PPC (Pay Per Click / Amazon Ads)

Why it matters

Amazon PPC is a second-price auction: you are charged just above the next-highest bid, not your full bid. That single mechanic explains most of what feels counter-intuitive about it, including why raising a bid often does not raise your cost proportionally.

In practice

The strategic point people miss is that Amazon ads are not only a traffic channel. Sales velocity is a ranking input, so paid sales raise organic rank, which produces organic sales, which reduces the paid share needed to hold position. Ads are how you buy your way into the organic flywheel, which is exactly why TACOS, not ACOS, is the metric that tells you whether it worked.

Related terms