Amazon PPC Agency: How to Identify a Good One

What Does an Amazon PPC Agency Do?

An Amazon PPC agency manages your paid advertising campaigns on Amazon. Sponsored Products, Sponsored Brands, Sponsored Display, and depending on setup, Amazon DSP. That sounds like a clearly defined task, but the gap between "we run your ads" and "we manage your advertising strategically" is enormous.

PPC is the area where most Amazon agencies claim their core competency. The problem: because nearly every agency offers PPC, the market is crowded. Between freelancers working with default rules and specialized teams building campaign strategies based on granular data analysis, there is a world of difference. For you as a seller, that means you need to know what professional PPC management actually includes to find the right amazon ppc advertising agency.

This post shows you how to identify a good Amazon PPC agency, what it should cost, which red flags to watch for, and when managing PPC in-house is the better choice.

Good vs. Bad PPC Agencies: How to Tell the Difference

The differences between a good and a bad PPC agency are not immediately obvious to outsiders. Both deliver reports, both claim results. But beneath the surface, there are fundamental differences.

Campaign structure: A good agency builds a clean, scalable campaign structure segmented by product groups, match types, and funnel stages. A bad agency throws everything into a handful of campaigns and hopes the algorithm figures it out. The difference shows at the latest when you want to scale: a clean structure can be adjusted precisely, campaign chaos cannot.

Search term analysis: PPC generates data. Lots of data. A good agency analyzes search term reports regularly, identifies profitable and unprofitable search terms, builds negative keyword lists, and moves converting terms into exact campaigns. A bad agency reviews search reports monthly at best and only reacts to obvious outliers.

Bid management: Good agencies control bids at the keyword level, account for time of day, day of week, and seasonality, and deliberately use different bidding strategies. Bad agencies set a daily budget cap and let Amazon handle the rest. That works at small budgets, but above $10,000 in monthly ad spend, you are leaving significant potential on the table.

Strategic thinking: A good agency understands PPC as part of an overall strategy. They know that ad campaigns do not just generate sales but also influence organic rankings, build brand awareness, and can push competitors off the page. A bad agency optimizes purely for ACoS and misses the strategic value of advertising.

Campaign Structure, Bid Management, Search Term Analysis

These three areas are the core of professional PPC management. If an agency is weak here, nothing else can compensate.

Campaign structure in detail: Professional agencies work with a multi-layered structure. Typically, there are research campaigns (auto and broad match) that identify new converting search terms, and performance campaigns (exact match) where confirmed winners run with optimized bids. Add Sponsored Brands for brand visibility and Sponsored Display for retargeting. Every campaign has a clear purpose, a defined budget, and measurable goals.

With a portfolio of 50 or more products, this quickly results in hundreds of campaigns. That is intentional. Granularity enables control. An agency that packs 200 products into 10 campaigns cannot optimize at the product or keyword level. When evaluating agencies, ask specifically about campaign structure. If the answer stays vague, that is a warning sign.

Bid management in detail: Bids on Amazon are dynamic. What is profitable today can be too expensive tomorrow because a competitor raised their bids or because the conversion rate shifted. Good agencies use a combination of rule-based adjustments and manual interventions. Purely automated bid management sounds efficient but ignores context factors like launches, seasonality, or inventory issues.

Search term analysis in detail: Search term reports are the most valuable data source in Amazon PPC. They show not only which terms convert but also which terms burn budget. A good agency continuously builds a negative keyword list that prevents your budget from being spent on irrelevant searches. At the same time, it identifies new opportunity keywords that can feed into the SEO strategy. This cycle between PPC data and SEO optimization is one of the strongest levers in Amazon marketing.

ACoS and TACoS: How an Agency Should Measure Success

When an agency tells you "we lowered your ACoS to 15 percent," it sounds great. But it is only half the story. A low ACoS can mean the agency simply cut the budget and only bids on brand keywords. Revenue drops, but ACoS looks nice. That is not success. That is optimizing for the wrong metric.

Professional agencies measure success by TACoS (Total Advertising Cost of Sale). TACoS puts ad spend in relation to total revenue, organic plus paid. A declining TACoS with growing total revenue means: advertising is driving organic growth and the paid share is becoming relatively smaller. That is real performance.

