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Paid Media 10 min read

Understanding Amazon Ads: Common Myths vs. Straight Facts

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Written by Sarah Edwards

Content Writer @ Galactic Fed

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Expert reviewed by Rachel Meyer

Paid Media Account Director @ Galactic Fed

Published 11 Jan 2024

According to Statista, Amazon advertising generated over $38 billion in revenue in 2022, and thanks to the success of Amazon Ads, the e-commerce titan now holds 7.3% of the global online ad market. The meteoric growth of Amazon advertising puts it on every business owner’s radar, but the trend has also led to the emergence of numerous myths and misunderstandings. 

Sorting fact from fiction is often easier said than done, especially when it involves such a massive business entity. To help, we’ve outlined some of the most common Amazon Ads myths — and the facts that debunk them — below. 

What Is Amazon Ads? 

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Before diving straight into the myriad of myths surrounding the subject, we must first discuss what Amazon Ads is. As the company’s built-in advertising platform, Amazon Ads allows sellers and businesses to promote their products directly within the Amazon ecosystem. The platform supports multiple types of Amazon ads, from video content to images. 

In addition to supporting several Amazon advertising formats, the platform also includes analytics tools that allow businesses to track traffic and maximize the impact of their campaigns. By using multiple types of Amazon advertising content, you can reach more customers through targeted promotions and break into new markets.

How Does Amazon Advertising Work? 

Operating on a pay-per-click (PPC) model, each time a potential customer clicks on an Amazon ad, advertisers pay a fee. The model gives you plenty of control over your campaigns, as you can set your budget and bid for ad placements. 

Amazon considers the bid amount and the ad’s relevance, as well as several other factors, to determine which ads are displayed. It is a system designed to ensure that the most relevant ads reach the right audiences, increasing the odds of a conversion. 

Common Amazon Ad Types

As for the question of “what are Amazon ads” — as a concept and not the platform itself — the most common Amazon ad types include the following: 

  • Sponsored Products: Promote individual product listings and appear in search results and on product pages 
  • Sponsored Brands: Appear at the top of results pages and boost brand awareness 
  • Sponsored Display: Appear both on and off Amazon; target customers based on interests and behaviors
  • Amazon Stores: A free feature that lets you design your custom multi-page store on Amazon
  • Video Ads: Can appear within Amazon’s apps and website

There is no shortage of ways to weave Amazon ads into your marketing strategy. You can nurture prospects and drive business along various touchpoints, from videos to targeted product ads. 

Busting 12 Amazon Ads Myths 

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1. Amazon Ads Are Only for Large Retailers

One of the biggest myths that often gets brought up is the notion that Amazon ads are only for big brands. While it is true that big players rely heavily on Amazon ads, so too do small and medium-sized businesses. In fact, small businesses that advertise on Amazon see around 26% of their sales driven by these on-platform advertisements.

Amazon’s platform offers scalable solutions that fit various budgets and goals, and you’ll enjoy total control over your budget. You can set custom bids, place weekly caps on ad spend, and tailor every aspect of the campaign in a way that makes sense for your business. 

2. You Need an Ample Budget to Succeed

The topic of budgets brings us to our next common myth: Many business owners believe you need thousands in advertising money just to succeed on Amazon Ads, but that’s simply not true.

Start small, test different approaches, and see what works for your products. For instance, if you are trying out a new type of Amazon advertisement, consider allocating a budget of $100. Run the ad for a few days and see what happens. You’ll understand what your audience wants in an ad and can apply these insights to future campaigns. 

3. Amazon Ads Are Too Complicated

If you’ve never explored the Amazon Ads platform before, the entire thing can feel overwhelming, seeing how it is unmistakably loaded with tools and features. 

Like with any platform, there is a learning curve to surmount with Amazon Ads, but none of its parts are inherently complicated. Amazon offers extensive resources and guides to help you set up and manage your campaigns, and if you want to skip the learning curve altogether, you can even outsource Amazon advertising to a digital marketing team. 

