Amazon Advertising Launches New Hidden Feature That Significantly Boosts Conversion Rates!

Since the emergence of Chat-GPT, various industries have been desperately chasing the pace of Gen-AI (Generative AI). Last week, Apple unveiled its brand-new “Liquid Glass Technology” at its 2025 Spring Launch Event. However, because the world’s highest-valued company failed to demonstrate innovation in AI technology, its market value plummeted by $75 billion (approximately RMB 538.58 billion) within just 6 minutes after the event. This fully illustrates that, amid the AI technological revolution, industry giants with monopoly power are being defeated by little-known startups or even individual AI experts. Among these, Amazon can be considered one of the frontrunners in this AI race. Yet, among all e-commerce platforms, Amazon might be the only one that is truly starting to comprehensively replace traditional models with AI.

As sellers, we might want to reflect: if e-commerce platforms and large corporations are fighting for survival and transforming through AI at all costs, how can we survive into tomorrow if we are still solely focused on “operational experience and skills” centered on human expertise?

Since Amazon officially announced it last September, Amazon’s AI Video Ads were finally officially launched last week (after having gradually opened to a small group of sellers over the past few months). You can now see this feature in your Seller Central - Brand Ads - Video Ads.

HuiNet immediately tested this ad feature. How exactly should this ad feature be set up? What is its actual video display effect? In today’s article, we will share with you in detail the production techniques for Amazon Video Ads.

Part One: Understanding Amazon’s New Advertising Logic in the AI Era

01 AI Features Directly Related to Listing Optimization

In an article two weeks ago, we introduced in detail a series of AI features Amazon has already launched, so we won’t repeat them here. However, since last year’s Prime Day, Amazon has intensively rolled out the following features that directly impact Listing exposure, which are particularly worth noting:

• Title character count reduced from 120 to 80 characters

• AI-generated listing copy

• AI-generated A+ Content pages

• AI ad auto-optimization features

• AI ad scene generation features

02 AI Features Related to Listing Exposure and Conversion

It’s important to note that the above features are ones that sellers can edit and adjust themselves, while the following features are entirely determined by Amazon’s new AI algorithms, including:

• Automatically adding up to 40 characters of keywords to listing titles to better match customer search terms, thereby increasing click-through rates.

• Creating voice shopping guides for certain listing categories, allowing customers to hear key selling points and product reviews.

• Allowing Rufus (Amazon’s AI shopping assistant) to analyze brand influence both on and off Amazon and directly recommend products to consumers (rather than requiring consumers to search for suitable listings themselves).

03 Amazon’s Basic Advertising Logic

Of course, the above are just a few of the AI algorithm features most relevant to sellers. The core of Amazon operations—advertising—can be simply summarized as follows:

• Keyword Search Ads: Competition for product placement and search ranking within Amazon. Important, but influenced by many factors; bidding costs are rising, while conversion rates are declining.

• Brand Ads: A key to Rufus recommendations and brand influence growth. It’s still about search ranking competition but with larger placements and more prominent exposure. Think of these as display ads for your brand store and brand-specific products.

• Display Ads: Primarily target specific audience segments both on and off Amazon, focusing on showing ads to potential customers with purchase intent. Large impressions but require sustained investment to see conversions.

• Cross-Retailer Product Ads: A newer feature we introduced previously, mainly helping Amazon sellers promote food and nutrition products on three (currently) offline supermarket websites.

• Video Ads: Originally allowed sellers to place video ads on Prime Video and TV shows, but Amazon seems to have pulled this feature from most seller accounts due to insufficient participation.

04 Amazon AI and Ad Placement Logic

From Amazon’s AI advertising features perspective, both the new AI image and video generation functions are now primarily concentrated in Brand Ads and Display Ads, with Brand Ads seeing a higher concentration of AI technology. You may have already noticed the role AI plays in Brand Ad exposure:

• Mobile End: The more Brand Ads you run, the more frequently your ads appear on mobile, driving more clicks and conversions, and increasing the likelihood of being recommended by Rufus.

• Desktop End: Previously focused on flagship store banner ads and three promoted ASINs. Now, Amazon emphasizes the AI readability of ad creatives. Sellers are encouraged to generate more AI-comprehensible content, using dynamic AI-generated images and videos to attract customer clicks and purchases.

Part Two: Amazon AI Video Ad Setup Techniques

Now, let’s walk through creating an AI Video Ad together:

Step 1: Create an Ad

Go to Advertising → Campaign Manager → Create Campaign → Sponsored Brand.

Step 2: After naming your ad campaign, set a daily budget of $20-$50.

Step 3: Set Campaign Objective:

• For listings with fewer orders: select Drive Page Visit to observe conversion performance.

• For listings with stable and larger order volumes: select Grow Brand Impression Share.

Then choose Video for Ad Format and select Product Detail Page as the landing page to direct clicks to the product details.

Step 4 (AI Optimization Option): Cost Control

This is a newly introduced AI machine learning optimization feature from Amazon that helps sellers achieve ad performance targets in the increasingly competitive bidding environment. Let’s explain this in detail:

• You can set a target value for key metrics (such as click-through rate, conversion rate, ACOS, CPC, etc.), and the ad system will automatically adjust bids to achieve this target as closely as possible.

• Sellers simply communicate the desired outcome to Amazon, and its AI will handle the bidding accordingly.

• The goal is to keep the cost-per-click close to or below the set target, ensuring that ad spend isn’t exhausted too quickly or spent inefficiently.

• Amazon’s AI will aim to get as many clicks as possible while staying near the CPC target. Note: This feature involves a machine learning period. Allow 48–72 hours for Amazon to calculate optimal delivery strategies. During this period, ad spend may exceed budget or face underdelivery.

Additionally, to allow Amazon AI to optimize ads effectively, your daily budget should be at least 20–30 times the CPC target set in Cost Control. For example, if you set CPC at $1, your daily budget should be at least $20–30.

Step 5 (AI Optimization Option): Bid Adjustment

This is another demonstration of Amazon AI capabilities. Here, you can increase bids for three customer segments:

• New-to-brand shoppers

• Shoppers who clicked or added your product to cart

• Customers who previously purchased your brand products

This ensures your ads reach the most valuable audiences and improve conversions.

Step 6: Targeting

Choose either keyword targeting (with negative keywords) or product targeting. This step follows conventional ad setup. One key difference: if you activated Cost Control in Step 4, you no longer need to manually set bids for each keyword or match type.

Step 7: Create Video Asset

You have three options:

• Generate a video with AI

• Choose from creative asset library

• Upload video manually

We tried the AI-generated video option. Amazon appears to remove the product’s background and add some basic animation effects. At present, the AI video generation seems to still be in a testing phase, but we expect much more powerful features to be released soon.

Once setup is complete, click Create to launch your AI-powered, machine-learning-optimized ad campaign. A few additional recommendations:

• The above budget suggestions are for reference only. Adjust according to your actual budget.

• We recommend creating 3–5 identical ad campaigns with equal budgets, then monitor performance: increase budget for high-conversion ads, and reduce or pause low-performing ones.

In addition, this week’s HuiNet POD and Etsy Operations Masterclass will introduce even stronger AI tools. You may consider combining these advanced AI-generated hyper-realistic videos with the ad setup method above to achieve even better results.