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LESSON · 0816
Amazon Ads Fundamentals

Amazon
Advertising

Amazon Advertising helps sellers increase product visibility and sales by paying to display ads in Amazon search results and product pages. The most common type is Sponsored Products, which normally uses a PPC (Pay-Per-Click) model: you pay when a shopper clicks your advertisement.

Today's goal: understand the five essential Amazon Ads metrics and how they connect from impressions all the way to profit.
Five essential metrics
01 · CTR

Click-Through Rate

Measures how attractive and relevant your ad is.

CTR = Clicks ÷ Impressions × 100%
10,000 impressions and 100 clicks:
100 ÷ 10,000 × 100% = 1% CTR
02 · CPC

Cost Per Click

Shows the average amount paid for each click.

CPC = Ad Spend ÷ Clicks
$100 spend ÷ 100 clicks
= $1 CPC
03 · CVR

Conversion Rate

Measures how many advertising clicks become orders.

CVR = Orders ÷ Clicks × 100%
10 orders ÷ 100 clicks × 100%
= 10% CVR
04 · ACoS

Advertising Cost of Sales

A key Amazon advertising efficiency metric.

ACoS = Ad Spend ÷ Ad Sales × 100%
$100 advertising spend generates $500 advertising sales:
100 ÷ 500 × 100% = 20% ACoS

Lower ACoS generally means greater advertising efficiency, but the right target depends on product margin and business objective.
05 · ROAS

Return on Ad Spend

Shows how many dollars in attributed sales are generated for each advertising dollar spent.

ROAS = Ad Sales ÷ Ad Spend
$500 ÷ $100
= 5.0 ROAS

Every $1 of advertising spend generated $5 in attributed sales.
Core Amazon Ads funnel
Impressions
→
Clicks
→
Orders
→
Sales
→
Profit
Key idea: Good Amazon advertising is not simply about getting more clicks. Sellers should optimize keywords, bids, product listings, conversion rates and profitability together.