How to Choose the Right Ad Type for Each Stage of Your Amazon Funnel

Selling on Amazon is no longer just about listing a product and waiting for the sales to roll in. In 2025, advertising is essential to success. But running ads blindly won’t deliver results. You need a strategy that matches your customer’s journey. That means understanding your Amazon sales funnel, from awareness to consideration and conversion — and selecting the right ad type for each stage.

When used correctly, Amazon’s ad platform can boost your visibility, improve rankings, and increase conversions. But using the wrong type of ad at the wrong time can quickly drain your budget. Here’s how to approach your ad strategy based on each phase of the Amazon funnel.

Understanding the Amazon Funnel

Before choosing your ad types, it’s important to grasp how shoppers behave on Amazon. Much like traditional marketing funnels, the Amazon funnel has three key stages:

• Top of Funnel (TOFU): Shoppers are in discovery mode. They may not even know your brand exists.
• Middle of Funnel (MOFU): Buyers are comparing options and narrowing their choices.
• Bottom of Funnel (BOFU): They’re ready to purchase — they just need a final push.

Different ad types suit different objectives. Let’s break down which ones work best at each stage.

Top of Funnel: Build Awareness and Reach New Audiences

At the awareness stage, your goal is to get in front of people who have never heard of your brand or product. Since Amazon is becoming more of a search engine than a simple shopping site, this is where broad targeting and off-Amazon strategies come into play.

One of the most effective tools here is Amazon DSP (Demand-Side Platform). It allows you to reach shoppers on and off Amazon, based on shopping behaviour, demographics, and interest segments. You can also retarget people who viewed similar products or competitors.

Another strong option at this stage is Sponsored Display Ads. These ads appear on product detail pages and across Amazon’s ecosystem, helping you reach new audiences before they actively search for your product.

TOFU is not where you push for immediate conversions. Instead, use these ads to raise awareness, introduce your product line, and build brand familiarity. Brands often work with an Amazon PPC Agency at this stage to set up high-impact campaigns that reach broader audiences while keeping the cost per view manageable.

Middle of Funnel: Drive Consideration and Comparison

Once shoppers become aware of your product, the next phase is evaluation. They’re browsing, comparing, and reading reviews. This is where your ads need to highlight value, features, and credibility.

Sponsored Brands Ads are the go-to here. These appear at the top of search results with your logo, a custom headline, and multiple product listings. They’re great for reinforcing brand identity and showing variety in your product range.

For instance, if you sell eco-friendly kitchenware, Sponsored Brands lets you showcase multiple items (like reusable wraps, bamboo utensils, and compost bins) in one place — giving shoppers a reason to explore your brand further.

You can also use Sponsored Display with audience targeting to remind shoppers who viewed your product but didn’t buy. This soft push helps guide them back into the funnel and nudges them toward a decision.

At this stage, your ads should balance education and persuasion. Use high-quality images, clear messaging, and compelling USPs (Unique Selling Propositions). Highlight reviews, certifications, or social proof to build trust.

Bottom of Funnel: Convert Shoppers into Buyers

Now the buyer is ready. They’ve compared options, read reviews, and probably checked your competitors too. This is where your focus should be razor-sharp: drive conversions.

Sponsored Products Ads are the star here. They appear directly in search results and on product detail pages, targeting high-intent keywords. These ads are designed to grab attention when buyers are actively searching for your exact product or something very similar.

The beauty of Sponsored Products is that they look like organic listings, making them less intrusive and more trusted by shoppers. A well-optimised listing combined with these ads can deliver strong ROI.

You can also use ASIN targeting within Sponsored Display to place your product on competitors’ listings. This tactic lets you catch customers who are close to making a decision — and redirect them to your product at the last minute.

Conversion-stage ads should focus on performance. Make sure your pricing is competitive, your listing is polished, and your ad copy addresses any common objections or pain points. Use urgency (like “limited stock” or “deal ends soon”) if applicable.

Budgeting Across the Funnel

One common mistake new sellers make is allocating all their ad spend to the bottom of the funnel. While conversion ads are vital, neglecting awareness and consideration means fewer shoppers ever reach that stage.

A balanced budget might look like:

• 30% to top-of-funnel (DSP, Sponsored Display)
• 40% to middle-of-funnel (Sponsored Brands, retargeting)
• 30% to bottom-of-funnel (Sponsored Products, ASIN targeting)

Of course, the exact mix depends on your product category, competition, and goals. Some niches require heavier TOFU investment (like lifestyle or premium products), while others thrive with a BOFU-heavy strategy (such as trending gadgets or seasonal items).

Final Thoughts

Choosing the right ad type for each stage of your Amazon funnel can dramatically improve your marketing results. It’s no longer about picking one format and hoping for the best — it’s about aligning your strategy with buyer intent and guiding shoppers every step of the way.