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AI automation changed everything. CPCs hit $1.18–$1.25. Alexa for Shopping mediates 20% of mobile queries. Manual bid management is dead. Here is the framework that works right now — from launch to scale.
Amazon's advertising platform has made a structural shift that most sellers have not fully absorbed yet. Three things changed simultaneously in 2025–2026 that rewrote the PPC playbook.
First, Amazon's AI matured. Dynamic bidding, auto campaigns, and rule-based optimisation are now genuinely effective. The sellers holding ACoS steady in 2026 are not doing it with manual bid tweaks. They are doing it with better campaign architecture, better listing quality, and better negative keyword discipline — while letting Amazon's AI handle real-time bid adjustments.
Second, CPCs kept climbing. Average CPCs reached $1.12 in 2025 and are projected at $1.18–$1.25 in 2026, with Q4 spikes of 20–30%. Sellers who cannot improve conversion rate and listing quality will see margins compressed even without changing their bids.
Third, Alexa for Shopping changed the match dynamics. Amazon renamed and expanded Rufus into Alexa for Shopping in May 2026, and it now mediates 15–20% of all mobile queries using natural language processing rather than literal keyword matching. Exact-only campaign structures miss the conversational search terms that Alexa surfaces.
Exact-match-only campaign structures have stopped working as a growth engine. Wide targeting combined with disciplined filtering now outperforms heavy manual control. If your entire PPC strategy is built on a tight exact match keyword list, you are leaving a significant portion of your convertible traffic untouched.
Amazon offers four primary ad formats in 2026. Most sellers only run Sponsored Products and miss significant reach by ignoring the other three.
Sponsored Brands Video is no longer optional for competitive categories. Advertisers using coordinated Sponsored Brands and Display during Prime Day 2026 saw 139% higher sales vs category growth averages. A 30–45 second product demonstration video is all you need to get started.
Most sellers obsess over ACoS and ignore TACoS. In 2026, this causes bad decisions — cutting bids to lower ACoS, which stalls organic rank and makes the business worse. Here is how to think about each metric correctly.
ACoS tells you campaign efficiency. It does not tell you anything about your organic sales — which is why it can be misleading as a standalone metric.
TACoS tells you business health. If your TACoS is falling while total revenue grows, your ads are building compounding organic rank. If TACoS is rising while revenue is flat, your ads are replacing organic demand, not creating new demand. This is the most important signal in your account.
The trap sellers fall into: cutting bids to lower ACoS. This reduces ad-driven sales velocity, stalls organic ranking, reduces organic sales, and makes TACoS worse even as ACoS improves. The right lever is listing quality and conversion rate — not bid reduction.
Alexa for Shopping does not use literal keyword matching. It interprets intent. A shopper asking "what's a good water bottle that keeps drinks cold for hiking in summer" is not searching for "insulated water bottle" — but that is still your product. Your keyword strategy must capture both.
Tier 1 — Hero keywords (exact match): Your 5–10 highest-converting, highest-volume terms. These go into dedicated exact match campaigns with tightly controlled bids. These are your revenue engine.
Tier 2 — Discovery keywords (phrase and broad match): Wider match types that discover new search terms, including the conversational queries Alexa for Shopping generates. Auto campaigns also belong here. Mine these weekly for converting terms to promote to Tier 1.
Tier 3 — Competitor and ASIN targeting: Target competitor product pages and brand terms via Sponsored Products with product targeting, or Sponsored Display for retargeting competitor viewers.
Run automatic and broad match campaigns to discover which search terms actually convert. Once a term generates 3+ conversions, promote it to an exact match campaign with a bid set to your target ACoS. This is the single most reliable process for growing a profitable keyword portfolio in 2026.
The most effective Amazon PPC accounts in 2026 are built around purpose-driven campaign layers — not a flat list of keywords in one or two campaigns. Each layer has a distinct job, bid strategy, and optimisation cadence.
Purpose: find new search terms including conversational queries from Alexa for Shopping. Use automatic targeting and broad match campaigns with a conservative daily budget ($10–$20). Set bids at 70–80% of your Tier 1 exact match bids. Review search term reports weekly — any term with 3+ conversions gets promoted to Layer 2 or 3.
Bid strategy: Dynamic bids — down only. Amazon reduces bids when conversion is less likely. Correct strategy for discovery campaigns to control waste while maximising reach.
Purpose: capture searchers who use your keyword as part of a longer query. Phrase match finds "best insulated water bottle for hiking" when you target "water bottle". Set bids at 85–95% of your exact match bids.
Bid strategy: Dynamic bids — up and down. The 2026 standard — allows Amazon's AI to optimise conversions in real time. Review weekly; move high-converting phrases to exact match in Layer 3.
Purpose: capture your highest-intent, proven-converting keywords with maximum bid control. Set bids at full target ACoS. This layer is your revenue engine — protect it with aggressive negative keyword management to keep only the cleanest traffic.
Bid strategy: Fixed bids for your most critical branded and hero keywords. Dynamic up and down for category and competitor keywords where you want AI optimisation.
