State of Amazon Advertising in 2026: Trends, Data, and Predictions

Amazon advertising has grown from a simple keyword bidding system into the third-largest digital advertising platform in the world, behind only Google and Meta. In 2026, advertisers on Amazon face a landscape that is more competitive, more complex, and more AI-driven than ever before.

This report examines the major trends shaping Amazon advertising in 2026, backed by data from industry benchmarks and platform observations. Whether you are a solo seller or an agency managing dozens of accounts, understanding these trends is essential for staying competitive.

Trend 1: CPCs Continue to Rise

The average cost per click on Amazon has increased every year since the platform introduced advertising. In 2026, this trend continues, driven by more advertisers competing for the same finite number of shopping sessions.

Trend 2: AI-Powered Bidding Goes Mainstream

In 2025, AI-driven bid optimization was a feature of enterprise tools. In 2026, it is table stakes. Amazon's own Performance+ campaigns use machine learning, and third-party tools from Pacvue, SellerPilot AI, and others have made AI bidding accessible to sellers of all sizes.

How AI bidding works in practice:

Rather than setting static bids or simple rules ("if ACoS > 30%, lower bid by 10%"), AI bidding systems analyze historical performance data to calculate the optimal bid for each keyword in each auction context.

SellerPilot AI, for example, uses RPC-based formulas: target bid = (revenue per click) x (target ACoS) x (damping coefficient). The damping coefficient prevents overcorrection — a common problem with rule-based systems where bids oscillate between too high and too low.

The shift from rules to algorithms:

Rule-based systems react to past performance with fixed adjustments
AI systems consider multiple variables simultaneously: conversion rate trends, competition levels, time of day, inventory status
The best AI systems incorporate damping or momentum to make stable, incremental adjustments rather than dramatic swings

What this means for sellers:

Manual bid management is increasingly uncompetitive. A seller adjusting bids once a week cannot compete with AI systems adjusting every few hours.
The quality of your AI tool matters more than having an AI tool at all. A poorly implemented algorithm can waste money faster than manual management.
Sellers should understand the logic behind their tool's bidding, not just trust it blindly. Ask your tool provider how bids are calculated.

Trend 3: Video Ads Become Essential

Sponsored Brands Video has gone from an experimental format to a core advertising channel. Amazon has expanded video placement across search results, product pages, and even the mobile app's home feed.

The growth:

Sponsored Brands Video ad spend has grown approximately 40-50% year over year
Conversion rates for video ads are 15-30% higher than static Sponsored Products ads in most categories
Video ads now appear in more placements, including mid-page search results and competitor product pages

Why video works on Amazon:

Video demonstrates product use cases that photos cannot convey
Auto-playing video in search results captures attention in a sea of static images
Video reviews and demonstrations build trust more effectively than text
Mobile shoppers (now over 60% of Amazon traffic) engage more with video than static content

Challenges with video:

Creating quality video content requires investment ($500-5,000 per video)
Amazon's video specifications are strict (6-45 seconds, specific aspect ratios)
Not all products benefit equally from video — simple commodity products may not justify the cost
Video performance metrics are harder to compare with static ad benchmarks

What this means for sellers:

If you have not tested Sponsored Brands Video, 2026 is the year to start. The format is no longer optional for competitive categories.
Invest in a few high-quality videos for your top-selling products rather than low-quality videos across your entire catalog.
Test different video styles: product demonstration, lifestyle usage, unboxing, comparison, and problem-solution.

Trend 4: DSP Democratization

Amazon DSP (Demand-Side Platform) was historically reserved for brands with large advertising budgets and agency relationships. In 2026, Amazon has continued lowering the barriers to entry, making DSP accessible to more sellers.

What has changed:

Self-service DSP access has expanded, with lower minimum spend requirements
Amazon has simplified the DSP interface for non-expert users
More third-party tools now integrate DSP management alongside Sponsored Ads
AMC (Amazon Marketing Cloud) data is more accessible, providing richer audience insights

Why DSP matters:

DSP enables retargeting — showing ads to shoppers who viewed your product but did not purchase
DSP reaches shoppers off Amazon (on third-party websites and apps) and brings them to your Amazon listing
DSP audience targeting is more sophisticated than Sponsored Ads targeting, using purchase history, browsing behavior, and lifestyle segments
DSP provides view-through attribution, capturing the impact of impressions beyond clicks

The current state:

DSP is most effective for brands with strong listings and good conversion rates. Retargeting a shopper back to a listing with 3 stars and a 5% conversion rate wastes money.
The learning curve remains significant. Self-service DSP is easier than it was, but it is still more complex than Sponsored Products.
ROI measurement for DSP requires longer time horizons and more sophisticated attribution than Sponsored Products.

What this means for sellers:

Brands spending $5,000+ per month on Sponsored Ads should evaluate DSP as a complement, not a replacement.
Start with retargeting campaigns (targeting shoppers who viewed your products) before expanding to prospecting audiences.
Use AMC data to build custom audiences based on purchase behavior.

Trend 5: Sponsored TV Gains Traction

Amazon's Sponsored TV product — which places video ads on Amazon's streaming properties (Fire TV, Freevee, Thursday Night Football, and partner streaming services) — has grown significantly in 2026.