Beyond that, a good agency should track additional metrics: impression share (how much visibility are you capturing compared to what is possible), new-to-brand metrics (how many first-time customers are you acquiring through ads), and the development of organic rankings for advertised keywords. If your agency only reports ACoS and revenue, the strategic perspective is missing.

Ask during every reporting call: what is happening to the organic ranking of the products we advertise most heavily? If the agency cannot or will not answer that question, it is a sign that PPC and SEO are not being connected.

Amazon PPC Agency Pricing: What to Expect

Pricing models for PPC agencies are relatively standardized, but the ranges are wide.

Percentage of ad spend: The most common model. Typical rates are 10 to 20 percent of monthly ad budget. At $20,000 in ad spend, you pay $2,000 to $4,000 in agency fees. The advantage: costs scale with your budget. The downside: the agency has a financial incentive to keep your budget high. Amazon ppc agency pricing in this model is directly tied to your spending level.

Fixed retainer: Some agencies offer PPC management at a flat rate. Typical range is $1,500 to $6,000 per month. This is especially worthwhile at high ad spend levels because the percentage model becomes disproportionately expensive. At $50,000 in ad spend, a $5,000 retainer saves you significantly compared to 15 percent ($7,500).

Performance-based: Rare, but some agencies tie part of their compensation to defined KPIs. For example, a lower base retainer plus a bonus when specific ACoS or revenue targets are hit. This shows confidence in their own delivery, but carries the risk that the agency optimizes short-term instead of building long-term strategy.

Regardless of model: check what is included in the price. Some agencies charge separately for initial setup, campaign restructuring, or Sponsored Brands creative creation. Clarify before signing. For a detailed overview of all Amazon agency costs, see our dedicated guide.

Red Flags: When to Switch Your Agency

Not every agency relationship works out. These warning signs indicate you should take action.

No access to your campaigns: If the agency manages campaigns in their own account and does not give you direct access, that is a massive red flag. You should be able to see what is happening in your campaigns at any time. Agencies that refuse this are creating artificial dependency.

Generic reports without context: A monthly dashboard with ACoS, impressions, and clicks is not reporting. It is data display. Real reporting includes interpretation: why did ACoS change? What actions were taken? What is the plan for next month? If these elements are missing, the agency is not taking your project seriously.

No proactive communication: If you always have to ask what is happening, something is wrong. A good agency reaches out proactively with updates, recommendations, and warnings. If a keyword suddenly gets significantly more expensive or a competitor bids aggressively, you should know promptly, not in the monthly report.

Rising costs without rising results: If your ad spend grows but revenue and margin do not keep pace, something is off. Either the scaling is not profitable and the agency is ignoring it, or the optimization is not working. In both cases, you need an honest conversation and potentially a plan B.

The agency does not know your products: PPC is not pure number-crunching. Someone who does not understand your products, your target audience, and your competitors cannot develop a good strategy. If after six months the agency still does not know which products are your margin stars, the management is too surface-level.

Amazon PPC In-House vs. Agency: The Decision Framework

The choice between in-house and external is not a matter of faith. It is a cost-benefit analysis. Both paths can work, but under different conditions.

In-house makes sense when: You have a small, focused catalog (under 20 products), your team has Amazon PPC experience, you can invest in professional tools, and the PPC person has enough time to focus exclusively on it. Under these conditions, internal management is often more efficient because you already have the product knowledge and do not need onboarding time for an external agency.

Agency makes sense when: Your catalog is growing and campaign complexity is increasing, you do not have internal PPC expertise and do not want to build it, you are active on multiple marketplaces, or your internal team lacks capacity. An agency brings experience from other accounts that is not available internally. They have the tools, the processes, and the benchmark data to optimize faster.

The most common mistake: managing PPC "on the side" internally. A team member who spends two hours per week looking at campaigns cannot deliver professional management. Either invest properly in-house or outsource completely. The middle ground costs the most because it captures neither the benefits of internal control nor the benefits of external expertise.

If you choose the agency route, plan a transition period of four to six weeks. The agency needs time to understand your catalog, analyze existing campaigns, and build a new structure. Do not expect miracles in the first 30 days. Real results come in month two or three, once the optimized structure takes hold and enough data exists for informed decisions.