Introduction
Most Amazon sellers assume that their PPC underperforms because their bids are wrong.
After having audited hundreds of accounts, the real culprit is almost always structural and includes mismatched campaign types, shared budget across multiple ASINs, and auto campaigns that generate data that never graduates anywhere useful.
Increasing the budget for ads on a broken foundation will not fix the problem; instead, it will make the problem more expensive.
This is what a competent Amazon PPC agency does, and in this guide, you will see how it’s done.
Short Answer
Amazon PPC agencies optimize campaigns by rebuilding campaign architecture, harvesting search terms from auto campaigns, adjusting bids by keywords, product targets, and placements; managing negative keywords; reallocating budget across the different campaign types; and tracking TACoS instead of ACoS alone.
On a daily basis, this process also involves reviewing search term reports for new winners and wasteful ad spend, adjusting placement multipliers for Top of Search versus Rest of Search, graduating high-converting keywords from auto to manual campaigns, and reallocating budget to ASINs with the strongest conversion rates.
On a daily basis, this process also involves reviewing search term reports for new winners and wasteful ad spend, adjusting placement multipliers for Top of Search versus Rest of Search, graduating high-converting keywords from auto to manual campaigns, and reallocating budget to ASINs with the strongest conversion rates.
The best agencies combine this with listing CRO and SEO management to create the PPC-organic flywheel that reduces TACoS over time. Bid changes are crucial for a healthy account, and they need to happen daily as a core part of the optimization loop.
While the structural work sets the foundation, what drives the ongoing profitability is the daily bid management.
Step 1: Campaign Architecture Before Optimization Can Begin
Most accounts that underperform don’t have a bidding problem but have an architectural one.
There is no bidding optimization that can rescue an account that has broad match, phrase match, and exact match keywords competing against each other in the same ad group or where three ASINs share one campaign and no one can tell which product is actually profitable.
Agencies can spot this in the first audit and can provide the fix the account needs.
Why Most Self-Managed Accounts Have the Wrong Foundation
There are three structural failures that show up at every self-managed account.
First, broad match, phrase match, and exact match keywords all compete for a budget that is within the same ad group without any separation strategy. This prevents high-performing keywords from being identified and scaled independently.
Second, multiple products share the campaign budget, and this makes it impossible to determine which specific ASIN generated profitable returns and which one consumed without converting.
Third, auto campaigns run for months and generate valuable search term data that never graduates to manual campaigns, so the account keeps paying auto-match prices for keywords that should be being bid on directly. These are the fixes that any competent agency makes in the first two weeks.
The 1-1-1-1 Method: One Campaign, One Ad Group, One Keyword, One ASIN
While the 1-1-1-1 structure sounds restrictive, it’s the only path to scale an account in the most profitable way. This structure stands for one campaign, one ad group, one keyword, and one ASIN.
Every click and every conversion, along with the dollar of the spend, is traceable to exactly one variable. You know exactly which keyword drives a result for a specific product with zero ambiguity.
At Olifant Digital, we used the exact structure to add $114,305 in monthly revenue for MatchaBar and to deliver 171% revenue growth with 50% reduced ACoS for Balanced Tiger in two months.
Clear structure is not just preference, but it's what makes scaling decisions obvious.
Step 2: Keyword Management and Search Term Harvesting
Managing keywords is not a one-time process you do and forget. Instead, it's a weekly process for high-volume accounts, and for accounts that generate more, it runs daily.
Agencies pull reports that show what people actually searched for when they clicked your ads and find winners that should get their own campaigns and spot losers that need to be blocked.
Moving Winners from Auto to Manual Campaigns
Think of auto campaigns as your testing ground, and manual campaigns as your control center.
Auto campaigns run in the background and show your ads for different search terms and collect performance data. Then your agency spots which of these search terms are getting clicks and actually turns them into sales.
Once the agency identifies these winners, they move them into separate campaigns where you can set your own bids and budgets, instead of letting Amazon decide.
