PPC Quick Start Guide Sponsored Display: The Amazon Retargeting Ads Explained

Q: Should I use CPC or vCPM bidding?

It depends on your goal. Use CPC (cost-per-click) when optimizing for conversions. This tells Amazon to bid for clicks, which tends to drive sales. Use vCPM (cost-per-thousand impressions) when your goal is exposure and brand awareness. For example, use vCPM if you want to saturate a category with impressions (such as for a new launch). Many advertisers use CPC for remarketing (performance) and vCPM for top-of-funnel awareness.

Gohar alvi
1 day ago
13 min read

Have you ever wondered how Amazon’s Sponsored Display ads can help you capture more customers and accelerate sales? In this comprehensive PPC Quick Start Guide Sponsored Display, we’ll walk Amazon sellers through what Sponsored Display advertising is, why it matters, and how to launch effective campaigns that drive results. By the end, you’ll understand key metrics to track (like ACoS, ROAS and CTR), and how Sponsored Display can even improve your inventory velocity and overall e-commerce success.

What are Amazon Sponsored Display Ads?

Sponsored Display is Amazon’s self-service display advertising solution that helps brands target shoppers both on and off Amazon. Unlike traditional ads that rely only on search keywords, these ads leverage Amazon’s first-party shopping data to reach customers based on their browsing and purchase behavior. Sponsored Display ads automatically generate creative (images or video) featuring your products and appear in high-visibility placements on Amazon pages and across the web.

For example, if a shopper viewed your product but didn’t make a purchase, Sponsored Display can retarget that person with an ad on Amazon or on partner sites. You can also target audiences who have shown interest in related categories. In other words, you don’t bid on search terms; you select products or audience segments as your target. It’s a different way to reach buyers—based on who they are and what they’ve browsed, not just what they searched for.

1) Brand Registry Required

Self-service Sponsored Display is only available to brands enrolled in Amazon’s Brand Registry (and Amazon vendors). This ensures only verified brand owners can use these advanced targeting features.

2) Flexible Ad Formats

Ads can be static images or videos. By default, Amazon uses your product listing image and info. You can also upload custom visuals. For images, Amazon supports standard ad sizes (e.g., 300×250 px, 728×90 px). These should be high-resolution and clear, with minimal text overlay. For video, use 6–30 second clips (1080p recommended) that can autoplay muted in the ad. Aim for engaging creatives (like product-in-use scenes) to grab attention.

In summary, Sponsored Display is Amazon’s advanced retargeting tool. It gives brands cross-channel reach, showing ads to relevant shoppers both on Amazon and on third-party sites, without requiring keyword bidding.

Why Use Sponsored Display Ads?

Sponsored Display ads are a powerful marketing tool for several key reasons. They help sellers:

1) Reach Shoppers On & Off Amazon

Sponsored Display extends your visibility beyond search results. Your ads can appear on Amazon pages (such as product detail or review pages) and on external sites/apps (like Twitch, IMDb, or news sites). This cross-platform reach builds brand awareness among relevant audiences, even if those shoppers aren’t currently searching for you.

2) Leverage First-Party Data for Targeting

Amazon uses its wealth of shopping data to serve ads.. Instead of keywords, you target customers by interests or behavior. For instance, Amazon provides segments like “in-market” shoppers for home goods or users who viewed similar products. This means your ads are shown to people likely to be interested in your products, improving relevancy and ROI.

3) Re-Engage Interested Customers

These ads excel at retargeting. If someone browses your product but leaves without buying, a Sponsored Display ad can remind them to come back. This often leads to “view-through” conversions (sales after simply seeing the ad). Retargeting warm leads like this can significantly boost sales by capturing customers who nearly converted.

4) Boost Overall Performance (and Organic Sales)

Sponsored Display drives incremental sales, which can lift your product’s organic rank over time. In fact, PPC specialists note that effective ads help make products “stand out” on page one. By capturing additional buyers through Display ads, you amplify your overall PPC impact and reinforce your brand presence.

