Amazon PPC ads isn’t an easy task! There are three bidding strategies you can choose from when creating your Amazon Sponsored Product ad campaigns. Choose the strategy that best suits your campaign goal.
Amazon PPC ads: bidding strategies
Ads on Amazon are based on the PPC (pay-per-click) format. The advertiser does not pay for the display of the ad as a whole (pay-per-impression). More about advertising optimization on Amazon here, and about how to set up ads here.
Dynamic bids – down only
Amazon will lower your bids in real time for clicks that are less likely to result in a sale.
If Amazon sees where your ad is less likely to convert into a sale, it may lower your bid.
Dynamic bids – up and down
Amazon will increase your bids in real time for clicks that are more likely to convert into sales. The company can also reduce them for clicks that are less likely to convert into a sale.
Amazon will not increase your bids by more than 100% for placements at the top of the first page of search results. And by more than 50% for all other placements. Consider this when choosing a bet when using this strategy.
Since this strategy adjusts your bid up and down in proportion to the likelihood of a conversion, it can generate more conversions for your ad spend compared to the other two strategies. If a company finds an opportunity where your ad is more likely to convert into a sale, Amazon may increase your bid for that auction.
If the company finds another opportunity that is less likely to result in a sale, they may lower your bid for that auction. For example, Amazon can adjust your bid from $ 1.00 to a maximum of $ 2.00.
Fixed bids
Amazon will use your exact bid for all opportunities and will not adjust bids based on the likelihood of a conversion. Compared to dynamic bidding strategies, this strategy can get you more impressions but fewer conversions due to your ad spend.
Rule-based bidding
Amazon eliminates the guesswork when adjusting bids to achieve your marketing strategy.
For any sponsored product campaign that meets the eligibility criteria, you can apply the ROAS cap rule.
Amazon can then adjust your base rates up and down to increase conversions while maintaining your limits.
How to test Amazon bidding strategies?
To compare the performance of different bidding strategies, consider a campaign that used only dynamic bids (only downgrades). Next, change its strategy to dynamic rates – up and down.
To change the bidding strategy for Amazon Sponsored Products, go to the Campaign settings tab and update the Campaign bidding strategy.
When testing out your bidding strategy, it is best to choose a campaign that is stable (ACOS and conversions are relatively stable over several weeks), has been running for a while, and is generating enough conversions.
We recommend that you limit your changes when testing strategies so that you can relate the difference in performance to a specific change.
Please note that this method is not ideal as conditions may change every week, but it can be helpful.
If at any point you want to revert to your previous bidding strategy, you can do so in the Campaign settings tab.
We do not recommend:
- Create a new dynamic bids up and down campaign and compare it to existing dynamic bids only down campaigns.
The new campaign will not accurately compare to existing campaigns. After all, Amazon’s prediction algorithms that optimize bids for dynamic bidding work better when they have more data.
If your new campaign is very different from the existing ones, you won’t be able to reliably attribute the difference in performance to just different bidding strategies.
- Create two identical campaigns with different bidding strategies.
These campaigns will compete for the same opportunities, and this interaction can skew the outcome. Your ad’s CPC is not affected by your other campaigns. But as a testing strategy, this is unlikely to give you clear results.
1