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Start Amazon ads only once a listing converts on its own, then begin with Sponsored Products on automatic targeting for two to four weeks and move the search terms that sell into manual campaigns. Judge spend by total advertising cost of sales across the account rather than the ACOS of one campaign, and treat the first month as paid research.
Updated · 3 min read
Advertising amplifies whatever a listing already does. Sending paid traffic to a product with a weak main image, four bullet points and two reviews buys expensive proof that it does not convert. Before the first campaign: a main image that meets Amazon's requirements, a full image stack, a title and bullets written for the searches buyers actually type, enough reviews to not look abandoned, the Buy Box, and stock.
If any of those are missing, fix them first. Our listings guide covers the order to work in. The cheapest advertising improvement is almost always on the listing, not in the campaign.
Sponsored Products are the workhorse: single products, shown in search results and on other product pages, available to any professional seller, and where most of the spend should go. Sponsored Brands put a headline, a logo and several products at the top of results and require Brand Registry. Sponsored Display reaches shoppers who viewed your products or similar ones, on and off Amazon, and also requires Brand Registry.
Start with Sponsored Products. Add Sponsored Brands once the trademark and Brand Registry are in place and there is more than one product worth showing together. Sponsored Display comes last, when there is enough traffic to retarget.
One automatic campaign per product group with a modest daily budget. Automatic targeting lets Amazon match the listing to searches and products it thinks are relevant, which is crude but fast, and the search term report it produces is the point of the exercise.
After two to four weeks, read that report. Terms that produced sales move into a manual campaign with exact match and their own bids. Terms that spent without selling become negative keywords in the automatic campaign so it stops buying them. Repeat monthly. That harvesting loop is most of what good Amazon advertising management consists of.
ACOS is advertising cost of sales: ad spend divided by the sales those ads produced. TACOS is total advertising cost of sales: ad spend divided by all sales, organic included. TACOS is the better account-level measure because advertising lifts organic rank, so a campaign that looks expensive on its own ACOS can be paying for itself in organic sales.
Break-even ACOS is your margin after Amazon's fees. A product with a 35 percent margin after referral and fulfillment fees loses money on any sale above 35 percent ACOS, which may still be worth it during a launch and is not worth it as a steady state. Canada specifically: Amazon.ca is a smaller market than Amazon.com, with lower search volume and often lower competition, so budgets that look thin in the US are reasonable here.
Expect the first four to eight weeks to run above break-even ACOS while the search terms are harvested; that is the price of the data. A mature account on a sound listing settles well below its launch ACOS and holds there with monthly maintenance. Budgets for most small catalogs on Amazon.ca run from a few hundred to a few thousand dollars a month.
Our Amazon work covers the catalog, the listings, A+ content and the brand store, and the advertising that runs on top of them. The order matters: ads on a listing that has been fixed are a different business from ads on one that has not.
Below your margin after Amazon's fees. There is no universal number: a 20 percent ACOS loses money on a 15 percent margin product, and a 40 percent ACOS is fine for a launch that is buying rank.
Only where you can sell and ship. Ads follow inventory. Build the Amazon.ca listing first, then expand to Amazon.com with inventory positioned in the United States, and run separate campaigns for each marketplace.
Not for Sponsored Products. You need it for Sponsored Brands, Sponsored Display, A+ content and the brand store, which is why the trademark application is worth filing early.
The primary documents the numbers in this guide come from.
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