In short, Sponsored Display ads help you capture demand at multiple stages. They broaden your reach, target audiences precisely, and recover potentially lost sales, all of which contribute to higher revenue and stronger brand presence.

Getting Started with Sponsored Display Campaigns

Starting your first Sponsored Display campaign is straightforward and requires no minimum spend. Follow these steps:

1) Sign in to Amazon Ads Console

Go to advertising.amazon.com and log in. Create a new campaign of type Sponsored Display.

2) Set Campaign Name and Duration

Give the campaign a clear name for tracking. We recommend running the campaign continuously (no fixed end date) to allow at least 1–2 weeks of data for optimization. You can pause it anytime.

3) Set Budget

Enter your daily budget. Small sellers might start with $20–$50/day, while larger brands may allocate more. There’s no minimum requirement. Remember, Amazon can slightly exceed the daily spend on big traffic days, averaging out over the month.

4) Choose Bidding Strategy

Select your bidding method, CPC (Cost-Per-Click) or vCPM (Cost per 1000 impressions). For most performance campaigns, use CPC. Amazon suggests a default bid (around $1.00 for CPC campaigns), but you can adjust it up or down. If using vCPM, you set a CPM bid (for example, $5.00 means $5 per 1000 viewable impressions).

5) Add Products to Advertise

Choose which of your SKUs to promote. We recommend including 10 or more related products in the campaign. Amazon has found that advertisers promoting 10+ products saw ~13% higher sales than those promoting fewer. Make sure these products are in stock and have strong listings (good reviews/images), since the ads will drive traffic to them.

6) Define Targeting

Create one or more ad groups with your targeting strategy (contextual or audience-based; see next section). For example, one ad group might use product/category targeting, and another could target specific audiences. Name your ad groups clearly (e.g., “View Remarketing – Home Goods”) for easy analysis later.

7) Launch the Campaign

Review all settings and start the campaign. Ads will begin delivering to your chosen targets. Monitor basic metrics (impressions, clicks, spend) in the console. Let it run for a couple of weeks so Amazon’s algorithms can optimize delivery based on performance.

After launching, resist the urge to make immediate changes. By about 2–3 weeks, you’ll have enough data to begin optimizing bids, budgets, and targets. In the meantime, ensure that the ads are running (no errors) and that spend aligns with expectations.

Getting Started with Sponsored Display Campaigns

Targeting Options: Contextual vs Audience

Choosing the right targeting is crucial. Amazon offers two main modes: Contextual/Product Targeting and Audience Targeting.

1) Contextual/Product Targeting

You target specific Amazon ASINs or categories. For example, you could target a competitor’s product page or a best-selling category. You can filter by price, brand, or Prime eligibility. Ads will then appear on the detail pages or search results of those products. This is great for “conquesting” customers who are browsing items similar to yours. Use it to place your ad right next to related product listings.

2) Audience Targeting

This uses Amazon’s audience segments based on shopping behavior. Key options include:

Views Remarketing: Shoppers who viewed your product (or similar products) in the last 7–30 days but didn’t buy.
Purchases Remarketing: Shoppers who bought your product (cross-sell), or who bought complementary products.
Amazon Audiences (In-Market/Lifestyle): Predefined segments like “in-market” for Home & Kitchen, or “lifestyle” segments (e.g., outdoor enthusiasts). These reach new shoppers who fit your target profile.Use multiple tactics together. For example, run one campaign retargeting recent viewers (warm leads) and another targeting contextual placements (broad reach). Testing both helps you see which audiences convert best.

Targeting Type	How It Works	When to Use
Product/Category (Contextual)	Target specific ASINs or categories. Ads appear on those product pages or search results.	Good for reaching shoppers browsing related products (including competitors). Capture those comparing options.
Views Remarketing	Reach customers who viewed your (or similar) products but didn’t buy.	Ideal for re-engaging warm leads. These shoppers already showed interest, making conversions more likely.
Purchases Remarketing	Reach customers who purchased your products (or related ones).	Good for repeat business or cross-selling.
Amazon Audiences (In-Market/Lifestyle)	Target pre-built segments based on behavior (e.g., “in-market” for category, or lifestyle interests).	Great for finding new customers matching your target profile. Useful for launches or broadening brand awareness.

