How do sponsored product ads work?
Sponsored Products promote a single listing into ad slots that look almost identical to organic results. A shopper searching a keyword sees sponsored listings mixed into the grid, and the seller pays only when someone clicks. The auction is a second-price model, so the winner pays just above the next competitor's bid rather than their own maximum. Two targeting modes exist: automatic, where Amazon matches your product to queries and ASINs it thinks are relevant, and manual, where you choose keywords and products yourself with explicit match types.
Are sponsored products only an Amazon ad format?
No. Sponsored products are the retail media term for a paid product listing shown inside search results and sold on a cost-per-click auction. Amazon popularized the phrase, but the same cost-per-click, single-listing-in-the-grid format now runs under the same or a near-identical name on Walmart Connect, Instacart Ads, Target Roundel, Kroger Precision Marketing, and TikTok Shop Ads. The mechanics are consistent across all of them: an auction-priced click, one product per placement, blended into organic results. Amazon's version is still the largest by ad spend and the one most sellers and searches mean by default, which is why this page and the rest of iClick's amazon ads agency coverage treat it as the reference implementation. Everything below is Amazon-specific unless stated otherwise.
Automatic vs manual campaigns
Automatic campaigns are a discovery engine. You give Amazon the product, it finds queries, and you harvest the winners. The discipline is to mine the search-term report continuously, promote proven queries into manual campaigns where you control bids, and add the wasteful ones as negatives. Manual campaigns are where efficiency is won, because you can set different bids for a broad, phrase, or exact match of the same keyword. A healthy account runs both: automatic for discovery, manual for control, with a deliberate pipeline moving terms from one to the other.
Match types and negatives
Sponsored Products offers broad, phrase, and exact keyword match, plus product and category targeting. Broad reaches the widest set of queries and needs the tightest negative-keyword hygiene, while exact is the surgical instrument for proven converters. Negative keywords are not optional cleanup, they are core structure: without them, automatic and broad campaigns bleed spend on queries that will never convert, and they cannibalise the exact-match terms you have already proven. The search-term report is the source of truth for both promotions and negatives.
How iClick structures Sponsored Products
iClick, as an amazon ads agency, treats Sponsored Products as a two-stage funnel: automatic and broad campaigns discover demand, and exact-match manual campaigns capture the proven winners at controlled bids. The rule is that every query earns its way from discovery into a controlled campaign only after it shows conversions, and every wasteful query becomes a negative the week it appears. Bids are set from each product's target ACoS, which is read off its margin, so the structure keeps discovery cheap and scales only what has already proven it converts.
