Why 70% of Amazon Ad Spend Is Wasted (and How to Fix It with Smarter Targeting)

If you’re advertising on Amazon, you already know the promise: millions of shoppers, immediate demand, traffic at scale. But here’s a harsh truth: nearly 70% of Amazon ad spend goes to clicks that will never convert profitably. At Brandkyte, we’ve seen this again and again—and we know exactly how to fix it.

In this post we’ll walk through:

1. Why so much ad spend is wasted.

2. The three root mistakes behind that waste.

3. How smarter targeting, layered campaign architecture, and AI/human optimization can turn your Amazon PPC from cost-center into profit engine.

4. How Brandkyte helps Amazon sellers scale with intelligence.

The waste problem: more spend ≠ more profit

Many sellers think “just spend more, and sales will follow.” But on Amazon, clicks cost money and every wasted click pulls down your ranking, your conversion rate and your margins. Even if you’re seeing healthy sessions, if the conversions aren’t there, you’re burning cash.

According to our internal benchmarking, up to 70% of ad spend ends up generating clicks that don’t convert profitably. That’s why the headline: Why 70% of Amazon Ad Spend Is Wasted.

Why does this happen? Consider:

• Ads target broad or irrelevant keywords → many clicks that don’t buy.

• Campaigns unsystematic or reactive → structure is missing.

• No smart optimisation layer (human + AI) → wasted placements, time of day, keywords drain spend.

Fixing it isn’t about just turning up the budget—it’s about spending smarter.

Mistake #1: Treating PPC like a slot machine

Title: Most sellers treat PPC like a slot machine.
Body: When you launch ads and just let them run, hoping for magic—without structure—you’re playing the slots. You might get lucky … but odds are not on your side. Many sellers launch automatic campaigns, throw money at bids, jump between keywords, and compete against themselves (and each other) in the same catalog.

Fix: Build a layered campaign system — Discovery, Scaling, Defence.

• Discovery: low-budget campaigns to uncover converting keywords, placements, search terms.

• Scaling: once you’ve identified winners, scale manually with exact-match, high-bid ads.

• Defence: protect your brand, defend profitable SKUs, monitor cannibalisation.
  With this structure you move from reactive to proactive.

Mistake #2: Irrelevant keywords burn your budget

Title: Broad match burns your budget.
Body: A huge source of wasted spend is irrelevant traffic. Broad match keywords may show your product to many searchers—but many will not have purchase intent. On Amazon, the algorithm prioritises relevance — not just reach. Irrelevant clicks cost you ranking, velocity, and dollars.

Fix: Focus on exact-match, proven keywords. Use auto campaigns only for discovery.
That means:

• Start with auto campaigns to gather data (search terms, converting ASINs).

• Analyse converted terms, then migrate winners into manual exact-match campaigns.

• Pause broad/phrase match that show little or no conversion.

• Monitor negative keywords/ASINs to avoid wasted wasted impressions.
  This approach makes each click count.

Mistake #3: No AI optimisation (just human guesswork)

Title: Humans can’t analyse data 24/7 — but AI can.
Body: Amazon campaigns generate huge volumes of data—keywords, impressions, placements, time of day, buyer behaviour. Manual optimisation alone struggles to keep up. Without AI-powered tools you’ll miss patterns (wasted placements, poor timing, inefficient bids) until you’ve bled already.

Fix: Combine human insight with AI precision.

• Use AI to surface wasted placements, poor converting keywords, abnormal spend patterns.

• Use human strategic insight to interpret those results: Is this keyword a long-term winner? How does this fit your brand strategy?

• Make continuous optimisation a discipline—not a one-off.
  When done right, this combo turns your PPC into a profit-engine rather than a budget sink.

Key Insight: You don’t win by spending more. You win by spending smarter.

Headline: You don’t win by spending more. You win by spending smarter.
Body: If you apply layered campaign structure + targeted keywords + AI/human optimisation, you build sustainable, profitable ad growth. Two graphs tell the story: one flat (spend up, sales flat), one trending upward (spend stable, profit rising). That second graph is what we aim for.

The Brandkyte Edge

Headline: How Brandkyte Helps
Body: At Brandkyte we combine Amazon insider knowledge, real brand-owner experience, and smart AI tools to create scalable PPC systems that actually convert. Our three pillars:

• Amazon Expertise: We’ve launched and scaled multiple brands on Amazon, lived the marketplace life.

• Brand Experience: We understand what it means to own your brand, protect it, and grow it beyond mere clicks.

• Agentic AI: We apply AI to your PPC data so you can stay ahead—not behind the curve.
  (This also ties into our blog posts like “3 Reasons Amazon Sellers Fail to Build a Profitable DTC Channel” and “5 Mistakes Amazon Sellers Make Before They Even Run Ads”.)

Want to stop wasting ad spend? Here’s what to do.

1. Audit your current ad structure. Are you simply running automatic campaigns and bidding higher, or do you have distinct campaign layers?

2. Analyse your conversion funnel. What percentage of clicks convert? If it’s low, target and relevance are likely the issue.

3. Apply negative-keyword and negative-ASIN filters so wasted audiences are excluded.

4. Deploy exact-match campaigns on proven terms, and scale with safe bids.

5. Use an AI-enabled monitoring tool (or let Brandkyte do the heavy lifting) to identify waste and optimise continuously.

6. Reinvest savings (from reduced wastage) into scaling winning campaigns—not simply throwing more budget at the problem.

Why it matters for your brand

Wasting 70% of ad spend isn’t just about the wasted dollars. It means:

• Lower conversion rates → higher ACoS (Advertising Cost of Sale) → poorer profit.

• Loss of Amazon algorithm momentum (if you’re generating clicks but no sales).

• Reduced budget for your winners (because you’ve blown cash on losers).

• Growth ceilings: you’ll hit a point where more spend simply amplifies waste.
  Instead, by focusing on spend quality over spend quantity, you preserve margin, protect your brand, and build real growth.

More reading & related topics

• Read our blog on 3 Reasons Amazon Sellers Fail to Build a Profitable DTC Channel to understand how marketplace-only brands struggle to build direct channels.

• Also check out 5 Mistakes Amazon Sellers Make Before They Even Run Ads — solid pre-PPC diagnostics.

• For posture beyond Amazon ads, our article on Why You Need a Strategy for Shopify and Amazon explores multi-channel synergy.

• And if you’re thinking omni-channel, don’t miss Omni-Channel: A Customer-Centric Strategy to see how ads integrate into a wider brand ecosystem.

Final Thoughts

Running Amazon ads without a solid framework is like throwing money into a black hole. The “70% wasted” figure isn’t hyperbole—it’s what we consistently observe. But with the right targeting, structure and optimisation system (layered campaigns, exact-match focus, AI + human oversight), you can turn what was waste into growth.

If you’re ready to stop burning budget and start building profit, get a free Amazon PPC Audit with Brandkyte today. Let’s uncover your biggest growth opportunities, eliminate the waste, and start scaling smarter.

Built by an Amazon Insider and 7-Figure Brand Owner.