This process is also beneficial for your organic ranking. When Amazon sees people searching for a specific term, clicking your ad, and then buying, it recognizes that your product is relevant for that search and, over time, starts showing your product higher in organic search results for those terms.
If you skip this step and leave everything in auto campaigns, you will end up paying Amazon's automatic prices indefinitely for keywords that you could control by yourself at lower cost.
Negative Keyword Discipline: Stopping Spend Leaks
Negative keywords represent one of the most overlooked tools in self-managed accounts and are very powerful for stopping wasted ad spend.
When agencies look for budget drain, they search for three things. First, irrelevant search terms where shoppers look for something that you don't sell, as you are paying for clicks that don't have a chance of converting.
Second, your brand name is showing up in campaigns that are meant to attract new customers, not people that are already searching for you specifically.
Third, they search for competitor products that are triggering your ads in campaigns where it doesn't make sense to compete.
It's important to understand the two types of negative keywords, as they work differently.
Phrase match negatives block any search that contains that word or phase, regardless of what else appears in the search.
For example, if a brand adds "powder" as a phase match negative (because they sell ready-to-drink matcha and not the powdered product), their ads will not show up for "matcha powder," "organic matcha powder," or "best powder matcha," which means every search that includes the word "powder" will get blocked completely.
Exact match negatives only block that specific phase in the exact order. If, for example, MatchaBar adds "matcha tea," they will still show "matcha tea latte," "iced matcha tea," or "matcha green tea drink."
This is a very valuable distinction, because while you block "matcha tea" because searchers that use that term want loose-leaf tea to brew at home, they'd keep "matcha latte" and "matcha tea drink" active because those searchers are looking for ready-to-drink beverages, which is exactly what this brand sells.
At Olifant Digital, we audit the negative keywords every week as a standard practice, because without this discipline, accounts waste 15 to 30 percent of their advertising budget on searches that will never result in a sale.
Step 3: Bid Optimization - What Good Agencies Actually Adjust
There is a common myth that Amazon PPC agencies only raise bids.
While this is somewhat true, only 20% of the actual work includes this. The other 80% is fixing campaign structure, organizing keywords properly, moving budget to the right products, and tracking the actual profitability.
Bids are important, but raising them on a broken account will not fix the underlying problems.
When we partnered with Elite Jumps, at Olifant Digital we did main fixes, which included restructuring campaigns and testing better product images and copy, not just raising bids.
The end results were a 51% higher conversion rate and 124% revenue growth in three months.
Bid by Placement: Top of Search vs. Rest of Search vs. Product Pages
Amazon shows your ads in three different places, and each one performs very differently:
If you add one flat bid for all placements, you end up paying the same price whether your ad appears in the best spot (top of search, where people actually buy) or in product pages where people are just browsing.
Experienced agencies set a base bid and then adjust it based on where the ad shows. They typically increase bids by 50% for Top of Search because that is where the conversion rates are highest and it's worth paying more to compete.
At the same time, agencies also cut bids on Product pages that are not converting. Amazon doesn’t allow you to shut off a placement completely, so the goal is to reduce it as much as possible to stop the bleed.
Most of the sellers don't look at their placement reports and don't know that this is even possible. Yet, this represents one of the fastest ways to stop wasting money and improve results.
Why Daily Optimization Matters More Than Weekly
Checking your campaigns on a weekly basis may sound reasonable, but once you calculate the cost, you realize that it's not.
If one of your keywords is spending $40 a day, that's $280 wasted before you catch it next week. If you multiply that number across 20 different campaigns, you realize that you are losing thousands every month.
Daily checks catch problems that happened on the same day, and you can easily react when competitors change their prices. You can scale up when a product suddenly takes off.
At Olifant Digital, we do daily checks, and that's the reason why Spade to Fork grew revenue by 46% in just 44 days, while they cut ad costs by 19%.
Step 4: Budget Allocation Across Campaign Types
Budget allocation is a strategic decision, and not all of the agencies divide it equally across the available campaign types.
The most common framework that most agencies use is 60/30/10. 60% of the spend goes for Sponsored products, 30% is intended for Sponsored Brands and 10% for Sponsored Display.