4. Only Product Listings Matter

Having a well-optimized product listing is crucial, but ads matter all the same. They can help increase the visibility of your products, especially if you operate in a crowded niche. Furthermore, with effective ads, you can target specific customer searches and preferences, bringing your products front and center. With that said, combining strong product listings with strategic ad campaigns is a recipe for success on Amazon. 

5. Amazon Ads Don’t Affect Organic Rankings 

Amazon ads don’t directly influence your organic rankings, making this particular myth partially true. That said, ads drive traffic to your product listings, and if that traffic converts into sales, it can improve your product’s sales history. Since Amazon considers sales history when ranking your brand, generating more sales could potentially boost your organic ranking. 

6. Setting Up an Ad Campaign Once Is Enough

The “set it and forget it” approach doesn’t work well with Amazon Ads, as the platform is dynamic. Consumer trends change, competitors may outbid you, and Amazon’s algorithms evolve. Therefore, you must regularly monitor and tweak your ad campaigns. 

Analyze performance data, adjust your bids, refine your target keywords, and experiment with different ad types to find what works best for your products.

7. The Highest Bid Always Wins

While bidding is a component of Amazon’s ad system, the algorithm comprises other factors, some of which include relevance, ad quality, and product listing quality. Therefore, even if you have a lower bid, you can still win ad placements if your products are highly relevant to the customer’s search and your listings are optimized. Focus on the overall quality of your ads and listings, and avoid the bidding wars. 

8. Amazon Ads Only Work for Certain Product Categories

It is true that some categories are more competitive than others, but that doesn’t mean Amazon ads are only effective within those specific categories. You can find success across a wide range of products; it all boils down to knowing your audience and what they are searching for. When you know the intent behind searches and what sort of content resonates with your audience, you can tailor your campaigns accordingly. 

9. Amazon Ads Guarantee Immediate Sales

While Amazon ads can certainly provide an immediate boost to traffic and make sales more likely, they are not magic. They won’t provide immediate sales or overnight success, no matter how much money you throw into the mix. 

You need a well-thought-out strategy, competitive product offerings, and great descriptions, but even then, sales growth is often gradual, and it requires continuous optimization of your ad campaigns and product listings. 

10. Negative Reviews Will Always Hurt Your Ad Performance

Negative reviews are by no means desirable, of course, but they don’t immediately spell doom for your ad campaigns. 

In fact, a mix of positive and negative reviews can sometimes add authenticity to your product. The key, though, is how you respond to them. Addressing concerns and showing that you value customer feedback can turn a negative situation into a positive one. Moreover, focusing on improving your products and services based on feedback can improve future ad performance. 

11. You Can’t Target Specific Audiences With Amazon Ads

Amazon offers a slew of targeting options, including search terms, interests, and buying behaviors, among many others. That variety allows you to reach specific segments of Amazon’s vast customer base, making your ads more effective. 

You can use these targeting tools to make sure your ads are seen by the right people at the right time, but make sure not to make your audiences too narrow, as doing so can reduce the efficacy of your ads. 

12. Success With Amazon Ads Is Purely Based on Luck

There’s no denying that advertising involves some elements of unpredictability, but the entire practice is not based on pure guesswork and luck. Your success with Amazon Ads hinges on the quality of your game plan content. A sound strategy and great content will set you on the path to Amazon advertising success. 

Fuel Your Brand Growth With Amazon Ads

Now that you know the truth about Amazon advertising, you are ready to integrate the channel into your brand-building strategy.  Amazon Ads can be a powerful tool for growing your business, but it’s important to approach the marketing platform with realistic expectations and a clear understanding of the opportunities it provides. 

The bottom line is that Amazon Ads deserves a place in your marketing mix — don’t let these and other myths convince you otherwise.

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Sarah Edwards photo

Sarah Edwards

Content Writer @ Galactic Fed