Amazon bidding strategy - the most useful tips

Bidding for Amazon Ads revolves around a few key elements - choosing an Amazon bidding strategy, adjusting the bid, and plenty of testing and readjusting. We have created this guideline with useful tips and tricks based on our team’s vast experience with Amazon Ads and according to their best practices.  Whether you’re new to this or if you’re familiar with bids for Amazon Ads, our detailed analysis will help you raise your advertising game on Amazon.  

Choosing the Correct Bidding Strategy

When it comes to Amazon bidding strategy, there are a few different options at your disposal: Fixed bids, Dynamic bids - down only, and Dynamic bids - up and down.

• Fixed bids are great for raising brand awareness and getting your product to rank better. Setting the strategy as fixed doesn’t allow the bids to change based on the likelihood of a conversion. This can sometimes turn costly, but as mentioned, it’s a great way to secure brand awareness and to help with the product's rank.

• Dynamic bids - down only are the best choice in most of the cases. When you select this strategy, Amazon will “only” reduce the bid in real-time for the clicks that are less likely to convert. Amazon’s algorithm perceives opportunities where some particular shoppers are more of a “browsing” type, and instead of wasting money on a bid and a click of a shopper that won’t purchase, the bid is automatically reduced for that one shopper. This strategy is brilliant for saving money, as Amazon’s algorithm does a solid detecting job.

• Dynamic bids - up and down present a risky choice. From our experience, this type of bidding has increased ACoS in most cases, while barely increasing the number of made sales. When you choose an up and down strategy, Amazon increases and decreases the bids in real-time depending on the likelihood of a conversion. 
  This bidding strategy, combined with the top of placement or product page bid, can lead to very high bids and a lot of money being thrown away without achieving significant results.

What Bid Should You Start With?

When creating new campaigns, a rule of thumb is to follow Amazon’s suggested bids. 

A note when selecting the suggested bids is to check the campaign after a day or two, as the suggested bids usually end up being slightly higher when creating the campaign. 
If there are no suggested bids for particular keywords/ASINs/targeting groups, the bid depends on your product and competition. In most cases, it’s good to set it at $0.5 and then revise after a couple of days - depending on ACoS and if you are or aren’t getting traction.

Should You Increase or Decrease the Bid?

Adjusting the bid is art; there’s a fine line between accidentally decreasing the number of sales and lowering the ACoS. When you’re having a high ACoS on a particular keyword, instead of pausing it, you can adjust the bid first. Gradually decrease bids to avoid killing the keyword and leaving it with no impressions. Bids can be fine-tuned, especially when the keyword is having a lot of sales, for example, with a high ACoS. Those sales will decrease when lowering the bid, but with slight adjustments, the sales can still come in while having a profitable ACoS.

Increase the bids whenever it’s possible to do so. If any keywords are making sales at an ACoS that is quite profitable for you, increase the bid to increase the volume of sales that are occurring. Having more sales at a less profitable ACoS improves your organic rank and your organic sales are most likely to increase. 

No Impressions or Clicks

Sometimes the keywords end up having a low amount of impressions with barely any clicks, or without impressions and clicks. There are a few reasons behind this - high competition, low bid, low search volume keyword.

A solid choice here is to increase the bids slowly until they get impressions and clicks, and then re-adjust if needed. Keywords with extreme competition usually end up being less profitable but are great for brand awareness.

Adjusting Bids by Placement

Different ad placements give you the possibility to adjust the bid based on where it will appear. 
There are two biddable positions right now, and those are Top of Search (first page) and Product Pages. These bids are adjusted by percentage and define the percentage increase on the keyword bid that’s inside the campaign.

• Top of Search bid refers to the Sponsored Product placements at the top row of the first page.
  
  
• Product Pages bid refers to the Sponsored Product placements on the product detail page and all non-search placements such as the add-to-cart page.

Along with selecting the bidding strategy, you can also adjust placement bids. It’s possible to enter a percentage increase to the base bid for the two possible placements. If you set the percentage, bids will likely be increased by the specific percentage amount, when the ads compete for the opportunity on those placements.

There can be an up to 900% increase, however, we’re not recommending such enormous increases as they can end up being too much and unprofitable. 

Combining the bids, bid strategies, and placement bids can be complicated to understand, and when they all add up, the bid can be pretty high, so be careful with these adjustments.

To Conclude

Deciding which Amazon bidding strategy, Fixed bids, Dynamic bids - down only, or Dynamic bids - up and down, works the best for your brand is not a simple task.

As we mentioned before, adjusting bids requires certain skills, knowledge, and a lot of practical experience.If you are new to the world of Amazon Advertising, all of this can overwhelm a beginner and can cost you a lot of money. 

That’s why you should consider hiring a team of PPC specialists to handle the bidding for your Amazon Ads. Here at Sellers Alley, our team completely understands the complexity of the Amazon Marketplace and the unique challenges that your brand can face.

The best thing you can do for your Amazon account today is to book our FREE audit!