This split adjusts based on your brand's stage, category, and the maturity of your account; however, it works as a starting point for most brands that are doing $500K to $5M in annual revenue.
Sponsored Products: The Core Revenue Driver
Sponsored Products is the foundation of your Amazon advertising strategy.
This campaign type shows your individual products to shoppers that are already searching for specific keywords. Those shoppers that are called high-intent are actively looking to buy right now and represent the most valuable traffic on Amazon.
The main reason why Sponsored Products get the biggest share of your budget is because they deliver the best return on your ad spend and because when you structure it correctly with the 1-1-1-1 method, you get crystal-clear data on what is working.
With the proper structure, it's easy to trace every dollar that you spend to the keyword, product, and the sale it generated. That clarity is what makes it possible to scale profitably, as you know exactly what to do more of and what to cut.
Sponsored Brands: Awareness and Branded Defense
Sponsored Brands are the header banner ad units that appear at the top of the search results pages. They feature a brand logo and multiple ASINs or directly link to a Brand Store landing page.
The primary strategic application is to dominate your own brand keyword search results and to prevent competitors from purchasing ad placements above the fold when consumers search for your brand name.
The secondary strategic application is cross-category discovery, which is when a shopper that is searching for a product in a category is exposed to complementary products from the same brand within a single ad unit.
For brands that are established and have a measurable search volume on their brand name, Sponsored Brands budget allocation is non-negotiable.
Sponsored Display: Retargeting Lost Traffic
Sponsored Display has a function of a retargeting tool, and it must be clearly understood. The core function of Sponsored Display is to retarget shoppers that have already shown interest in your product but didn’t buy.
When someone views your product detail page and leaves without making a purchase, Sponsored Display allows you to show them ads as they continue to browse Amazon.
This recaptures high-intent traffic, as these are all shoppers who already considered buying from you and just need another touchpoint to convert.
Sponsored Display also enables competitor ASIN targeting, which places your ad directly on a competitor’s product detail page. When a shopper is viewing a competitor’s similar product, your ad appears on that page, and allows you to intercept shoppers who are evaluating the options.
For example, if you are selling organic protein powder, you can target your competitor’s top-selling organic protein powder ASIN and show your product to those shoppers that are on your competitor’s page and are deciding whether to buy it.
The 10% budget that goes for Sponsored Display's role reflects that role of a supplemental conversion tool, and it works best when it supports your main Sponsored Products campaigns by recapturing leaked traffic and intercepting competitive shoppers.
Step 5: Reporting That Reveals What's Actually Happening
The metric that an agency reports on reveals whether they are managing for their dashboard or for your profitability. Agencies that report ROAS and ACoS are managing numbers that can look great even when the account is quietly deteriorating.
The right reporting should answer one question: Is the advertising subsidizing the account, or is the account earning organic momentum from advertising?
Why ACoS Alone Is a Misleading Metric
ACoS (Advertising Cost of Sale) measures the advertising spend as a percentage of ad-attributed revenue.
The organic revenue is completely excluded from the calculation. A brand can report a 25% ACoS and appear to be performing well, but if TACoS (Total Advertising Cost of Sale) is 40%, the data states that advertising is subsidizing the majority of the revenue, and organic growth has stalled completely.
ACoS can be improved by reducing the advertising spend, which decreases sales velocity and subsequently degrades organic ranking position. While it is a useful campaign-level diagnostic, it can be a dangerous account-level scorecard when reported alone.
TACoS as the True Profitability Benchmark
TACoS (Total Advertising Cost of Sales) is calculated as total advertising spend divided by total revenue. The total revenue includes both ad-attributed sales and organic sales. When TACoS is declining over time, it means that the organic ranking position is improving and the advertising dependency is decreasing.
This is the definitive indicator of a healthy and sustainable account. Our TACoS-first management approach for Onsen Secret tripled their profits. We built Ekster’s annual profitability of $688,406 on margin-first management, which we measured through TACoS analysis, not ACoS tracking.