Key Metrics and Calculations

Tracking the right performance metrics is essential. Here are the main KPIs and how to calculate them:

1) Advertising Cost of Sales (ACoS)

ACoS shows how much of your sales you spend on ads. Calculate ACoS = (Ad Spend ÷ Ad-attributed Sales) × 100%. For example, $50 spent on $200 sales yields ACoS = (50÷200)×100 = 25%. Lower ACoS means more efficient spending. Aim to keep ACoS below your product’s profit margin – if ACoS hits your margin, you’re breaking even.

2) Return on Ad Spend (ROAS)

The inverse of ACoS, ROAS, measures revenue per ad dollar. ROAS = (Ad Revenue ÷ Ad Spend). A ROAS of 4.0 means $4 in sales for every $1 spent. A common target is 4:1 (400%), but it depends on your margins. Track ROAS to ensure your campaigns remain profitable.

3) Total ACoS (TACoS)

This measures ad spend against total sales (organic + ad). TACoS = (Ad Spend ÷ Total Sales) × 100%. TACoS tells you if ads are fueling overall growth. If your ads boost organic sales, TACoS can decrease over time, which is a good sign of efficiency.

4) Click-Through Rate (CTR)

CTR = (Clicks ÷ Impressions) × 100%. This shows what percentage of ad views got clicks. A higher CTR means your ad is engaging. On Amazon, the average PPC CTR is around 0.5%. If your CTR is significantly lower, consider changing the creative or target.

5) Conversion Rate (CVR)

CVR = (Orders ÷ Clicks) × 100%. It indicates how many clicks turn into purchases. For Sponsored Display, remember to include both click-through conversions and “view-through” conversions (sales after an ad impression). A low CVR might mean the landing page or product detail isn’t convincing enough.

6) New-to-Brand (NTB) %

This Amazon metric shows the share of conversions from first-time customers. A higher NTB% means your campaign is bringing in new buyers. Use this to gauge your success in acquiring fresh customers.

7) Impressions & Reach

Impressions = total times your ads appeared; Reach = number of unique shoppers who saw your ads. These metrics tell you how widely your ads are being seen. Low impressions might suggest increasing the budget or bids.

8) View-Through Conversions

These are purchases from users who saw (but didn’t click) your ad within the attribution window. This is unique to display ads and captures branding impact. It’s a useful measure of awareness-driven sales. Below is a summary table of the key metrics:

Metric	Formula / Definition	Why It Matters
ACoS	(Ad Spend ÷ Ad Sales) × 100%	% of revenue spent on ads. Lower means more efficient. Aim below your profit margin.
ROAS	(Ad Sales ÷ Ad Spend)	Revenue per $1 ad spend. A ROAS of 4.0 means $4 revenue per $1 spent.
TACoS	(Ad Spend ÷ Total Sales) × 100%	Shows spend vs. total sales. Indicates overall efficiency and organic lift.
CTR	(Clicks ÷ Impressions) × 100%	% of views that click. Gauges ad relevance. (Amazon avg ~0.5%.)
Conversion Rate (CVR)	(Orders ÷ Clicks) × 100%	% of clicks that convert to orders. Reflects how well clicks lead to purchases.
New-to-Brand (%)	(New Customers ÷ Total Buyers) × 100%	% of conversions from new customers. Measures customer acquisition.
View-Through Conversions	Purchases by users who saw the ad (within the window) but didn’t click	Captures branding impact. Shows sales driven by ad impressions.

Regularly monitor these KPIs in the Ads Console. Initially focus on ACoS/ROAS: if ACoS is above target, reduce bids or refine targeting. Also, keep an eye on CTR and CVR – if either is low, test new creatives or targets. Gradually shift the budget towards the campaigns that show stable or improving performance. In other words, track the numbers, identify winners, and reallocate the budget accordingly.

