How to Use the Different Amazon Ads Bidding Strategies and When to Do So

How to Use the Different Amazon Ads Bidding Strategies and When to Do So

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When it comes to the various campaign types now offered by Amazon Ads, Sponsored Product ads almost always account for the majority of ad-generated purchases. Additionally, there are more options for customizing and enhancing a campaign's spending with sponsored product adverts. Depending on your current business objectives, a Sponsored Product ad campaign may target keywords, categories, rival brands, and ASINs.

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Dynamic bids - down only, dynamic bids - up and down, fixed bids, and rule-based bidding are the categories of bidding strategies currently accessible for Sponsored Products. We'll explain each one's purpose as well as when and why to use it.

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For Sponsored Product ads, you are bidding for your products to appear at the top of customer search results, the rest of the search, and on product detail pages.

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Dynamic Bids Versus Fixed Bids

Fixed bids are exactly what they sound like; you choose the price per click that you're ready to pay, and Amazon Ads won't alter it in any way. On the other side, dynamic bids give the Amazon system the ability to adjust your bid amount, up or down, in order to win a bid auction where it thinks you have a better chance of converting.

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In each ad campaign, you have the option of changing your bidding approach as your business and marketing objectives evolve and your advertising get more experienced.

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Fixed Bids

If one of your business goals is to increase impressions rather than necessarily conversions or sales, the fixed bidding method is fantastic. This is viewed as a means of budget control by certain advertising. Amazon cannot change your bid to win an auction, after all. This implies that you will have to manually adjust your bids each time it is necessary if your keywords or ad targets are spending ineffectively or not at all.

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In this sense, the fixed bidding approach is undoubtedly one method of cost management, but it requires regular management and is not designed to increase conversions and sales. When your brand or product is fresh on Amazon and you want to increase impressions and acquire search data, fixed bids are more suitable. For the launch of new brands or products, it is not the only bidding approach employed. Instead, we advise employing the dynamic bids-down only technique. Since a fixed bid cannot adjust in reaction to live auctions, it is more likely to overpay for a click.

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We advise returning to new campaigns after two weeks if you decide to adopt a fixed bidding strategy. The campaign will have produced enough recent data by this time for analysis and insight. The next step is to transition to a dynamic bidding technique, which is more suited for a campaign that has just begun to develop.

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Dynamic Bids – Down Only

For developing and establishing campaigns, the dynamic bids-down only technique is beneficial. If Amazon determines that your ad is showing on a customer search query that is less likely to result in a page view or a sale when this technique is activated, Amazon will lower your bid price. Your bid won't be raised by Amazon.

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When your business and marketing objectives are to control or protect your ad spend, boost ad spend efficiency, and concentrate on ad profitability, we advise using this bidding method. Prior to Amazon introducing several bidding techniques, advertising by default used the down-only strategy. Prior to 2019, if you have Sponsored Product campaigns in your Amazon Advertising account, the "down only" bidding strategy will appear in your campaign settings unless you change it.

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By using dynamic bidding-down just, you can manage your spending and concentrate on profitability without continually monitoring and managing your advertising as you would with set bids. Your bids will be modified in real-time by Amazon. You can acquire information on new campaigns using the down-only technique with less danger of overspending on a bid.

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Dynamic Bids – Up and Down

When your ad is more or less likely to result in a sale, Amazon can raise or lower your bids by using the dynamic bidding-up and down method. If you are worried that using this bidding approach would result in you spending too much money, bear in mind that Amazon will only raise your bids for top-of-search rankings by up to 100% and for other placements by up to 50%.

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For instance, if you set your price to $0.50 per click, Amazon will not raise the bid for a top-of-search placement by more than $1.00. If, after at least two weeks, you find that the ad is not achieving your desired sales or efficiency goals, you can always change your bidding strategy to down only.

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For new advertising, we do not advise employing this bidding technique. The up and down method works better with more sophisticated, well-optimized ads and products where you're prepared to boost total sales in order to activate Amazon's flywheel.

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The up and down dynamic bidding method works well when increasing sales is your goal. Your product listing will rank better in organic search as you make more sales on Amazon.

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When deciding if this strategy is appropriate for you, it's also crucial to consider how unpredictable your bids have historically been for your category.

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Rule-Based Bidding

Rule-based bidding is, as of this writing, the newest tactic offered by Amazon Ads. You cannot utilize rule-based bidding on brand-new advertising since there are some conditions that must be met in order to use it on a campaign. Only campaigns that have been running for at least 30 days, at least 30 conversions, and at least a $10 daily budget are eligible for rule-based bidding.

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Amazon will make this option greyed out and prevent you from selecting it in your campaign settings if you attempt to use rule-based bidding on a campaign that does not adhere to the aforementioned requirements.

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When you want to achieve a specific return on advertising (RoAS) goal for your brand and particular products, this technique can be helpful. When your campaign is approved, you can either select your own RoAS guardrail or use Amazon's recommendation, which will appear in the input field.

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The guardrail that Amazon suggests is based on advertisements that are comparable to yours in terms of structure and performance. If you choose your own objective or guardrail, we advise selecting one that is higher than your typical 30-day RoAS but not by more than 20–25% at once. This enables you to keep an eye on expenses and evaluate progressive performance. This guardrail is changeable at any time. If you increase your RoAS objective above 20 to 25 percent of your 30-day average, your spending may become irregular.

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The good news is that Amazon will disable the rule and restore the ad to your prior bidding strategy if your ad does not hit the predetermined breakpoint over a 21-day period (excluding special days like Black Friday/Cyber Monday or Prime Day). Therefore, it's crucial to remember the date you enabled rule-based bidding so you can double-check in 21 days to see if it's still in effect and decide whether to update the campaign. To validate when the change was made and, in some situations, when it was reversed, you can always check the History page inside your campaign.

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You can use any of these bidding techniques, including fixed bidding, dynamic bidding, and rule-based bidding, to accomplish your brand and product objectives. It's crucial to continually assess which strategies make the most sense to put into action in order to get and maintain your Amazon business on the path to success as the Amazon ecosystem grows and markets change.

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Good luck!

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·????????Jansher Khan

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