What is the Cost of Amazon Advertising in 2025?

Amazon’s advertising revenue is expected to hit $94 billion in 2026 from $37.74 billion in 2022. This prediction highlights that the cost of Amazon advertising is only rising, and advertisers can anticipate increased competition across the platform. In 2025, Amazon advertising costs can range from $20–$300 per day, with an overall budget of $500–$20,000, depending on a lot of factors.

In this blog, we’ll cover the key factors that influence Amazon ad costs, like rising competition, evolving ad formats, and the role of automation.

With SalesDuo’s experience helping top brands achieve a 15% average cost of sale (ACoS), you’ll get actionable insights, drawn from real campaign data and proven strategies, to control costs while maximizing results.

 Cost of Amazon Advertising in 2025: A Quick Overview

Here’s a projected breakdown of average costs across Amazon’s primary ad types:

table

Understanding The Basics: How Do Keyword Bids Work?

Before we discuss Amazon ad costs, let's understand what you’re paying for. Amazon's advertising platform operates on a cost-per-click (CPC) model, where you only pay when someone clicks your ad. 

Amazon’s second-price auction system determines how much you pay for a click. Instead of paying your full bid amount, you’re charged slightly more than the next highest bidder. 

Your bids are further refined through three match types listed below, and understanding their differences is crucial:

• Broad match casts a wide net but may attract irrelevant traffic, and can quickly deplete budgets at scale
• Phrase match narrows the scope to queries containing your keyword, often providing the best balance of reach and relevance
• Exact match targets searches with pinpoint precision, typically delivering the highest conversion rates but with limited visibility

Here’s a table to help you understand the three match types with an example:

Additionally, dynamic bidding adjusts your bids in real time. For example, “down-only” reduces bids for low-conversion opportunities, while “up-and-down” maximizes sales potential by increasing bids where necessary.

To help you understand better, here’s an example of the same keyword.

Initial bid: $2.00 for "organic face wash"

On a Reddit thread, when asked the public’s opinion on their preferred dynamic bid model, most of the Amazon sellers vouched for the down-only model, stating there’s no downside to it. Many sellers prefer down-only bidding due to its cost-saving nature, and they don’t end up overspending in low-performing scenarios.

Learn more about Amazon’s dynamic bidding here.

Factors Affecting Amazon Ad Costs

Here are some of the major factors that drive your effective CPC:

Placement multipliers

Where your ad appears (placement) can heavily influence its performance. For instance, using placement multipliers to prioritize "Top of Search" spots can boost conversions, but it requires calculated bidding to control costs.

To prioritize high-performing placements, you can increase base bids by up to 900% for specific placements, such as Top of Search, Product Pages, or Rest of Search. This flexibility lets you strategically dominate competitive ad slots while closely monitoring costs. But at scale, this means a $2 bid could cost you up to $18 per click, and is a crucial consideration when you're managing thousands of SKUs.

In 2025, placement multipliers will play a pivotal role in shaping Amazon ad costs, especially as competition for visibility intensifies. 

Quality score variables

Beyond basic relevancy, Amazon's algorithm weighs your historical CTR, conversion rate, keyword relevance, and even inventory performance. Sellers often miss how stock-outs from six months ago can still impact current bid requirements.

Enhancing product pages with compelling images, optimized titles, and strong reviews also directly impacts this score.

In his thought-leadership blog, Adeboye Agboola, a certified Amazon PPC expert, says, ‘’Listings with professional images see 93% more clicks than those without.’’

High-quality images usually come at a higher cost, but they tend to attract more clicks. This increases your sales and reduces your overall CPC.

Category and keyword competition 

Your actual CPC varies significantly based on category maturity. In highly competitive categories, like beauty or electronics, the average CPC tends to be higher due to intense bidding.

Bidding wars for high-traffic keywords like “organic face cream” drive up costs. To avoid this, you can tailor bids to less saturated keywords or niches within your category, which can improve ROI. 

For example, instead of bidding on 'organic face cream,' try targeting niche variations like 'organic face cream for dry skin' to improve relevance and lower costs.