Creative Assets and Ad Formats

Your ad creative is what customers actually see, so it must be high-quality and on-brand. Sponsored Display supports images and video. For static images: use clean, high-resolution product shots. Amazon accepts standard display sizes like 300×250 px (max 40 KB, JPG/PNG). Avoid too much text overlay (Amazon limits text in images). Lifestyle photos (product in use) can also be effective to catch attention.

Video ads (6–30 seconds) can greatly boost engagement. If you have product videos, upload them – they autoplay (muted) in Sponsored Display placements. Amazon recommends short videos (e.g, ≤15 seconds, 1080p). Ensure the message comes across without sound (use text captions or visuals) since videos auto-play silently. Videos should clearly show the product’s key benefit or usage.

In all creativity, be consistent with your brand. Use recognizable colors or logos when possible. If compliant, add small highlights in the visuals (e.g., “Top Seller” or “Free Shipping”). An eye-catching image or video thumbnail can improve CTR and conversion. Remember: creatives must capture interest quickly, as Display ads often compete for attention on busy pages.

Budgeting and Bidding Strategies

Allocating budget and setting bids carefully will improve campaign success. Some guidelines:

1) Daily Budgets

Since there’s no minimum, pick a budget you’re comfortable with (e.g. $20–$50/day for a new campaign). Campaigns can run indefinitely until paused. Amazon advises longer runtimes (at least 7–14 days) so the system can fully attribute sales. Start conservative, then scale up once you see positive returns. For example, increase the budget on a campaign that’s delivering a strong ROAS. Established sellers often dedicate ~10–20% of their total ad spend to Sponsored Display; top performers may go up to 20–30%.

2) Budget Allocation Across Campaigns

If you run multiple display campaigns (e.g., one for remarketing, one for contextual), divide your budget accordingly. If one strategy proves superior (say, remarketing yields 5:1 ROAS vs. 2:1 for prospecting), shift more spend there. Regularly reallocate between campaigns to fund winners.

3) Bidding (CPC vs. vCPM)

For direct sales, use CPC bidding. As mentioned, start around Amazon’s default (≈$1.00). If a target (e.g, a product or audience) is converting well, raise bids to win more impressions. For brand-awareness goals, use vCPM (viewable CPM). For example, bidding $5.00 CPM means you pay $5 for each 1000 viewable impressions. vCPM is useful if you want maximum exposure, say, when launching a new product or running a big sale. Many advertisers use a mix: CPC for performance campaigns and a modest vCPM campaign to boost reach.

4) Dayparting/Schedules

Sponsored Display runs 24/7 by default, but you can adjust if needed. If your customers shop mostly on weekends or evenings, concentrate the budget then. Otherwise, run 24/7 and monitor performance by hour. This ensures you don’t waste money during off-peak times.

5) Optimizing Bids

Keep an eye on cost metrics. If ACoS creeps up, consider lowering bids or pausing inefficient targets. Conversely, if certain placements or audiences outperform, increase bids there. You might need separate campaigns to fine-tune different targets. Over time, the goal is to bid aggressively only where ROI is strong.

In summary, start with moderate budgets and bids, let the campaign gather data, then use performance insights to fine-tune. Gradually increase budget on campaigns with healthy ROAS and pull back on ones that underperform. The flexible nature of Sponsored Display (adjustable budgets/bids) makes it easy to iterate and optimize for your goals.

Advanced Strategies and Best Practices

After you’ve mastered the basics, try these advanced tips:

1) A/B Test Your Creative

Run two ad variations (e.g., different images or headlines) to see which performs better. For instance, test a lifestyle image against a plain product shot. Whichever yields higher CTR or conversions should get more budget. Use Amazon’s reports to compare performance across variants.

2) Plan for Promotions

Align Display ads with promotions or seasons. Before a big sale, increase your budget or bids to maximize exposure. After the sale, continue retargeting engaged shoppers with Display ads to capture lingering interest. For example, use Display ads immediately after Prime Day to target customers who viewed your deals but didn’t buy.

3) Synergize with Other Ads

Coordinate Sponsored Display with your Sponsored Brands and Products campaigns. A common approach: run Sponsored Products for keyword-driven intent, then use Display to recapture anyone who clicked but didn’t convert. Similarly, run Sponsored Brands for awareness, and Display ads to follow up. Integrated strategies covering the full funnel usually outperform isolated campaigns.

