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Amazon advertising plays a major role in driving visibility and sales, but for many sellers, the terminology can feel confusing and overwhelming. Terms like ACOS, CPC, and ROAS are constantly mentioned in seller groups and tutorials, yet not everyone fully understands how they impact profitability. Without clarity, it’s easy to overspend or misinterpret performance metrics.
Whether you’re just starting Amazon PPC or already running Sponsored Ads, learning the language of Amazon advertising is the first step toward making smarter data-based decisions. Each term represents a key performance indicator that tells you where your money is going and how efficiently your ads are running. Knowing these terms helps you evaluate whether your ads are profitable or wasting budget.
This glossary is designed to simplify Amazon advertising terms in a seller-friendly way. Instead of complex definitions, you’ll get clear explanations that directly relate to real selling situations. By the end, you’ll be able to read your ad reports with more confidence, optimize your campaigns, and avoid common mistakes that cost sellers money every day.
Core Amazon Advertising Terms
1. PPC (Pay-Per-Click)
A paid advertising model where you only pay when someone clicks your ad. Common in Sponsored Products, Sponsored Brands, and Sponsored Display campaigns.
2. ACOS (Advertising Cost of Sales)
Measures ad spend compared to sales generated. Formula: Ad Spend ÷ Sales x 100. Lower ACOS generally means more profit.
3. ROAS (Return on Ad Spend)
The reverse of ACOS. Formula: Sales ÷ Ad Spend. Higher ROAS indicates better ad efficiency.
4. CPC (Cost Per Click)
How much you pay on average for each ad click. Lower CPC is ideal for maximizing profitability.
5. Impressions
The number of times your ad is shown to customers—even if they don’t click.
6. Click-Through Rate (CTR)
Percentage of people who clicked your ad after seeing it. Formula: Clicks ÷ Impressions x 100. Higher CTR means your ad is attractive and relevant.
7. Conversion Rate
The percentage of clicks that result in a sale. Formula: Orders ÷ Clicks x 100. Strong listings improve this metric.
Ad Types You Should Know
8. Sponsored Products
The most common Amazon ad type—promotes specific product listings and appears in search results and product pages.
9. Sponsored Brands
Ads that feature your brand logo and multiple products—ideal for building brand awareness.
10. Sponsored Display
Retargeting-style ads that appear on and off Amazon to bring back visitors who didn’t purchase.
11. DSP (Demand-Side Platform)
Advanced advertising system allowing Amazon sellers to run display ads across external websites and apps. Best for scaling big brands.
Campaign Structure Terms
12. Automatic Campaign
Amazon chooses keywords and placements for you. Good for keyword discovery.
13. Manual Campaign
You control targeting, bids, and keyword selection. Best for optimizing performance.
14. Ad Group
A set of ads under one campaign with shared targeting and bidding structure.
15. Negative Keywords
Keywords you exclude to prevent wasted spend on irrelevant clicks. Crucial for optimizing campaigns.
Bid Strategy Terms
16. Dynamic Bidding (Up & Down / Down Only)
Amazon automatically adjusts your bid in real time depending on the conversion probability.
17. Fixed Bidding
Your bid stays exactly as set, with no automatic adjustment by Amazon.
18. Placement Bid Adjustments
Allows you to increase bids for top-of-search, product pages, or other placements.
Performance Optimization Terms
19. Search Term Report
A detailed report showing actual customer search phrases that triggered your ads. Vital for adding winning keywords or negatives.
20. TACOS (Total Advertising Cost of Sales)
Measures total ad spend compared to total sales across your account (organic + PPC). Helps measure long-term scalability.
Why This Glossary Matters for Sellers
Understanding Amazon advertising terms helps you avoid blind spending and gives you control over your campaigns. Most new sellers lose money not because Amazon ads don’t work—but because they don’t fully understand the metrics that drive profitability. By mastering this glossary, you’ll be able to optimize smarter, scale faster, and confidently manage your ad strategy.
If managing ads feels like a full-time job, EHP Consulting Group helps sellers handle PPC, listing strategy, and performance tracking so you can focus on growing your brand instead of stressing over metrics.
🚀 Need Help Growing with Amazon Ads?
EHP Consulting Group offers Amazon PPC Management and Account Optimization services for sellers who want results without the trial-and-error.
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Written By: Ahzel P. Miral
Email: [email protected]
Website: http://www.ehpconsultinggroup.com
Number: 925-293-3313
Date Written: October 23, 2025