Amazon auction dynamics

Here's the catch: Your actual CPC often differs from your bid amount. You might bid $2, but end up paying $1.50 if that's what it takes to win the auction against other advertisers. You might also pay a CPC of $2.30 for the same $2 bid. Use Amazon’s suggested bid range to avoid overbidding.

The real complexity comes in managing these variables across extensive product catalogs. For instance, when running campaigns for 1000+ SKUs, even a 10% inefficiency in bid optimization can translate to tens of thousands in wasted ad spend. Regularly review bid performance at the SKU level to identify and eliminate inefficiencies.

Bidding strategies

Advertisers often go on an aggressive bidding spree, but implementing effective bidding strategies can reduce unnecessary expenses. Many advertisers make the mistake of using a "set it and forget it" approach. Successful advertisers, however, rely on dynamic bidding strategies to adjust bids based on the:

• Time of day (day-parting)
• Day of the week
• Conversion rates
• Profit margins
• Search result positions

For example, SalesDuo's approach with The Pencil Grip. Using their day-parting model, we analyzed their audience behavior to identify peak shopping times. 

We then strategically placed the ads to target high-conversion windows, ensuring maximum engagement and ROI. This precise timing led to 54.15% year-over-year growth for The Pencil Grip.

While top-of-search placements drive high conversions, shoppers increasingly spend time on Product Pages to compare and decide. Combine day-parting with placement multipliers to balance visibility and cost efficiency. You can also use dynamic bidding models like ‘’up-and-down’’ to adjust bids based on conversion potential. 

Type of ads

Different ad types come with distinct cost structures and performance characteristics:

• Sponsored Products generally have lower CPCs and are ideal for campaigns focused on high purchase intent. 
• Sponsored Brands, though more expensive, are designed for visibility at scale, making them ideal for brand awareness campaigns or showcasing a portfolio of products. 
• Sponsored Display ads often have the highest CPCs due to their broad reach and retargeting capabilities, both on and off Amazon.

We’ll explore different ad types, their predicted prices in 2025, and how you can choose the right ad type for your needs later in this article.

Seasonality and market competition

Costs spike during high-demand periods like Prime Day or the holiday season. At SalesDuo, we’ve seen CPCs increase by 30-50% across categories during Q4. Black Friday and Cyber Monday are particularly expensive, with some categories seeing 2X CPCs. The key is planning your budget accordingly and potentially increasing bids during these periods to maintain visibility.

Size of your business

Amazon advertising fees vary depending on the scale of the campaign. Having worked with 250+ brands of varied sizes, we’ve noticed that smaller businesses often struggle to compete with established brands. However, there's hope. Here's what we've observed:

For businesses with $500K-$1M revenue:

• Focus on long-tail keywords
• Start with Sponsored Products
• Target ACoS: 15-25%

Take Skoy Enterprises as an example. They partnered with SalesDuo to tackle high advertising costs and intense competition in the kitchen category. By strategically targeting competitor ASINs with Sponsored Products campaigns and adjusting bids dynamically, we helped Skoy grow sales by 23% while reducing their ACoS from 30% to 20%. 

Smart campaign structure and precise targeting can make all the difference, regardless of your business size.

For businesses with $1M-$20M+ revenue, focus on:

• A broader keyword strategy
• A mix of all ad types
• Target ACoS: 20-35%

For TNG Worldwide, SalesDuo implemented a comprehensive advertising strategy focused on prioritizing high-revenue items and using auto, manual, and display campaigns. 

This resulted in impressive growth: sales increased by 127% in 2021, 182% in 2022, and 184.5% in 2023.

Key tactics included:

• Addressing buyability issues
• Optimizing product availability through Vendor and Seller Central
• Employing FBA for high-demand items
• Allocating 85% of ad spend to auto and manual campaigns for Sponsored Products

We employed these tactics strategically for both offensive and defensive marketing campaigns, resulting in the total ad spend being a lean 1.13% of total sales. 

For larger brands, an integrated approach across multiple ad types and channels is essential for maximizing reach, driving sales, and maintaining a competitive edge.

Amazon Ad Types And Their Cost Structure

1. Sponsored Products

Sponsored Products are the most popular ad type on Amazon, appearing in search results and product detail pages. These ads target keywords, products, or categories to drive visibility and conversions.

