Core formulas
CTR
Clicks ÷ Impressions × 100%
10,000 impressions and 100 clicks = 1% CTR.
CPC
Ad Spend ÷ Clicks
$100 spend and 100 clicks = $1 CPC.
CVR
Orders ÷ Clicks × 100%
10 orders from 100 clicks = 10% conversion rate.
ACoS
Ad Spend ÷ Ad Sales × 100%
$100 spend and $500 ad sales = 20% ACoS.
ROAS
Ad Sales ÷ Ad Spend
$500 ad sales ÷ $100 spend = 5.0 ROAS.
Break-even ACoS
Profit Margin %
If pre-ad margin is 30%, break-even ACoS is roughly 30%.
Campaign types
| Campaign | Best for | Main focus |
|---|---|---|
| Sponsored Products | Direct product sales | Keywords, product targeting, bids |
| Sponsored Brands | Brand visibility | Headline, Store, product collection |
| Sponsored Display | Retargeting and awareness | Audience and product targeting |
Optimization workflow
01
Collect Data
Run campaigns long enough to gather impressions, clicks, orders, CPC and sales data.
02
Find Winners
Identify search terms with orders, acceptable ACoS and good conversion.
03
Cut Waste
Lower bids or add negatives for expensive terms that generate clicks but no sales.
04
Scale
Increase budget and bids carefully on profitable keywords and product targets.
Simple decision rules
High clicks, no orders
Check keyword relevance, price, reviews, images and listing quality. Consider lowering bid or adding a negative keyword.
Good conversion, low impressions
Increase bid gradually, improve keyword coverage, and make sure campaign budget is not limiting delivery.
Good sales, high ACoS
Reduce CPC, improve conversion rate, increase selling price if appropriate, or improve product margin.
Remember: Amazon Ads is a funnel:
Impressions → Clicks → Orders → Sales → Profit.
Improving only one metric is not enough. A profitable campaign needs relevant traffic,
a strong listing, competitive pricing and controlled bids.