Purpose: capture shoppers viewing competitor listings (Sponsored Display product targeting) and retarget shoppers who viewed your listing but did not buy. Set Sponsored Display budget at $30–$50/day minimum. Only run competitor conquesting if your product has a clear, verifiable advantage — Alexa for Shopping reads your reviews.
SellerSprite's Ads Insights tool reveals competitor PPC keyword strategies — what they bid on, estimated spend, and which terms drive their sponsored placements. Stop guessing. Start spending smarter.
SSAM35
The launch phase is the most critical and most commonly misunderstood phase of Amazon PPC. The goal of launch PPC is not profitability. It is rank and data. You are paying for keyword ranking momentum and search term data that tells you which queries your product converts on. A launch-phase ACoS of 30–50% is not a failure — it is an investment.
Days 1–7 (Discovery): Launch one auto campaign and one broad match campaign. Daily budget: $20–$40 each. Bid strategy: dynamic down only for auto, dynamic up and down for broad. Do not touch bids or cut keywords for 7 full days — let the algorithm learn.
Days 8–14 (Harvest): Pull your search term report. Add all terms with at least 1 conversion to a phrase match campaign. Add all terms with zero clicks after $3 spend to your negative keyword list. Begin your first exact match campaign with your top 3–5 seed keywords.
Days 15–30 (Optimise): Review search term reports every 3 days. Continue promoting converting terms from broad/auto to phrase, then to exact. Kill any exact match keyword with ACoS above 2× your target after 10+ clicks with no conversion.
Every ad-driven sale contributes to your keyword ranking velocity. As your organic rank improves, you start getting organic sales at zero additional ad cost. This pushes your TACoS down over time even as your ACoS stays the same — the signal that your launch is working.
Once your product has 15–25 reviews, a conversion rate above 10%, and is ranking in the top 20–30 positions for your primary keywords, shift from launch mode to scale mode.
Reduce broad match and auto budget by 30–50%. Reallocate budget to exact match campaigns where you have proven conversion data. Auto and broad are still useful for discovery but should not be your volume drivers.
Start dayparting. Shoppers convert highest between 9am–12pm and 7pm–11pm. Amazon's bid automation adjusts in real time, but reviewing your hourly data to validate this for your category is worthwhile.
Add Sponsored Brands with video. Once you have brand registry and a proven converting product, Sponsored Brands Video generates significantly higher CTR. In competitive categories in 2026, this format is effectively mandatory.
Track contribution margin, not just ACoS. A product with 18% ACoS on a $20 product might be losing money. A product with 35% ACoS on a $60 product might be highly profitable. Know your real profit per unit after all costs.
Amazon's native AI has made significant progress in 2026. Basic bid automation is now a free native feature. The platforms that still deliver value are those offering what native AI cannot: cross-channel management, creative testing, and strategic oversight.
Amazon's AI optimises for conversions within the parameters you set. Your job is to build a campaign architecture that gives the AI the right inputs: retail-ready listings, correct campaign structure, strong negative keyword lists, and meaningful budget thresholds. AI is most effective when it targets the correct audience — it will only convert if the listings are optimised.
Negative keywords are the single most underused profitability tool in Amazon PPC. Most sellers add negatives reactively. The best sellers build negative keyword lists proactively before launch and review them every week without exception.
Category 1 — Immediate negatives (add before launch): Terms you know will never convert. If you sell a premium stainless steel water bottle, add "plastic", "cheap", "free", "kids" as phrase match negatives before your first campaign goes live.
Category 2 — Data-driven negatives (add weekly): Terms from your search term report with 10+ clicks and zero conversions. These are costing money with no return. Review every Monday and add immediately.
Category 3 — Competitor brand negatives (add strategically): In broad match and auto campaigns you will often appear for competitor brand searches. Unless you are running a deliberate conquesting strategy, add competitor brand names as negatives.
Pull your search term report every Monday. Any term with 15+ clicks and zero conversions gets added as a negative immediately. This single weekly action can reduce wasted spend by 15–30% within 60 days.
Competitor targeting is one of the highest-ROI tactics available to sellers with a genuinely superior product. In 2026, Alexa for Shopping adds a new dimension: when a shopper asks "compare [competitor brand] vs alternatives", your product can appear in the AI-generated answer if your listing is optimised for that comparison.
Only conquest when you have a clear, verifiable advantage. Alexa for Shopping reads your reviews, pricing, and listing quality, and synthesises them into a comparison. If your rating is lower or your price is higher, do not waste money targeting their audience.
Target competitors who are out of stock or have deteriorating reviews. These are your highest-value conquesting targets — their customers are actively considering alternatives. SellerSprite's Product Tracker alerts you when this happens in real time.
Use Sponsored Products with product targeting (target their ASINs directly). Set bids at 70–80% of your keyword campaign bids. Monitor ACoS weekly; if competitor campaign ACoS exceeds 2× your target after 30 days, pause and reassess.
Use this checklist to audit an existing campaign or set up a new product's PPC correctly from day one. Click each item to mark it complete.
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