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The ABCs of Amazon PPC: A Glossary of Terms

Amazon Pay Per Click (PPC)  has exploded in popularity and significance for Amazon sellers over the past few years. As the Amazon marketplace continues to expand it is imperative to understand the importance of implementing and implementing Amazon PPC strategies into your company have never been more important.

While Amazon introduced its platform for advertising in 2012, the platform has seen growth over the past few years. In a relatively short few years, Amazon can be seen just behind Google and Facebook for market share.

With the increasing number of shoppers to the internet, Amazon sellers can transform their business by advertising and making their ads more visible than they ever have.

Since it’s relatively new is a subject that many sellers aren’t keen on including in their marketing mix. And we understand! With so many things to learn, how do you start?

Sometimes, the process of studying about Amazon PPC may seem like studying advanced math or learning the language of a foreign country. In a sense it’s a mixture of both, using the formulas, equations, and rules that define the success of your business and the terminology that is a part of a world distinct from its own.

It is equally important to look into  Amazon PPC cost and figure out how to determine the ideal amount to run your PPC advertising on Amazon and ensure that your margins of profit remain unaltered.

Although this might sound intimidating, it’s actually simpler to comprehend than you believe. If you’re new to PPC and are required to learn the language, or you just need to refer to an unfamiliar word or two, don’t hesitate to consult our glossary and explanations of the most commonly used PPC terms!

Advertising placement

Advertising placement is the place where ads are shown. On Amazon advertisements are typically displayed on both desktop and mobile devices. The ads are in the upper right-hand corner of results, along with search results and pages that display products.


The maximum amount can be spent on an advertising campaign. If you decide to set a daily budget of $25, that means you won’t spend more than $25 on the specified day.


The amount an advertiser is willing to pay per click. On Amazon sellers have the option of choosing between bidding that is manual or automated.


The most popular PPC method for ensuring that people will find your advertisements. Through manual or automatic targeting, sellers are able to target certain keywords that consumers use in their searches to locate items.

Search Term

Sometimes, keywords are misunderstood as keywords From the PPC viewpoint Search terms in Amazon report (and PPC tools like SellerApp) indicate where your ads will appear.

In short, Keywords are what you’re aiming for, while the Search Terms are the locations where the ads are displayed.

Demand-side Platform (DSP)

The Amazon program that allows advertisers to purchase programmatically displayed or audio advertisements on or off Amazon.

Advertising Cost of Sales (ACoS)

A measure used to evaluate the efficiency, performance and the profitability of Sponsored Product ad campaigns. It is calculated by dividing Total Ad Cost in total sales.

For instance, if an advertisement’s ACOS was set at 30 percent, the advertiser made 30 cents on every dollar spent.

Target ACoS (TACoS)

It’s not a great Mexican sweet, however. Target ACoS, or TACoS is the term used to define advertising spending in relation to the total revenue generated and includes organic revenue. While ACoS is based on only spending and revenue figures which are directly connected with advertising TACoS also includes revenue from organic sources to provide a wider approach to your advertising initiatives.

Return on Ad Spend (RoAS)

A well-known benchmark in advertising in the digital age, RoAS is the inverse of ACoS. Instead of measuring the price of a purchase, RoAS is the sum of dollars made per dollar of advertising.


A step that a client does; this could describe any number of actions, like clicks on “Add to Cart,” buying a product, etc. It is generally used to determine the number of times your advertisement concluded with the desired result.

Conversion rates

The frequency at which your campaign’s advertising reaches the desired outcome.

Cost-per-click (CPC)

Particularly, the amount you pay every time someone clicks your advertisement. To calculate your CPC, split the amount you pay on an advertisement by the amount of clicks it earns. Sponsored Products as well as Sponsored Brands have CPC ads.

In the overall scheme, CPC can be a positive relationship for Amazon as well as the vendor since sellers pay only for ads that get an actual click.

Click-through Rate (CTR)

The percentage of impressions that are clicked when compared to the whole quantity of clicks. The most common formula for CTR can be described as (clicks/impressions) 100.

Measurements for brand new-to-customer

Metric that is used to define the number of customers who purchased your product or brand at first on Amazon in the last year. These metrics calculate the cost of engaging with new buyers on Amazon and determine the most effective strategies and channels to reach the goals of their campaigns. They are often used to compare returning customers by brands to gain a better understanding of their customer acquisition strategies vs. the ways they retain customers.

Automatic Campaigns

A type of campaign or targeting that allows Amazon to determine the time and place your ads are displayed. Automated campaigns are useful due to their simplicity of use as well as the information they collect through Amazon; however, they take the control of the seller’s control.

Since automated targeting campaigns are designed in a programmatic manner, they could result in ads being displayed for unrelated keywords or odd products, which could result in less effective campaigns.

Manual Campaigns

As a complement to automated campaigns, manually-run campaigns give greater control in the advertising company’s hands, which allows greater strategy for campaigns. Sellers can choose other products that are similar to theirs or even keywords for their products to show up for.

PPC Spend

The amount is devoted to advertising campaigns on Amazon.

Target ACoS

TACoS Amazon refers to your profit margin prior to advertising divided by your profit margin target after advertising. The number of units will differ from seller to seller and is dependent on the various expenses involved in making your product accessible.

Read More : How to Sell on Amazon for Beginners in 2022 

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