How to Achieve 7× ROAS on Amazon: A PPC Strategy for New Brands

Amazon PPC (Pay-Per-Click) advertising is one of the highest-leverage tools available to brands on Amazon. The average ROAS across all Amazon advertisers is around 3×. ImportIQ averages 7× ROAS across our brand partner portfolio. Here is the strategy that gets us there.

Understanding Amazon PPC Fundamentals

Amazon PPC works on an auction model: you bid on keywords, and when your bid wins the auction for a given search query, your ad is shown. You pay only when a shopper clicks. There are three main ad types:

• Sponsored Products — individual product ads that appear in search results and on product pages. The highest volume and most important ad type for most brands.
• Sponsored Brands — banner ads at the top of search results featuring your brand logo and multiple products. Requires Brand Registry.
• Sponsored Display — display ads that can appear on Amazon and off-Amazon (on third-party websites). Good for retargeting.

Phase 1: The Launch Strategy (Days 1–30)

Start with Auto Campaigns

When launching a new product, start with automatic targeting campaigns. These let Amazon's algorithm discover which search terms your product matches, generating data you'll use to build your manual campaigns.

Set a moderate daily budget and a competitive bid. Your goal at this stage is data collection, not profitability. Run the auto campaign for 2–4 weeks and analyse the Search Term Report to identify:

• Which search terms are generating clicks and sales
• Which terms are generating clicks but no sales (negative keywords)
• Which terms have high click-through rates (strong relevance signals)

Build Your Manual Campaigns from Data

Once you have 2–4 weeks of auto campaign data, extract your winning search terms and build exact match and phrase match manual campaigns around them. Manual campaigns give you precise control over bids for specific keywords, allowing you to allocate budget efficiently.

Phase 2: Optimisation (Days 30–90)

Bid Management

Once campaigns are running, the primary lever is bid management. The goal is to find the optimal bid for each keyword — high enough to win the auction at a profitable position, low enough to maintain acceptable ACoS (Advertising Cost of Sale).

We use a simple rule: if a keyword's ACoS is below your target ACoS, raise the bid by 10–15%. If it's above target ACoS but still converting, lower the bid by 10%. If a keyword has 15+ clicks with no conversions, add it as a negative keyword.

Dayparting

Amazon allows you to schedule your bids by hour and day of the week. For most consumer categories, conversion rates are highest on weekday evenings and weekend mornings. Increasing bids during high-conversion periods and reducing them overnight can significantly improve overall ROAS.

To find your best dayparts, download the Search Term Report and analyse when your conversions occur. Build your dayparting schedule around that data, not assumptions.

Negative Keywords Are Non-Negotiable

Every click that doesn't convert costs money. Systematic negative keyword management — adding irrelevant or non-converting search terms as negatives across your campaigns — is one of the highest-impact, lowest-effort optimisations available. Review your Search Term Reports weekly and be ruthless about adding negatives.

Phase 3: Scaling (Day 90+)

Sponsored Brands for Top-of-Funnel

Once your Sponsored Products campaigns are profitable and well-optimised, add Sponsored Brands campaigns. These capture shoppers at the very top of the search results page — before they see any product listings — and are particularly effective for building brand awareness and defending your brand terms against competitors.

Competitor Targeting

One of the most powerful advanced tactics: target your competitors' ASINs with Sponsored Products ads. When a shopper views a competitor's listing, your ad appears on their product page. This is particularly effective when your product has better reviews, a more competitive price, or a compelling differentiator.

DSP for Retargeting

Amazon's Demand-Side Platform (DSP) allows retargeting — showing ads to shoppers who have viewed your product but not purchased. DSP ads appear both on Amazon and across thousands of third-party websites. This is an advanced tactic that typically requires a minimum monthly spend commitment and is most effective for brands with established organic velocity.

Understanding ACoS vs ROAS

These are the same metric expressed differently:

• ACoS = Ad Spend ÷ Ad Revenue × 100. Lower is better. A 14% ACoS = 7× ROAS.
• ROAS = Ad Revenue ÷ Ad Spend. Higher is better. A 7× ROAS = 14% ACoS.

Your target ACoS should be set based on your product margins. If you have a 40% gross margin, you can afford to spend up to 40% of revenue on ads and still break even — your target ACoS should be below that level to remain profitable.

The Most Common PPC Mistakes

• Setting campaigns and forgetting them — PPC requires weekly attention minimum. Bids, budgets, and negative keywords need regular updating.
• Running only broad match keywords — broad match generates clicks from irrelevant searches, wasting budget. Exact and phrase match should form the core of your campaigns.
• No negative keyword list — without negatives, your ad budget is constantly wasted on irrelevant clicks.
• Bidding the same on all keywords — some keywords convert at 3× the rate of others. Your bids should reflect conversion rate differences.
• Underfunding the launch phase — being too conservative with launch budgets slows organic ranking growth and extends the time to profitability.