Cost structure: Sponsored Products follow a cost-per-click (CPC) model, where advertisers pay only when shoppers click on their ads.

Key metrics:

• Average CPC: $0.80–$1.20
• Common ACoS: 15–25%
• Recommended minimum daily budget: $25–$50
• Recommended overall campaign budget: $500–$1,000

Best for:

• Small to mid-sized businesses focused on ROI
• Launching or boosting individual products
• Driving conversions for specific items

Hyper-personalized Sponsored Products ads from 2025

Amazon is integrating Amazon Marketing Cloud (AMC) audiences into Sponsored Products campaigns to enhance targeting precision. 

While this offers better customer segmentation, it also means advertisers will need to compete more for specific, high-value audiences. As algorithms improve, the ability to create personalized ads will drive up competition, potentially increasing CPCs. 

However, by aligning your bids with these personalized targeting options, you can still optimize costs while ensuring you're reaching the right customers at the right time.

2. Sponsored Brands

Sponsored Brands offer visually rich placements featuring your brand logo, a custom headline, and multiple products. Appearing at the top of search results, these ads are ideal for brand awareness.

Cost structure: Sponsored Brands operate on a CPC model, with higher costs due to premium placements.

Key metrics:

• Average CPC: $1.50–$3.00
• Common ACoS: 20–35%
• Recommended minimum daily budget: $50–$100
• Recommended overall campaign budget: $2,000–$5,000

Best for:

• Mid-sized to large businesses focused on brand-building
• Driving traffic to Brand Stores or curated product collections
• Showcasing multiple products in a single ad

3. Sponsored Display ads

Sponsored Display ads target audiences based on shopping behavior, enabling retargeting and competitor targeting. These ads appear on and off Amazon, expanding your reach.

Cost structure: Sponsored Display supports both CPC and CPM models, offering flexibility based on campaign goals.

Key metrics:

• Average CPC: $1.00–$2.50
• Average CPM: $5–$10
• Recommended minimum daily budget: $30–$50
• Recommended overall campaign budget: $1,000–$3,000

Best for:

• Retargeting shoppers who viewed your products but didn’t buy
• Attracting customers from competitor listings
• Expanding reach with audience and behavioral targeting

4. Sponsored TV (STV)

Sponsored TV ads deliver immersive video experiences on Amazon streaming platforms like Fire TV. These ads are perfect for storytelling and brand awareness.

Cost structure: Sponsored TV uses a CPM model, charging per 1,000 impressions.

Key metrics:

• Average CPM: $20–$30
• Recommended minimum daily budget: $100–$200
• Recommended overall campaign budget: $5,000–$10,000

Best for:

• Large brands seeking broad audience engagement
• Building brand awareness through premium video content
• Businesses with substantial advertising budgets

5. Amazon DSP (Demand-Side Platform)

Amazon DSP enables programmatic ad buying for display, video, and audio ads across Amazon’s network and third-party sites. It supports full-funnel marketing strategies with advanced audience targeting.

Cost structure: Amazon DSP operates on a CPM model, with costs influenced by targeting complexity and placements.

Key metrics:

• Average CPM: $8–$15
• Recommended minimum daily budget: $150–$300
• Recommended overall campaign budget: $10,000–$20,000

Best for:

• Large-scale brands with diverse product lines
• Retargeting and advanced audience segmentation
• Multi-channel strategies for full-funnel advertising

Practical Tips for Reducing Amazon Advertising Costs

1. Optimize keyword targeting

• Use automatic campaigns to discover relevant, high-intent keywords
• Regularly transfer top-performing keywords from automatic to manual campaigns for better control over bids
• Use negative keyword targeting to eliminate wasteful spending on irrelevant search terms
• Analyze search term reports weekly to identify and capitalize on emerging trends

How SalesDuo’s rainfall bidding strategy led to a 134% increase in sales for Z Natural Foods

SalesDuo helped Z Natural Foods use a rainfall bidding technique to run a Sponsored Products ad campaign: high bids for close matches and low for complementary products. With a total ad spend of $107K, they achieved 24 million impressions and a 134% increase in sales in just 5 months.

