Amazon's Sponsored Products ads are one of the most powerful tools available to Handmade sellers — when used correctly. Here is the difference between automatic and manual campaigns, and the strategy that gets the best results from both.

Amazon PPC advertising — pay-per-click Sponsored Products ads — works differently from most other advertising platforms handmade sellers are familiar with. When you run an ad on Facebook or Instagram, you are targeting people based on demographics and interests and showing them your product while they are doing something else. When you run an Amazon Sponsored Products ad, you are showing up in front of someone who is actively searching for something to buy. That difference in buyer intent is why Amazon advertising tends to deliver stronger returns than most other platforms for product-based businesses.

But Amazon advertising also has a learning curve. Campaigns set up without understanding the difference between automatic and manual — or left running without regular monitoring — eat through budget without delivering proportionate results. Here is the full picture.

How Sponsored Products Ads Work

When you run a Sponsored Products campaign, your listings appear in Amazon search results and on product detail pages with a small "Sponsored" label. When a buyer clicks your sponsored listing, you pay a fee — your cost per click. If that click results in a sale, the ad paid off. If it does not, you paid for the click with no return.

Your goal is to set up campaigns that generate sales at a cost that leaves you with acceptable profit after the ad spend. The metric Amazon uses for this is ACoS — Advertising Cost of Sales. If your ACoS is 15%, it cost you 15 cents in advertising for every dollar of revenue the ad generated. Whether that is a good number depends on your margin. A seller with 50% profit margins can sustain a 15% ACoS comfortably. A seller with 20% margins cannot.

Automatic Campaigns: Where to Start

An automatic campaign is one where Amazon chooses which search queries trigger your ads, based on your listing content and Amazon's own signals about what buyers search for when looking at products like yours. You set a daily budget and a default bid per click, and Amazon handles keyword selection.

Automatic campaigns are where almost every Amazon seller should start, for several reasons. They require minimal setup. They expose your listings to a wide range of search queries, some of which you would never have thought to target. And most importantly, they generate data — specifically, a Search Term Report that shows you exactly which buyer search queries triggered your ads and which ones resulted in sales.

That data is one of the most valuable things Amazon makes available to sellers. You can only get it by running campaigns. A few weeks of an automatic campaign running at a modest daily budget gives you a real-world picture of how buyers are finding your products — information that informs both your listing's backend keywords and the foundation of your manual campaigns.

Manual Campaigns: The Next Level

A manual campaign is one where you choose the specific keywords or products you want to target, and set individual bids for each. This gives you far more control over where your ad spend goes — you can bid more aggressively on high-converting search terms and less on terms that generate clicks but not sales.

The three match types available in manual campaigns:

Exact match — Your ad appears only when a buyer searches the exact phrase you specified, nothing more, nothing less. Highest control, narrowest reach.

Phrase match — Your ad appears when a buyer's search includes your keyword phrase in the same order, potentially with additional words around it. Moderate control and reach.

Broad match — Your ad appears for searches that include your keywords in any order, with related variations. Widest reach, least control.

The reason manual campaigns can be more profitable than automatic: different search queries have very different conversion rates. A buyer searching for "personalized wood cutting board wedding gift engraved" is much closer to purchasing than a buyer searching "cutting board." A manual campaign lets you bid more for the high-intent, specific query and less — or nothing — for the broad generic one. Automatic campaigns treat both the same.

The Strategy That Works

Start with an automatic campaign. Set a reasonable daily budget — enough to get meaningful data without excessive spend. Run it for two to four weeks.

Pull your Search Term Report. Identify which search queries drove clicks. Of those, which ones resulted in actual sales? Those are your gold keywords — they are buyers who searched for something specific, found your ad, and purchased. Those keywords belong in a manual campaign with a competitive bid.

Also identify search queries that drove clicks but no sales — high-spend, low-return terms. Add these as negative keywords in your automatic campaign so you stop paying for clicks that are not converting.

Over time, your manual campaigns become increasingly targeted as you learn what actually converts, and your automatic campaigns become cleaner as you add negatives. Both campaigns improve together. This iterative approach — start broad, learn, focus — is how Amazon advertising becomes profitable rather than just expensive.

A Note on Getting Started

The biggest mistake sellers make with Amazon advertising is either not starting it at all, or starting it and never checking back. Campaigns left running without monitoring will spend your budget on whatever Amazon chooses, including plenty of queries that are not converting. Check your campaigns at least weekly. Look at your ACoS, adjust bids on over-spending keywords, add negatives from your search term report, and keep building your manual keyword list from what is actually working.

Amazon advertising is not set-it-and-forget-it. But managed consistently, it is one of the highest-return marketing channels available to a handmade seller on this platform.

Ready to Run Advertising That Actually Pays Off?

Inside The Growth Thread, the Amazon advertising content covers campaign setup, bid strategy, how to read your reports, and how to build campaigns that compound in performance over time. It is built around what actually works for handmade sellers, not generic Amazon advertising theory.

Enrollment is not always open, but you can get on the waitlist and be first to know when doors open:

Join the Waitlist at TheGrowthThread.com

Not ready for that yet? A good next read is the guide on how to brainstorm keyword ideas for Amazon Handmade — the SEO foundation that makes your advertising work better when you do run it.