What Is Amazon PPC? How It Works, With a UK Example

Amazon PPC (pay-per-click) is advertising on Amazon where you pay only when a shopper clicks your ad. On amazon.co.uk it mainly means sponsored ads: Sponsored Products, Sponsored Brands and Sponsored Display. You set a bid and a budget, an auction decides where your ad shows and what each click costs, and you judge it by the profit the clicks bring.

Amazon PPC meaning, in plain terms

PPC describes how you pay, not where the ad appears. Amazon’s own guide says “PPC and CPC are describing the same thing”: a fee is charged each time an ad is clicked. Impressions on their own cost you nothing with cost-per-click ads.

So when a seller says “my PPC”, they usually mean their sponsored ads campaigns in Seller Central and the money going through them. The number that matters is not clicks or even sales from ads. It is whether each pound of ad spend leaves you with more profit than it cost. That is how we run the Amazon PPC management side of our services: every campaign is judged against the product’s margin, not ACoS alone.

How Amazon PPC works, step by step

Pick the product and the ad type. Amazon recommends starting with Sponsored Products. Your selling account must be on the Professional plan, and the product must be eligible for the Featured Offer (the Buy Box).
Choose targeting. With automatic targeting, Amazon matches your ad to keywords and products similar to yours. With manual targeting, you choose the keywords or products yourself.
Set a bid and a daily budget. The bid is the most you are willing to pay for a click. Amazon notes that budgets are not spread evenly through the day, so a small daily budget can run out early when demand is high.
The auction runs on each search. Amazon says the final cost per click is “usually determined by an auction and is based on your adjusted bid plus additional factors”, and that factors beyond the bid decide placement too. Amazon describes its pricing as “a form of generalized ‘second-price’ auction” and says “in no scenario does an advertiser pay more than their bid”.
A shopper clicks and you are charged. Costs are normally taken from your selling account balance.
The shopper buys, or doesn’t. Sales linked to the click show in your campaign reports, and that is where ACoS and ROAS come from.

One thing to know about step 4: in the US, the FTC and 22 state attorneys general sued Amazon on 31 August 2026, alleging a hidden reserve price in Sponsored Products auctions led advertisers to overpay. Amazon disputes this. It is a US case, but a reminder to watch the cost per click you actually pay.

Keyword match types

With manual keyword targeting you choose how closely a shopper’s search must match your keyword. These are Amazon’s definitions:

Broad: the search can contain your keyword’s words in any order, plus variations, synonyms and related terms.
Phrase: the search contains all the words of your keyword in the same order.
Exact: the search matches your keyword word for word, in the same order. Amazon calls it the most restrictive option.
Negative keywords: stop your ad showing on searches you don’t want, such as a term that gets clicks but never sells.

A common working routine: let automatic and broad campaigns find search terms, give the ones that sell at a profitable ACoS their own exact-match keyword with its own bid, and add the ones that waste money as negatives.

Which Amazon ad type to use, and when

Ad type	What the shopper sees	Who can use it in the UK	Use it when
Sponsored Products	A single product listing, in or beside search results and on product pages	Professional sellers; the product must be eligible for the Featured Offer	You are starting out, or you want sales on a specific product.
Sponsored Brands	Your brand with an image, a video or a collection of products, linking to your Store or a product page	Sellers enrolled in Brand Registry (which needs a registered trademark)	You have a range, want shoppers to see the brand, or want to protect searches for your brand name.
Sponsored Display	Display ads on and off Amazon	Sellers enrolled in Brand Registry	You want to reach shoppers again after they have viewed or bought, using Amazon’s views and purchases remarketing.

Sponsored Products and Sponsored Brands are cost-per-click. Sponsored Brands can also be bought per 1,000 viewable impressions (vCPM) when the aim is brand visibility rather than clicks.

ACoS and ROAS: the two numbers you will see

ACoS (advertising cost of sales) = ad spend ÷ ad sales × 100. Spend £20 to make £100 of ad sales and your ACoS is 20%.
ROAS (return on ad spend) = ad sales ÷ ad spend. The same campaign has a ROAS of 5. It is the same information turned upside down.