If an agency can’t articulate their TACoS trajectory over a 90-day period, this means it’s reporting on an incomplete and potentially misleading metric set.
Step 6: The PPC–SEO Flywheel
This is one of the most misunderstood dynamics in Amazon advertising. The reason for this is because PPC and SEO can’t be run separately. Instead, the flywheel works in the following sequence:
PPC (pay-per-click) is driving the traffic to a well-optimized listing. From there, the traffic converts, and it generates sales velocity. Sales velocity sends a signal to A9 and A10 that the ASIN deserves organic rank, and that’s when organic rank drives the sessions that don’t cost ad spend.
As a result of this, TACoS decreases, and it creates a budget headroom that can be invested in new ASINs or new categories.
Agencies that run PPC and SEO separately break this cycle. When there is PPC spend driving traffic to a weak listing, this results in wasted traffic. On the other hand, listing optimization without PPC support is slow ranking that may never catch up. The compounding benefit only works when both are managed in tandem.
At Olifant Digital, we coordinated Elite Jump’s PPC and SEO work. This coordination resulted in a 51% CVR lift and 124% revenue growth in three months, because the listing was optimized before the ad spend scaled, and PPC was used to build ranking velocity, not just generate revenue.
How Olifant Digital Optimizes Amazon PPC Campaigns
Our optimization process runs in a fixed sequence, and every account goes through the same steps, in the same order, because the order matters.
Account audit first
Before we run a single campaign, we’ll audit the existing account architecture, listing quality and keyword structure. We don’t scale any budget on a weak foundation, because if a listing converts at 8%, doubling spend will waste twice as much.
1-1-1-1 campaign build
We use the 1-1-1-1 method to structure every account, which means one campaign, one ad group, one keyword, and one ASIN. Performance is never ambiguous, and all the scaling decisions are based on complete visibility.
Daily optimization loop
Bids, placements, budgets, and search terms are reviewed daily, not weekly. Brands usually do optimization on a weekly basis, and that 7-day lag costs brands money every week it continues.
Weekly search term harvest
High-converting terms from auto campaigns graduate to manual exact-match campaigns. Wasteful terms are negated, and the keyword pool improves every week.
TACoS as the primary KPI
Besides ACoS and ROAS, we do TACoS reports for every account. A declining TACoS over 90 days means that the organic growth is real and that the flywheel is working.
Proprietary PPC tooling
At Olifant Digital, our internal tool manages the bids and budgets at an hourly level, not just daily, and with this feature, we have more precise control that the standard Seller Central allows.
We use the same campaign structure to our own seven-figure brand as we do to our client accounts. Every method that we recommend has already been validated with our own ad budget first.
Proven Results from Olifant Digital’s Optimization Approach
Balanced Tiger — 171% Revenue Growth, 50% ACoS Reduction in 2 Months
The primary fix for Balanced Tiger that we did included a new keyword strategy and campaign structure.
The previous agency they used had been chasing ultra-competitive keywords, which quickly drained their budget without a meaningful increase in revenue or profit.
The first thing we fixed for Balanced Tiger was keyword strategy and campaign structure.
MatchaBar — $114,305 Added Monthly Revenue
The complete restructuring with the 1-1-1-1 method for MatchaBar we did delivered complete performance visibility across all ASINs. The weekly A/B testing on their images and copy lifted conversion rates across the catalog simultaneously.
The daily PPC management allowed real-time reactions to the emerging trends, and our strategic product bundling managed to double the average order value.
Spade to Fork — 46% Revenue Growth in 44 Days, ACoS Down 19%
Spade to Fork’s previous setup only had a handful of campaigns per product, and that made competing and diagnosing problems almost impossible.
We launched dedicated campaigns for each of their products and added competitor targeting. This turned into one of the best-performing strategies at a (lower ad cost, and we built single-keyword campaigns for high-intent search terms.
Our daily optimization kept the overall ad-to-revenue ratio profitable across every product in the catalog.
