July 2, 2019

Amazon PPC Terminology: What You Need to Know

Amazon PPC is a renowned platform to help sellers amplify the sales of their products online. Pay Per Click or PPC Marketing for short is a technique where advertisers pay only for the ad which potential buyer clicks and views the product. To make your Amazon PPC campaign a huge success, it is essential to know the terminology behind this method. So, let’s get started.

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Three Types of Amazon PPC Ads

There are three kinds of PPC campaigns that Amazon provides so that you can make the best choice for your business.

  • Sponsored Product Ads. This is a product Ad that appears in Amazon’s organic search results. Amazon Sponsored Product Ad is easy and cheaper. Due to the fact that such advertisements are placed directly in the list of organic search results, buyers are more likely to click on it and then buy the product.
  • Sponsored Display Ads. It works in collaboration with the current Sponsored Ads function, which allows consumers to see your brand. The added ‘Display’ layer reengages buyers who have recently looked for your brand or are interested in products relevant to your goods, so you could reach more potential buyers, which are likely to purchase your items. 
  • Headline Search Ad. This ad is restricted to specific categories of products. This type of Ad is shown on the top of the search result with the company or brand logo. It is also known as a banner ad whose purpose is to get clients to click on a set of products. This kind of Amazon PPC ad provides the most comprehensive array of customization.


In Amazon PPC, there are two types of campaigns: Automatic Campaigns and Manual Campaigns.

Automatic Campaigns

In automatic campaigns, Amazon will automatically pick the keywords for you to target based on the product listing information like bullet points, title, keyword search terms, and description. Still, you will control the Bid price as well as the daily budget, but Amazon will select the keyword. You should read more about how to set up an Automatic Advertising Campaign and how to analyze its results to better understand its features.

Manual Campaigns

In Manual Ad Campaigns, on the other hand, the sellers decide which keywords will be used in the ads. There are many options on how to target the keywords that are known as Match Types. 

Keyword Match Types

Instead of identifying the keywords for your campaign, Amazon allows you to match the various kinds of searches. You can choose to show your product advertisement based on matches of the search term with the keyword for the precise search term match. There are three types of keyword match, such as:

  • Broad: Your advertisement will be triggered once a buyer searches for the keywords in any order, together with other close variations.
  • Phrase: Your advertisement will be shown only if a consumer searches for an exact keyword with other phrases showing before and after that.
  • Exact: Your advertisement will be just be shown if the consumer looks for the exact keyword, with no other phrases in the search query.

Learn how to use and properly configure the various options for Manual Advertising Campaigns in order to get better results.

Keyword Bids

A keyword bid is the highest dollar amount you’re willing to give out for every ad click. To display the product on the screen, keywords need to bid upon for which product. The bid decides whether or not the advertisement will be displayed. Usually,  keyword bids need to be higher than others to be displayed; however, there is no assurance that the highest bid will be the winner.

Suggested Bid

To win a bid for a specific keyword, you must select its specific value. If you have no idea how it should be, use the value that Amazon offers. It is called Suggested Bid. It appears next to the keyword in the current campaign. This is a good way to put the right bid if you are setting up an advertising campaign for the first time and do not yet know all the features.

Attributed Sales

An attributed sale is the whole product sales made in one week of clicks on advertisements. Your sale data can begin forty-eight hours to populate. Thus, sales data isn’t accessible in Today date range and might be postponed to the date range of Yesterday. You can see the total individual sales for the advertised product and other products as well in the Campaign Performance statement.


An impression is how many times your advertisements were shown. Once determined, it might take up three days to eliminate unacceptable clicks from the reports. The last 3 days' clicks might be adjusted because of click invalidation.


Clicks refer to the number of times the advertisements were clicked.


Click-Through-Rate or CTR for short is a metric characterized by separating the number of clicks an advertisement gets by its whole number of impressions. Usually, CTR is shown as a percentage. For instance, if you have 1000 impressions and 20 clicks, you will have a 2% CTR.

A lot of click-through rates are below 3%.  Extremely targeted terms get higher click-through rates, normally around 5%. Broad match-type targeted keywords usually have a below 1% click-through rate.

CTR is one of the most important indicators. It is important that the CTR is at least 0.2%. If not, then the listing does not match the campaign. The seller needs to review it and make changes.

Average Cost Per Click

Average Cost Per Click is calculated once Amazon takes the amount of the costs and separates them by the amount of the clicks to provide you with an average number. This is valuable in knowing the amount of money you can give out and the ad ROI. At present, the seller is not able to see the cost of each click, so they need to take the word of Amazon regarding the cost.

Advertising Cost of Sales (ACoS)

This refers to attributed sales spent on ads. This is computed by dividing total advertisement expend by attributed sales. For instance, if you give out $4 on an ad leading to $20 attributed sales, your Advertising Cost of Sales (ACoS) would be 20%. The formula is $4/$20 = 0.20.

Conversion Rate

Conversion rate is calculated by the number of conversions divided by the number of clicks an advertisement gets. For instance, if you have 20 clicks on an advertisement and 4 people converted, that would be a 40% conversion rate. This is always measured by 1, 7 as well as thirty-day conversions.

Sales or Revenue

This is calculated if someone sees your advertisements, clicks your ad, and purchases your product.  Prices of the products change from time to time. Therefore revenue and sales are the whole things attributed to your advertisement and the amount of money which it sold for. Revenue includes the sales of many products or items in a single transaction - not like a conversion metric.


These are the most critical Amazon PPC terminology you need to know and keep in mind to become successful in your campaign. If you get used to these terminologies, you will know that executing PPC campaign on Amazon is a simple thing.  But do not forget to regularly monitor all indicators using Amazon selling stats. This will help to set up advertising campaigns correctly and optimize your costs.