video in search | CPC, with a viewable impression option for awareness | Headline keyword competition, creative quality, Brand Store quality |
| Sponsored Display | Retargeting shoppers and targeting competitor or related product pages | Product pages, Amazon home page, and off Amazon | CPC or cost per thousand viewable impressions (vCPM) | Audience size, targeting choice, creative |
| Sponsored TV | Awareness on streaming TV without a big minimum | Prime Video, Twitch, Fire TV and other streaming apps | Cost per thousand impressions (CPM) | Audience, frequency, video production |
| Amazon DSP | Reach and retargeting at scale, on and off Amazon | Amazon sites, Prime Video, third-party sites and apps, audio | CPM | Audience, inventory type, frequency, minimums on managed service |
| Amazon Marketing Cloud (AMC) | Measurement and audience building, not an ad itself | Analytics environment | No media cost; needs technical setup | Data and analysis time |
Sponsored Products
Sponsored Products promote a single listing to shoppers as they search and browse. You target keywords or specific products, set a bid, and pay only when someone clicks. They are the right first ad for almost every brand because they reach shoppers who are actively looking for something like your product. Setting one up takes four decisions: which products to advertise, which keywords or products to target (or an automatic campaign that lets Amazon choose), your bid, and your daily budget.
Sponsored Brands
Sponsored Brands show your logo, a custom headline and several products, or a video, usually at the top of search results. Shoppers can go to a product page or to your Brand Store. Clicks usually cost more than Sponsored Products because the placements are prominent and they build the brand as well as sell. Sellers need Brand Registry to use them. They are also the main defense when competitors bid on your brand name.
Sponsored Brands video
Video ads in search results autoplay silently and stand out on a page of still images. They link to the product page, and they tend to earn their keep in categories where the product needs to be seen in use. The video needs to work without sound and show the product in the first two seconds.
Sponsored Display
Sponsored Display reaches shoppers based on what they viewed or bought, or places your ad on specific product pages, including competitors'. Use it to bring back shoppers who viewed your product and left, or to put your product on the pages of complementary and competing items. It is easy to waste money here with broad audiences, so start narrow.
Sponsored TV and Amazon DSP
Sponsored TV is Amazon's self-service streaming TV ad, with no minimum spend, sold on a cost per thousand impressions basis. Amazon DSP (demand-side platform) is the programmatic platform for display, video, audio and Prime Video ads, on and off Amazon, bought on a cost per thousand viewable impressions basis. DSP also offers Amazon-built creative options, such as e-commerce creatives built from your product page images. Both are awareness tools: they pay off for brands that already convert well on Amazon and have the budget to reach new audiences. See our Amazon DSP and AMC services.
Free brand tools that support your ads
A Brand Store (your free multi-page storefront on Amazon) and A+ Content (enhanced product page content for brand owners) are not ads, but they decide how much of your ad traffic converts. Build them before you scale Sponsored Brands.
How much does Amazon advertising cost?
There is no set price. Sponsored ads run on a real-time auction: you set the most you are willing to pay per click, and the price you actually pay depends on what competing advertisers bid for the same shopper. There is no minimum budget for Sponsored Products, Sponsored Brands or Sponsored Display.
What drives your cost per click?
- Category competition. Crowded categories with high-margin products attract more bidders.
- Keyword intent. Broad, high-volume terms usually cost more than specific long-tail terms, and often convert worse.
- Placement. Top of search costs more than product page placements.
- Season. Prime Day, Black Friday, Cyber Monday and Q4 push bids up across most categories.
- Your listing. Amazon favors ads that get clicked and convert, so a strong listing lowers what you pay for the same visibility.
- Bid strategy. Dynamic bidding up and down, and placement adjustments, change what you pay per click.
How do you know if your ads are profitable?
Three measures matter:
- ACoS (advertising cost of sale) is ad spend divided by the sales those ads produced.
- TACoS (total advertising cost of sale) is ad spend divided by all sales, paid and organic. It shows whether ads are building the business or just renting it.
- Break-even ACoS is your profit margin before ad costs. If you keep 30% of the price after product cost, Amazon fees and shipping, your break-even ACoS is 30%.
A 30% ACoS is healthy on a product with a 45% margin and a loss on one with a 25% margin. That is why "what is a good ACoS" has no single answer, and why an agency that talks only about ACoS without asking about your margin is optimizing a ratio, not your business. Our Amazon PPC guide goes deeper on bidding and campaign structure.
Not sure your ad spend is paying for itself?
Book a free 30-minute strategy call. We will look at your campaigns against your real margins and tell you the first three things we would change.
How do you start advertising on Amazon?
- Set one goal per campaign. Decide whether you want brand awareness, consideration, more traffic to a product page, better sales on an existing product, or a new product launch. Each goal needs a different campaign and a different measure of success.