Elite Jumps — 124% Revenue Growth in 3 Months
When Elite Jumps partnered with us, we not only fixed their bids but also the overall structure and listing quality.
After we rebuilt the campaign architecture, we also did A/B testing on the hero images, titles, and bullets, and the result of this was an improved CVR by 51%.
At the same time, we did PPC and SEO optimization, which helped generate an organic rank lift alongside paid revenue.
What to Ask Any Amazon PPC Agency Before Hiring Them
There are seven important questions you need to ask an agency when you have an evaluation call. These are important for determining whether the agency does legit work, or you will end up disappointed in the end.
- Do you optimize daily or weekly?
- Do you use the 1-1-1-1 campaign structure, or do you mix and match types and ASINs in shared campaigns?
- Do you report on TACoS, or do you only report on ACoS and ROAS?
- Do you harvest and graduate keywords from auto campaigns on a weekly cadence?
- Do you audit and add negative keywords on a recurring basis? Can you also show me any examples of previous work?
- Do you manage listing optimization alongside PPC, or do you treat them as separate workstreams?
- Do you offer a money-back guarantee, and what does cancellation look like?
At Olifant Digital, we offer a free marketing plan for brands that generate $500K in annual revenue. The audit covers campaign structure, keyword architecture, bid strategy, and TACoS reporting.
Frequently Asked Questions
How do Amazon PPC agencies optimize campaigns?
Amazon PPC agencies optimize the campaigns by doing daily bid adjustments, harvesting search terms from auto campaigns, managing negative keywords, refining campaign structure, and tracking TACoS as the primary profitability metric. Optimization is a constant process and not just a one-time setup.
The best agencies use PPC work with listing optimization to build the PPC-SEO flywheel that reduces the advertising dependency over time.
How often should Amazon PPC campaigns be optimized?
Amazon PPC campaigns should be optimized on a daily basis, especially on accounts that spend $10K or more per month. At a minimum, optimization should happen weekly, but this can result in burning money before the next review. At Olifant Digital, optimizations are done on a daily basis as a standard.
What is the 1-1-1-1 campaign structure?
The 1-1-1-1 structure means one campaign, one ad group, one keyword, and one ASIN. This keyword provides complete performance visibility with zero ambiguity about which keyword drives a result for a specific product.
This is the basic foundation of scalable PPC management because every data point is clean. At Olifant Digital, we used this structure to add $114,305 in monthly revenue for MatchaBar and to deliver 171% revenue growth with 50% ACoS reduction for Balanced Tiger in two months.
What is TACoS, and why does it matter for Amazon PPC?
TACoS stands for Total Advertising Cost of Sale, which is calculated as total ad spend divided by total revenue (paid plus organic). A declining TACoS means the organic rank is improving and that ad dependency is decreasing.
ACoS can look healthy while TACoS is high, which means the ads are subsidizing most of the revenue without doing any organic lift underneath. TACoS is the primary metric for account health.
What's the difference between Sponsored Products, Sponsored Brands, and Sponsored Display?
The difference between the three is the following:
Sponsored Products show your individual products when people search for the exact keywords. These are what drive most of your revenue and should get the most of your budget.
Sponsored Brands are the banner ads at the top of search results that have your logo and multiple products. The whole purpose of these is to protect your brand name in search and to build awareness.
Sponsored Display brings back those shoppers that already looked at your product but left without buying. This is a retargeting tool that captures people that have already shown interest in your products.
How long does it take to see results from Amazon PPC optimization?
Real performance trends become clear around 30 to 45 days once you have enough data, but the biggest gains come after the third month.
This is when your PPC-SEO flywheel really kicks in, and your paid ads help you rank organically.
What metrics should an Amazon PPC agency report on?
TACoS is the primary account health metric, and it should anchor every report. ACoS is useful as a campaign-level diagnostic but dangerous as a sole account scorecard.
Agencies should track keyword rank position over time, organic session growth, conversion rate change changes and impression share on target keywords. Agencies that are reporting on ROAS alone are measuring the revenue efficiency, not the profitability.
