Amazon Sponsored Display Ads Mistake That's Draining Your Budget

Published on December 25, 2025

About this video

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In this Amazon PPC tutorial, I explain how to properly set up sponsored display ads to prevent wasting your ad spend without getting any sales. I cover the three optimization strategies available when creating sponsored display campaigns: reach, page visits, and conversions. I explain why you should avoid the reach option since it uses VCPM cost model with inaccurate attribution. Instead, focus on page visits and conversions which both use CPC cost per click payment method. The most important part is understanding Amazon's cost control feature. Without setting cost control limits, Amazon can automatically increase your bids up to 300% when their algorithm thinks your ad is likely to convert. This means if you set bids at $3, Amazon could increase them to $9, which can quickly drain your budget. For conversions optimization, set a cost per order that makes sense for your business stage. If you're just starting out, you might sustain higher costs, but if you want profitability, set realistic targets. For page visits, set cost control around 50 cents or higher depending on your goals. Start higher and scale down based on performance data. Always read Amazon's documentation about optimization strategies to understand how these functions work.

Contents: 00:00 Introduction to sponsored display ads optimization 00:27 Three optimization strategies explained 00:47 Why to avoid reach optimization with VCPM 00:54 Page visits vs conversions CPC methods 01:08 Cost control importance and 300% bid increases 01:30 Setting cost per order for conversions 02:20 Cost control for page visits optimization 02:44 Amazon documentation on bid increases

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Transcript

Hi guys and welcome to another Amazon PPC video. In this video, I will cover sponsored display ads and what are some of your measures that you can do today to prevent accidental piling up of ad spend without any sales. So, whenever you create your sponsor display ad during the campaign building process, you have the option to select different optimization strategies. Now, I've covered each one of these in my previous videos. So, you can select reach, page visits, and conversions. The only difference between two between the three I would say uh the first one is going to have VCBM cost model which I don't recommend because you know the different attribution model which is not accurate at all. So skip this almost at all cost. You can select between page visits and conversions because they are both both uh CPC oriented. So cost perclick method for paying um Amazon. But I want to focus on this success metric here or how they call it cost control. without this cost control for either settings. So e either for page visits where you can define cost per click or conversions where you can define cost per order. If you skip this, Amazon will increase your bids up to 300% if the algorithm determines that your ad is most likely to convert up to 300%. So that can be pretty huge. If you set your bids at $3, it can be up to $9. That can be a challenge. So, I fully recommend that when you select, for example, conversions that at least set some cost per order that you know that you can sustain, you know, and if it makes sense for your current uh stage of your product. So, maybe you're just starting out so you can withstand bigger cost per order or maybe if you want to optimize, you know, and aim for profitability. put here something that you want really want to accomplish because without that it's just a gamble. Similar is with a page visits some cost control here. Put it like um 50 cents or something higher depending on what you again what you want to accomplish. You need to play with the numbers because if you set it too low nothing's going to happen. If it's if then you know I suggest that you start a little bit higher and then scale down. To learn more about how this functions, I encourage you to to click on the how to choose an optimization strategy and read through documentation. And here's where Amazon stated, "Yeah, so we may increase your bid for that auction up to 300%." That's that's pretty significant. Um, okay. Let me know if you have any further questions around this. I've seen really funky results with this option disabled, so no, it was a surprise to say the to say the least. Um, thank you for watching. And see you tomorrow in the next video.

Frequently asked questions

What are the three optimization strategies for Amazon Sponsored Display campaigns and which should you avoid?

The three options are Reach (optimized for viewable impressions), Page Visits, and Conversions. Reach uses a vCPM cost model, meaning you pay per thousand viewable impressions rather than per click, and its attribution is based on a mix of clicks and estimated views rather than actual click-through data, which makes it unreliable for measuring true performance. Page Visits and Conversions both use a CPC payment model, giving you cleaner attribution and more predictable cost control, so those are the two strategies worth using for most sellers.

What happens if you skip the cost control setting in a Sponsored Display campaign?

Without a cost control limit set, Amazon's algorithm can automatically increase your bids by up to 300% whenever it determines that an ad placement is likely to lead to a conversion. This means a bid you set at $3 can become $9 per click without any action on your part, which can drain your daily budget extremely fast and produce unexpected spikes in ACoS. Setting a cost per order target for Conversions campaigns or a cost per click cap for Page Visits campaigns prevents Amazon from making these uncapped bid increases.

How should you set the cost control value when launching a new Sponsored Display campaign?

Start with a higher cost control limit than you ultimately want to sustain, then scale it down as you gather performance data. Setting the limit too low at launch will result in very few or no impressions because your bids will be too restricted to win auctions. For Page Visits optimization, starting at around $0.50 CPC or higher is a reasonable starting point depending on your category, while for Conversions optimization, set a cost per order that reflects your current business priorities, whether that is building early sales velocity at a higher allowable cost or maintaining profitability at a tighter target.