4) Leverage Custom Audiences

If available (via Amazon Marketing Cloud or DSP), create custom audiences for niche targeting (e.g. people who viewed a certain brand page). Feeding these segments into Sponsored Display can uncover high-value shoppers that built-in options miss.

5) Monitor Placements

Check the placement report to see where your ads appear (Amazon vs. other sites). If you notice a particular website or app is driving conversions, you could increase spend there. Conversely, exclude placements with poor results if Amazon Ads allows it.

6) Stay Current

Amazon frequently updates features. Keep an eye on the Amazon Ads blog for new Sponsored Display tools (e.g. interactive ads, audience categories). Adapting quickly to new options can give you an edge.

Summing Up

Sponsored Display is a key piece of the Amazon advertising puzzle. This PPC Quick Start Guide Sponsored Display covered the essentials: what Sponsored Display ads are, why they work, and how to launch and optimize campaigns. We explained targeting options, campaign setup, budgeting, and the critical metrics (ACoS, ROAS, CTR, etc.) to watch. We also highlighted how these ads can increase inventory velocity and sales lift.

The takeaway: use Sponsored Display alongside your other ads to capture more demand. When set up and optimized properly, these ads retarget interested shoppers and expose your brand to new audiences, driving up conversions and even improving organic sales. Always track performance closely – aim for a profitable ACoS and keep pushing for a strong ROAS. Adjust bids and creative based on data, and don’t hesitate to test new ideas.

By applying these strategies, you’ll maximize the value of Sponsored Display in your Amazon ad mix. Follow this guide step-by-step, and you’ll be well-equipped to leverage Amazon’s advanced display advertising for growth. Good luck and happy selling!

By following the strategies in this PPC Quick Start Guide Sponsored Display, you’ll be well-equipped to leverage Amazon’s advanced display ads. Good luck and happy selling!

Frequently Asked Questions

What’s the difference between Sponsored Display and Sponsored Products ads?

Sponsored Products ads appear in Amazon search results and on product pages when shoppers search with keywords you bid on. They capture active searchers with purchase intent. Sponsored Display ads, in contrast, use shopper behavior (views, purchases, interests) to target audiences, and can appear on Amazon pages or off-Amazon sites. In short, Sponsored Products = keyword-based (best for immediate sales), while Sponsored Display = audience-based (best for awareness and retargeting).

Do I need Brand Registry to run Sponsored Display?

Yes, only brands enrolled in Amazon’s Brand Registry (or registered vendors) can use self-service Sponsored Display. This ensures that the ads are run by legitimate brand owners. If you’re not registered, you won’t see the option to create Sponsored Display campaigns.

Should I use CPC or vCPM bidding?

It depends on your goal. Use CPC (cost-per-click) when optimizing for conversions. This tells Amazon to bid for clicks, which tends to drive sales. Use vCPM (cost-per-thousand impressions) when your goal is exposure and brand awareness. For example, use vCPM if you want to saturate a category with impressions (such as for a new launch). Many advertisers use CPC for remarketing (performance) and vCPM for top-of-funnel awareness.

Can I run Sponsored Display if I don’t sell on Amazon?

Yes, through Amazon DSP (Demand-Side Platform) or certain partners, non-sellers (apps, local businesses, etc.) can target Amazon audiences with display ads. You can advertise your product/service off-Amazon to Amazon audiences. However, this requires setting up DSP campaigns and usually a higher budget. The self-service Sponsored Display option we discussed above is only for Amazon sellers (brand-registered or vendors).

How does Sponsored Display fit with my other Amazon ads?

They’re meant to complement each other. A typical strategy: use Sponsored Products for high-intent search traffic, Sponsored Brands for brand discovery in search, and Sponsored Display to retarget and expand reach. For example, a shopper might click your Sponsored Product ad but not buy; Sponsored Display can then follow up on that customer. Using all three ad types together often gives the best results.