When deciding which bidding strategy to use for your Amazon campaigns, you will need to consider your business and marketing goals, products, and competitors. Continual testing and analysis is important to ensure that you’re not overpaying or underpaying for clicks.
There are several different bidding strategies available on Amazon, ranging from fixed bids to dynamic auctions and rule-based bidding. Each one can be adapted to suit your needs and goals.
Dynamic auction
Amazon’s new dynamic auction feature allows sellers to adjust their bids in real time based on the likelihood that a click will turn into a conversion. It uses a number of algorithms to determine which ads are likely to convert, based on historical data and buyer behavior.
Dynamic bidding is available for both Top of Search and Product Pages placements and can be used to raise or lower your bids based on your ad’s purchase probability. It’s best used when you’re aiming to win placements at the top of search results or product pages, where Amazon raises bids by up to 100% in those auctions that are most likely to convert.
Another dynamic bidding strategy is dynamic bids – down only, which allows you to set a fixed bid amount and then let Amazon automatically reduce your bids by up to 100% if it rates your ad as less likely to convert. This is a good option for budget control since it allows you to spend less on ad campaigns that are not as likely to convert, while still gathering important search data and gaining impressions.
Dynamic bids up and down
Amazon introduced a new feature to Sponsored Product ads called Dynamic Bidding. This allows the system to optimise your bids based on how likely your keyword, category or product is to convert sales.
There are two different dynamic bidding strategies – “Dynamic bids – down only” and “Dynamic bids – up and down”. With these strategies, Amazon lowers your bids by up to 100% if it rates your keywords or products as less likely to convert.
The dynamic bidding strategy that works best for your campaigns will depend on your goals, products, and competitors. In most cases, it’s advisable to switch from the default “down only” strategy to “up and down” once your product has sufficient data for the AI-powered algorithm to perform properly.
Match each auto bidding strategy to the right campaign goal
Automated bidding strategies use machine learning to optimize bids on your behalf based on specific campaign goals. They are compatible with text ads, Dynamic Search Ads, and shopping campaigns.
Matching each auto bidding strategy to the right campaign goal is key to maximizing results and achieving your objectives. The best way to do this is to regularly evaluate and adjust the strategy to ensure it continues to align with your campaign goals and objectives.
The Maximize Clicks strategy sets bids that maximize the number of clicks your ads receive, while keeping costs within a specified budget. It’s the ideal strategy for advertising campaigns that prioritize driving traffic to a website or mobile app.
Another bidding option that’s great for a profit-driven approach is the Fixed Bid strategy. This strategy allows Amazon to preserve ad spend when it believes the probability of sales conversion is low.
This option is also a great choice for accounts managing multiple brands or products across a range of product lines. This approach lets you separate ad spend by portfolio grouping so that changes and analyses can be performed separately for each cluster.
Default bid
Amazon auctions for Sponsored Product and Brand ads on a cost-per-click (CPC) basis. Each advertiser submits a default bid, which determines the maximum amount they are willing to pay for an ad click.
In addition to a starting CPC, an Amazon Bidding campaign includes one of three bidding strategies and the option to adjust your bids by placement. With the option to change your default bid, you can customize your ad campaign to meet your specific advertising goals.
Dynamic up and down bids are another option that allows Amazon to dynamically adjust your bids based on the likelihood of a conversion. For first-page search result placement, Amazon raises your bid by up to 100% if it thinks a click will lead to a conversion, and decreases your bid by up to 50% for other placements.