The opportunity:

Sponsored TV reaches cord-cutters who are not reachable through traditional TV advertising
Amazon's unique advantage: they know what shoppers buy, so they can target TV ads based on purchase behavior (not just demographics)
No minimum budget requirement for Sponsored TV, making it accessible to smaller brands
Amazon reports that brands using Sponsored TV alongside Sponsored Products see a measurable lift in branded search volume

The reality check:

Sponsored TV is a brand awareness play, not a direct response channel. Expect long attribution windows and indirect impact.
Creative costs are higher than other Amazon ad formats — you need broadcast-quality video
Measurement is still maturing. Connecting a TV impression to an Amazon purchase involves assumptions and modeling.
Most effective for brands with strong Amazon presence (high organic rank, good reviews, strong listings) where increased awareness translates to increased sales.

What this means for sellers:

Sponsored TV is not for everyone in 2026, but it is worth monitoring. Brands with $50K+ monthly revenue and strong brand stories should test it.
The brands that invest early in Sponsored TV will have an advantage as the channel matures and competition increases.

Trend 6: AMC Audiences Transform Targeting

Amazon Marketing Cloud (AMC) has moved from a niche analytics tool to a core part of many brands' advertising strategy. The ability to create custom audiences based on granular shopping behavior data is changing how advertisers target on Amazon.

What AMC enables:

Create audiences of shoppers who purchased from your brand 6-12 months ago but have not reordered
Target shoppers who viewed competitor products but did not purchase
Build lookalike audiences based on your best customers' shopping patterns
Analyze the full customer journey across ad types and touchpoints

The 2026 evolution:

AMC audiences can now be activated in Sponsored Display and DSP campaigns
Amazon has added more pre-built audience templates for sellers without SQL expertise
Cross-campaign analysis reveals which ad type combinations drive the most conversions
Attribution modeling in AMC goes beyond last-touch, showing multi-touch contribution

What this means for sellers:

Brands with 1,000+ orders per month have enough data to build meaningful AMC audiences
The combination of AMC audiences with Sponsored Display creates highly targeted, cost-efficient campaigns
Agencies that master AMC provide a genuine differentiation over those that only optimize bids

Trend 7: The Full-Funnel Imperative

Amazon advertising in 2026 is no longer just about Sponsored Products keywords. The most successful brands run a full-funnel advertising strategy:

Top of funnel (awareness):

Sponsored TV for broad brand awareness
DSP prospecting for reaching new audiences
Sponsored Brands for category and brand discovery

Middle of funnel (consideration):

Sponsored Brands Video for product demonstration
Sponsored Display for retargeting shoppers who viewed but did not purchase
DSP retargeting with sequential messaging

Bottom of funnel (conversion):

Sponsored Products for high-intent keyword targeting
Sponsored Brands for branded keyword defense
Sponsored Display for competitor targeting

Post-purchase:

DSP for cross-sell and upsell to existing customers
Sponsored Display for replenishment reminders

Why full-funnel matters now:

Bottom-funnel competition (Sponsored Products) has driven CPCs to levels where profitability requires supplementing with cheaper upper-funnel traffic
Amazon's algorithm increasingly rewards brands that drive external traffic and broad awareness
New-to-brand customer acquisition through bottom-funnel alone is becoming prohibitively expensive in competitive categories

Trend 8: Automation vs. Control — The Ongoing Tension

Amazon continues to push automated campaign types that give the platform more control:

Performance+ campaigns use Amazon's machine learning to optimize targeting, bidding, and creative automatically
Auto-targeting for Sponsored Products continues to improve
Broad match reach has expanded to include more tangentially related search terms

The tension:

Sellers want control over their advertising. Amazon wants efficiency at scale (and, critics argue, wants to maximize its own ad revenue). These goals sometimes conflict.

The practical approach for 2026:

Use Amazon's automation where it works (auto campaigns for discovery, broad match for expansion) but maintain manual campaigns for your highest-value keywords
Monitor automated campaign performance closely — the algorithm optimizes for Amazon's metrics, which may not align with your profitability goals
Use third-party tools that provide the automation benefits (AI bidding, search term harvesting) while keeping you in control of strategy and targets

Predictions for the Rest of 2026

Based on current trends, here is what we expect for the remainder of 2026:

CPCs will continue rising 10-15%. Competition is not decreasing and new advertisers continue entering the platform.

AI bidding adoption will exceed 50%. More sellers will use tool-based or Amazon-native AI bidding than manual bid management.

Video will account for 20%+ of ad spend. Sponsored Brands Video and Sponsored TV will capture an increasing share of advertising budgets.

DSP self-service will grow 30%+. Lower barriers and better tools will bring DSP to mid-sized sellers.

AMC will become standard for agencies. Agencies that do not offer AMC-based audience strategies will be at a competitive disadvantage.

Sponsored TV will see 50%+ growth in advertiser adoption. As measurement improves and costs remain reasonable, more brands will test the channel.

The average number of ad types per brand will increase. Brands currently using only Sponsored Products will add Sponsored Brands, Display, or Video as competition in SP grows.

What This Means for Your Business

The overarching theme of Amazon advertising in 2026 is complexity. More ad types, more targeting options, more measurement tools, and more competition create an environment where the winners are those who can manage this complexity effectively.

For solo sellers: invest in a PPC management tool that handles bid optimization automatically. Focus your limited time on strategy (which ad types to use, where to allocate budget) rather than tactical bid adjustments.

For agencies: master AMC audiences, full-funnel strategy, and video creative to differentiate from agencies that only optimize Sponsored Products bids.

For all advertisers: accept that advertising is a permanent cost of doing business on Amazon. Optimize for efficiency, invest in tools and education, and build your brand so that organic sales reduce your dependence on paid traffic over time.

The brands that win in 2026 will not necessarily be the ones that spend the most. They will be the ones that spend the smartest.

State of Amazon Advertising in 2026: Trends, Data, and Predictions