Amazon PPC Explained: How to Reduce ACoS and Increase Sales in 2026

Amazon PPC (Pay-Per-Click) advertising is one of the most powerful ways to grow sales on Amazon. However, many sellers struggle with high ACoS, wasted ad spend, and low conversions due to poor campaign structure and lack of optimization.

In this guide, we’ll explain what Amazon PPC is, how it works, and proven strategies to reduce ACoS while increasing sales in 2026. Whether you are a beginner or an experienced Amazon seller, this guide will help you make smarter advertising decisions.

What Is Amazon PPC?

Amazon PPC is an advertising model where sellers pay Amazon only when a shopper clicks on their ad. These ads appear in high-visibility areas such as:

• Search results pages
• Product detail pages
• Sponsored placements across Amazon

Amazon PPC allows sellers to reach high-intent buyers who are already searching for products similar to theirs.

Types of Amazon PPC Ads

Understanding the different ad types is essential for success.

1. Sponsored Products

These ads promote individual product listings and are the most commonly used PPC ads on Amazon.

Best for:

• Increasing product visibility
• Driving direct sales
• Keyword targeting

2. Sponsored Brands

Sponsored Brands ads feature your brand logo, headline, and multiple products.

Best for:

• Brand awareness
• Higher CTR
• Promoting product collections

3. Sponsored Display

These ads target shoppers based on interests, browsing behavior, or competitor products.

Best for:

• Retargeting
• Competitor targeting
• Expanding audience reach

What Is ACoS and Why It Matters?

ACoS (Advertising Cost of Sales) measures how much you spend on ads to generate sales.

Formula:

ACoS = (Ad Spend ÷ Ad Sales) × 100

A lower ACoS means higher profitability, while a high ACoS indicates wasted ad spend.

Proven Strategies to Reduce ACoS in 2026

1. Optimize Your Product Listings First

Running ads on a poorly optimized listing is a common mistake.

Before launching PPC campaigns, ensure:

• High-quality product images
• Keyword-optimized title and bullet points
• Clear product benefits
• Competitive pricing

Better listings = higher conversion rate = lower ACoS.

2. Structure Campaigns Properly

Avoid mixing everything in one campaign.

Recommended structure:

• Auto campaigns (keyword discovery)
• Manual campaigns (exact, phrase, broad match)
• Separate branded and non-branded keywords

This structure helps control spend and optimize performance efficiently.

3. Use Search Term Reports Regularly

Amazon’s search term report shows what customers actually typed before clicking your ad.

Use it to:

• Add converting keywords to exact match
• Add irrelevant terms as negative keywords
• Reduce wasted spend

4. Focus on High-Intent Keywords

Not all keywords are equal.

Target:

• Buyer-intent keywords
• Long-tail keywords
• Keywords with proven conversions

Avoid spending too much on high-volume but low-conversion keywords.

5. Optimize Bids Strategically

Instead of raising bids blindly:

• Increase bids for high-converting keywords
• Reduce bids for keywords with high ACoS
• Pause keywords that don’t convert after sufficient data

Common Amazon PPC Mistakes to Avoid

• Running ads without keyword research
• Ignoring negative keywords
• Not optimizing listings before advertising
• Letting campaigns run without monitoring
• Chasing impressions instead of conversions

Avoiding these mistakes can save thousands in ad spend.

Why Work With an Amazon PPC Agency?

Managing Amazon PPC effectively requires:

• Data analysis
• Continuous optimization
• Strategic scaling

An experienced Amazon PPC agency helps sellers:

• Reduce ACoS
• Increase ROI
• Scale campaigns profitably

Professional management ensures your ad budget is used efficiently.

Final Thoughts

Amazon PPC is not about spending more—it’s about spending smarter. With the right strategy, optimized listings, and continuous campaign management, sellers can reduce ACoS and grow sales consistently in 2026.

If you want expert help managing your Amazon advertising campaigns, working with a specialized Amazon PPC agency can make a measurable difference.