Amazon’s own guidance is that to stay profitable, your ACoS has to be lower than your profit margin. The trap is that ACoS says nothing about margin. Your dashboard can show a comfortable ACoS on a product that is losing money each time an ad sells it. So you need your break-even ACoS first.

Worked example: what can you afford to pay per click?

This is a made-up product to show the method. Swap in your own figures. The seller is VAT-registered, and the FBA fee and costs below are illustrative, not Amazon’s rates.

Example product: bamboo chopping board	Per unit
Price the shopper pays (inc. VAT)	£24.99
VAT at 20% (one sixth of the price)	−£4.16
Referral fee (15% used here; most categories are 8% to 15%)	−£3.75
FBA fulfilment fee (example figure)	−£3.20
Landed cost (product, freight, duty, shipping to FBA)	−£7.50
Storage and returns allowance	−£0.60
Profit before ads	£5.78

Break-even ACoS = profit before ads ÷ price = £5.78 ÷ £24.99 = 23.1%. Above that, every ad sale loses money. We divide by the £24.99 the shopper pays; whichever sales figure you use, use the same one when you read ACoS in your reports.

Break-even cost per click = profit before ads × conversion rate. If 1 in 10 clicks buys (10%), you can pay up to £5.78 × 0.10 = £0.58 a click and break even. If you want £2.00 profit left on each ad sale, you have £3.78 to spend on ads, which is a target ACoS of 15.1% and a maximum of £0.38 a click.

Conversion rate (orders per click)	Break-even CPC	Max CPC to keep £2.00 profit
5% (1 in 20)	£0.29	£0.19
8%	£0.46	£0.30
10% (1 in 10)	£0.58	£0.38
12%	£0.69	£0.45
15%	£0.87	£0.57

How 40 clicks turn into profit, or a loss

Say a campaign gets 40 clicks and 4 orders (10%), so £99.96 of ad sales and £23.12 of profit before ads.

At £0.45 a click: spend £18.00, ACoS 18.0%, ROAS 5.55. You keep £5.12.
At £0.70 a click: spend £28.00, ACoS 28.0%, ROAS 3.57. You lose £4.88.

A 28% ACoS would not alarm many sellers. On this product it means paying to sell. Some sellers accept a loss on ads at launch to build sales history. That can be a fair call, as long as it is a decision with a budget and an end date, not an accident.

So work out break-even ACoS per product, set bids from margin and conversion rate, and check the cost per click you actually pay.

Running it yourself, or getting help

Plenty of sellers run their own PPC well. If you would rather have someone else do it, Evolve Brands is paid differently from most agencies: our fees are a base fee plus a share of gross profit, not a percentage of sales or ad spend, so ad spend that doesn’t make money doesn’t help us either. We also sell our own brands on Amazon and test tactics there first. You can read more about Iain and how Evolve works.

If you want to see where your account is losing profit, book a free account audit. It covers PPC, listings and margins, and you keep it either way.

Questions people ask

Do I need Brand Registry for Amazon PPC?

Not for Sponsored Products: a Professional selling account and a product eligible for the Featured Offer are enough. Sponsored Brands, Sponsored Display and Stores need Brand Registry, which needs a registered trademark.

What is a good ACoS on Amazon UK?

There isn’t one number. A good ACoS is one below your break-even ACoS, which is your profit before ads divided by the price. In the example above that is 23.1%, so 18% made money and 28% lost it.

How much does Amazon PPC cost per month?

As much as you set. Sponsored Products has no monthly or upfront campaign fee and Sponsored Brands has no minimum spend on cost-per-click or vCPM campaigns: you choose a daily budget and pay per click. You also need the Professional selling plan, which Amazon UK lists at £25 a month excluding VAT.

Can I advertise a product if I don’t have the Buy Box?

Sponsored Products needs the product to be eligible for the Featured Offer, Amazon’s name for the Buy Box. Amazon says Sponsored Brands and Sponsored Display can show regardless of who holds it.

What is Amazon PPC and how does it work?