As an eCommerce retailer in 2026, you can't afford to treat Amazon ads as a side project. Amazon is now the third-largest digital advertising platform in the world, with an ad business generating over $56 billion a year — and it's stitched together with a marketplace where roughly 56% of US product searches already start.
What that means in practice: the brands winning on Amazon right now aren't just bidding more. They're using a smarter mix of Amazon's evolving ad formats — and tying everything back to a measurement layer that didn't exist five years ago. Here's how to harness Amazon's latest ad updates for maximum conversions.
What launched as a Canadian beta in 2021 is now the most reliable creative format Amazon sells. Sponsored Brands video occupies premium real estate at the top, middle, and bottom of search results — and now also appears on product detail pages. Videos autoplay (muted) when at least 50% in view, give shoppers a direct click-through to your product page, and run on a pay-per-click model just like static Sponsored Brands.
The creative rules have tightened, though. Amazon's reviewers reject the majority of video ads for a small handful of repeat issues:
The full Sponsored Brands video guidelines are worth a read before you commission new creative.
Sponsored Display (the self-serve, on-Amazon display product) and Amazon DSP (the programmatic platform that lets you buy display, video, and audio across the web and on Amazon-owned properties like Prime Video, Twitch, and Freevee) used to be two separate worlds. In 2025 Amazon collapsed a lot of that distance.
Sponsored Display Audiences — once limited to a handful of countries — is now globally available. Views-based remarketing lets you re-engage shoppers who browsed your product or category in the last 30 days, both on and off Amazon. And the lift on conversion rate from layering on-Amazon Sponsored Display retargeting on top of Sponsored Products is one of the more reliable plays in the playbook.
For smaller brands, Sponsored Display is still the entry point. For brands ready to commit to higher budgets and richer audience targeting (and the streaming inventory that comes with it), DSP is now genuinely worth the conversation.
Amazon Marketing Cloud has graduated from beta to a fully matured measurement platform — and it has changed how serious Amazon advertisers spend.
AMC is a clean-room environment that holds your Amazon ad data (and shopper purchase signal) and lets you run SQL-based queries to answer questions the standard Amazon Ads console can't:
You don't have to be a SQL wizard to use it — Amazon now ships pre-built "instructional queries" and has expanded its Lookout templates. Pair AMC with a paid media partner who can write queries against your data and you have a measurement story that maps directly to revenue, not just ACoS.
One of Amazon's bigger 2024 launches was its generative AI ad creative suite, now expanded through 2025 and 2026. Sellers can drop a product image into the tool and generate lifestyle backgrounds, themed seasonal shots, and short-form video clips — directly inside Amazon Ads.
The output isn't always launch-ready, but it has collapsed the time and cost of creative testing. Brands that used to ship one or two static Sponsored Brands creatives a quarter are now testing eight to twelve variants a month. The performance gap between brands that test creative aggressively and brands that don't has widened.
Amazon has continued expanding the reports available to sellers. Highlights of what's now available globally that wasn't a few years ago:
Amazon's ad ecosystem rewards specialization. The agencies and in-house teams getting outsized results aren't running Amazon ads the same way they run Google or Meta — they're treating Amazon as its own discipline.
That's how we approach it. Major Tom's eCommerce strategy team integrates Amazon's full ad stack (Sponsored Products, Brands, Display, DSP, AMC) with the rest of your performance marketing, so Amazon spend isn't siloed from the broader business. For Wild Grapes, that combined approach helped drive a 98% increase in monthly Amazon sales alongside organic listing improvements.
Want help building an Amazon ad strategy that holds up against AMC scrutiny? Talk to our team.
The core Amazon ad formats are Sponsored Products (keyword and product-target ads appearing in search results and on product pages), Sponsored Brands and Sponsored Brands video (banner and video ads featuring multiple products and your brand logo), Sponsored Display (display ads on and off Amazon, with audience- and product-targeting), and Amazon DSP (full programmatic display, video, and audio inventory including Prime Video, Twitch, and Freevee). Most brands run a combination of the first three, with DSP layered in once budget allows.
Sponsored Display reports show campaign-level performance — impressions, clicks, conversions, ROAS, ACoS. AMC is a separate clean-room environment that holds your Amazon ad and purchase data and lets you run queries across all of it. With AMC you can answer questions standard reports can't, such as the incremental lift of one ad type on another, the lifetime value of customers acquired by a specific campaign, or how sequencing different ad formats changes conversion probability.
There's no universal number, but a useful starting frame: most brands allocate 5–15% of their Amazon revenue to ads, with newer brands skewing higher (closer to 20%) to build sales velocity and reviews. A more useful lens is ACoS target relative to gross margin. If your product margin is 40%, an ACoS of 25–30% leaves room for profit and FBA fees; an ACoS above your margin means you're losing money on the ad even if revenue is growing.
"Good" ACoS depends entirely on your product margin and lifetime value. A common heuristic: target an ACoS below your gross margin percentage to ensure each ad-driven sale is profitable. New product launches often run higher ACoS deliberately, to build sales velocity and reviews; once a product is established and ranks organically for its core terms, ACoS should come down. Total ACoS (TACoS), which measures ad spend against total sales not just ad-attributed sales, is often a healthier directional metric.
Sponsored Brands video consistently delivers higher click-through and conversion rates than static Sponsored Brands for most product categories, often by a meaningful margin. The trade-off is creative cost — a good video ad takes more work to produce. Amazon's generative AI tools have lowered that barrier, but the strongest performers still come from purpose-built video creative, ideally under 30 seconds, with the product visible in the first two seconds.
Probably not yet. Amazon DSP is most valuable for brands that have already maxed out Sponsored Products and Sponsored Display, have a meaningful budget (typically $25,000+ per month minimum), and want access to streaming, off-Amazon programmatic inventory, and richer audience targeting. Smaller sellers should focus on getting Sponsored Products, Sponsored Brands, and Sponsored Display right first — DSP becomes worth the conversation once the foundational ad types are humming.