- Pick the right products. Advertise products that are in stock and priced to win the Featured Offer (the Buy Box). If a product is out of stock or not winning the Featured Offer, its ads stop showing. For sales, start with your best sellers; for launches, pair the new product with a proven one.
- Make the product page retail ready. A clear title that front-loads the main keyword on mobile, sharp images, benefit-led bullet points, A+ Content and enough reviews to earn trust. See how to optimize your Amazon listing.
- Work out your break-even ACoS. Know the number before the first dollar is spent, so you can tell a good result from an expensive one.
- Launch Sponsored Products. Run an automatic campaign to discover search terms alongside a manual campaign on the keywords you already know matter.
- Harvest and prune every week. Move search terms that convert into manual campaigns, and add terms that spend without selling as negative keywords.
- Add Sponsored Brands and Sponsored Display. Once Sponsored Products are profitable, protect your brand name and retarget shoppers who viewed but did not buy.
- Measure TACoS monthly. If total sales grow while TACoS holds or falls, ads are building the business. Then consider Sponsored TV, DSP and Amazon Marketing Cloud.
Which Amazon ad type should you use for your goal?
| Your goal | Start with | Then add |
|---|---|---|
| Launch a new product | Sponsored Products (automatic and manual) | Sponsored Brands featuring the new product with a proven one |
| Grow sales of proven products | Sponsored Products on converting keywords | Sponsored Brands at the top of search |
| Stop competitors taking your branded searches | Sponsored Brands and Sponsored Products on your brand name | Sponsored Display on your own product pages |
| Win back shoppers who did not buy | Sponsored Display retargeting | Amazon DSP retargeting at scale |
| Reach new audiences | Sponsored TV | Amazon DSP, measured with Amazon Marketing Cloud |
What should manufacturers and CPG brands know about Amazon ads?
- Coordinate ads with inventory. Raising bids on a product three weeks from a stockout is the most common expensive mistake we see. Whoever runs your ads needs to see your stock.
- Watch your retail pricing. Deals and coupons you fund on Amazon are visible to your retail buyers. Plan promotions across channels.
- Control who sells your products. If unauthorized resellers win the Featured Offer, your ads can end up driving their sales. Clean up distribution with brand protection before you scale spend.
- Vendor Central brands can use the same sponsored ads, but promotions and pricing work differently than in Seller Central, so plan them with your vendor manager terms in mind.
- Measure beyond Amazon. If you send traffic from social or email to Amazon, use Amazon Attribution to see what it produced.
What are the most common Amazon advertising mistakes?
- Advertising a weak listing. Paying for clicks to a page that does not convert raises your cost per sale and teaches Amazon your ad is not relevant.
- Judging by ACoS alone. A low ACoS can mean you are only bidding on your own brand name and missing growth.
- Never adding negatives. Search terms that spend without selling quietly drain budget month after month.
- Running out of budget by noon. Capped campaigns miss the evening hours when many shoppers buy.
- Setting and forgetting. Bids, competitors and seasons change weekly. So should your campaigns.
If you would rather have a team run this, see our Amazon PPC management service or the PPC and advertising hub for more guides.
Frequently Asked Questions
How much does it cost to advertise on Amazon?
There is no set price and no minimum budget for sponsored ads. Clicks are priced by a real-time auction, so cost depends on your category, keywords, placement, season and how well your listing converts. Set a daily budget you can afford and judge results against your break-even ACoS.
What is the best Amazon ad type for beginners?
Sponsored Products. They reach shoppers who are already searching, charge only for clicks, and need nothing more than a Professional seller account or Vendor Central access. Add Sponsored Brands and Sponsored Display once Sponsored Products are profitable.
Do I need Brand Registry to advertise on Amazon?
Not for Sponsored Products. Sellers do need Amazon Brand Registry to run Sponsored Brands and Sponsored Display, and to build a Brand Store and A+ Content, which help ads convert.
What is a good ACoS on Amazon?
A good ACoS is one below your break-even ACoS, which is your profit margin before ad costs. A 30% ACoS is healthy on a product with a 45% margin and a loss on one with a 25% margin, so compare ACoS to your own margin, and watch TACoS to see whether ads grow total sales.
Is Amazon advertising worth it?
For most brands selling on Amazon, yes, because shoppers there are ready to buy and a large share of search result space is sponsored. It is worth it when the listing converts, the product is in stock and priced to win the Featured Offer, and spend is managed against margin.
What is the difference between Amazon PPC and Amazon DSP?
Amazon PPC usually means the sponsored ads (Sponsored Products, Sponsored Brands, Sponsored Display) that charge per click and target search and shopping intent. Amazon DSP is a programmatic platform that buys display, video and audio ads by the thousand impressions, on and off Amazon, and is used for reach and retargeting.