The Amazon advertising landscape is undergoing its biggest transformation in 2026 since the introduction of Sponsored Products. New ad formats, AI-powered bidding strategies, and a fundamental shift from keyword to audience targeting are changing the rules for brands on the marketplace. Those who don't actively adapt their PPC strategy risk rising costs with declining performance.
New Ad Formats: Sponsored TV and AMC Audiences
Amazon has massively expanded its advertising portfolio in recent months. Sponsored TV, previously only available through the DSP console, is now accessible as a self-service format directly in the Advertising Console. For mid-sized brands, this means access to video advertising on Fire TV, Freevee, and Prime Video for the first time without minimum budgets of 30,000 euros.
Even more exciting are the new AMC Audiences (Amazon Marketing Cloud). Brands can now create custom audience segments based on first-party data and use them directly in Sponsored Display and DSP campaigns. Examples of high-performing AMC segments:
- Repeat buyer lookalikes: Customers who show similar purchase patterns to your best existing customers
- Category newcomers: Users searching in your category for the first time
- Cross-sell segments: Buyers of Product A who haven't purchased Product B yet
- Consideration phase: Users who viewed your product but didn't buy, and are browsing similar products
AI-Based Bidding: More Control Through Less Manual Intervention
Amazon's algorithms for automatic bid optimization have made a quantum leap in 2026. The new rule-based bidding options allow you to combine AI-powered bidding strategies with clear business rules. Specifically, you define rules like "increase the bid by 30% when the conversion rate exceeds 12%" or "reduce to daily minimum when ACOS exceeds 40%."
Our recommendation: Use AI bidding for the majority of your campaigns, but maintain manual control for strategically important exact-match keywords. We achieve the best results with a 70/30 split: 70 percent automated, 30 percent manually controlled.
The Shift from Keyword to Audience Targeting
The biggest strategic change in 2026 is the transition from purely keyword-based to audience-based targeting. Amazon possesses an unparalleled treasure trove of purchase behavior data, and the company is now aggressively monetizing this advantage.
What this means for your strategy:
- Sponsored Products remain the foundation of your PPC strategy, but their share of total budget should decrease from 80% to 55-65%
- Sponsored Display with audience targeting takes on a growing share, especially for retargeting and conquest strategies
- DSP becomes accessible for mid-size brands through lower entry budgets and self-service options starting at approximately 5,000 euros per month
- Sponsored Brands Video receives more placements in search results and becomes a must-have for brand-registered sellers
Budget Allocation: The 2026 Framework
Based on our work with over 30 German brands on Amazon, we recommend the following budget distribution for 2026:
- Sponsored Products: 55-60% of total budget. Focus on exact and phrase match with clear keyword tiering
- Sponsored Brands (incl. Video): 15-20%. Brand visibility and video content as a differentiator
- Sponsored Display: 10-15%. Retargeting, audience-based targeting, and competitor conquest
- DSP (if budget allows): 10-15%. Upper-funnel awareness and complex retargeting sequences
The exact percentage isn't what matters – it's the strategic diversification. Brands that still put 90% of their budget into Sponsored Products in 2026 will lose ground to diversified competitors.
DSP for Mid-Market: Now or Never
Amazon DSP was long a tool for large brands with six-figure monthly budgets. That's changing fundamentally in 2026. New self-service options and lower minimum budgets make DSP accessible for mid-sized brands with advertising budgets starting at 5,000 euros monthly.
The strongest use cases for mid-size brands:
- Sequential retargeting: Guide users who viewed your product through the funnel with a series of creatives
- Category awareness: Reach new potential customers on Amazon-owned properties (Fire TV, Twitch, IMDb)
- Competitive conquest: Specifically target buyers of competitor products with your brand
Conclusion: Action Required for 2026
The Amazon PPC landscape is evolving faster than ever. Brands that adapt their strategy now will secure a competitive advantage. Three concrete steps you can implement immediately:
- Review your current budget distribution and plan a gradual diversification over Q2/Q3
- Test Sponsored Brands Video if not already active, and create at least 3 video creatives per main product
- Evaluate AMC Audiences and create initial custom segments based on your existing customer data