1. Apply automation and use AI tools
2. Use Amazon’s bidding automation (rule-based or dynamic bidding) to adjust bids dynamically based on conversion potential
3. Use Amazon advertisement agencies like SalesDuo that use a proprietary platform for real-time optimization of bids and keyword selection
4. Combine automated campaigns with manual adjustments to fine-tune strategy over time
5. Monitor the AI dashboards daily to identify opportunities for further automation

1. Dayparting
2. Analyze time-of-day performance reports to identify when your target audience is most active
3. Use dayparting strategies to allocate higher budgets during peak sales hours while reducing spend during low-activity periods
4. Combine dayparting with campaign automation tools to make bid adjustments seamless

How SalesDuo used bid modifications with placement reports

SalesDuo helped Brownie Brittle optimize ad performance by increasing bids for top-of-search placements, resulting in greater visibility and higher conversion rates. Regularly reviewing placement reports and adjusting bids accordingly is a smart strategy to boost ROI and ensure your ads are always positioned for success.

1. Focus on ad quality
2. Use compelling ad creatives with clear, benefit-focused messaging and high-resolution images
3. Ensure A+ Content is optimized for product pages, improving relevance and conversion rates
4. Target competitors strategically by highlighting your product’s advantages (better reviews, lower price, etc.)
5. Regularly audit ad copy and creatives for alignment with customer search intent and seasonal trends

How SalesDuo used high-performing ASINs to boost campaign outcomes for Eco-Shell

SalesDuo helped Eco-Shell achieve cost efficiency by prioritizing their top-performing ASINs. 

By directing ad spending toward these bestsellers, they maximized ROI while reducing wasted ad spend. Identifying and focusing on your high-performing products can significantly improve your campaign outcomes.

1. Adjust budgets seasonally
2. Monitor seasonal trends and reallocate budgets to high-performing ASINs during peak periods like Black Friday or Prime Day
3. For underperforming products, reduce budgets and reallocate funds to products with higher ROI potential
4. Consider seasonal promotional campaigns to drive traffic and conversions for products with seasonal demand spikes
5. Extend active hours to capitalize on increased traffic
6. Use Amazon’s Budget Rules to automate budget increases during holidays or high-traffic events

How SalesDuo capitalized on item-level budget transfer to adjust the budget seasonally  & maximize returns for Skoy

For Skoy, SalesDuo used item-level budget transfers to optimize ad spend. By shifting the budget away from slow-moving or temporarily ineligible ASINs and reallocating it to high-performing products, they maximized the efficiency of every dollar spent.

Learn more about reducing the costs of Amazon advertising here.

Real success stories from SalesDuo:

• Brownie Brittle: 566% impression increase in one week
• EcoShell: Reduced ACOS from 30% to 16%
• Skoy Enterprises: Decreased ACOS from 30% to 20% while increasing sales by 16%
• Z Natural Foods: Achieved 134% sales growth by maintaining ACOS under 30%

Optimize Your Amazon Ad Costs in 2025 with SalesDuo

As you consider refining your Amazon advertising strategy in 2025, it's essential to understand the various price factors at play and how they relate to your specific business needs. While you're setting maximum CPC bids, Amazon's dynamic auction system is making split-second decisions based on several critical factors that you may overlook.

By optimizing your approach and leveraging tools like SalesDuo's automated bid management services, you can navigate the complexities of Amazon Advertising while keeping costs manageable. 

At SalesDuo, we understand the challenges you’re facing in managing rising costs and optimizing campaigns. That’s why we go beyond the basics, offering automated bid management, real-time campaign monitoring, and keyword refinement to ensure every dollar you spend works harder for your business.

Schedule a call with a SalesDuo expert today to understand how we can optimize your Amazon ad campaigns in 2025.

About the Author

Meet Arjun Narayan, a Business Dynamo with two decades of conquering boardrooms and founding two companies that didn't just survive but thrived. When he's not navigating business strategies and delivery teams, you'll find him immersed in his love for cars and exploring new models, geeking out over tech trends, globe-trotting for new adventures, and occasionally pondering the mysteries of the universe over a good cup of coffee.