Keyword Bidding Strategies for Amazon Sponsored Products and Brands

Bidding on keywords

Depending on the ad type you've selected, you'll have to make decisions on which targeting methods you'll leverage. If you've chosen to target by keyword, there are strategies for bidding to consider.

Selecting keywords

For both Sponsored Products and Sponsored Brands, you can target keywords as part of your overall strategy.

When entering your own keywords, it’s important to consider how customers shop and discover products. Customers on Amazon may look for the same product using different shopping queries. It’s best to have a range of keywords that are relevant to your products so you can reach relevant shoppers.

There are two categories of keywords: brand and category. Each type performs differently, and it’s important to recognize the pros and cons of each.

Brand keywords

Brand keywords reach customers who are looking for your brand, making it easier for them to find your ad in Amazon search results.

Brand keywords give your products a chance to be highly relevant in the search results and therefore have a higher chance of conversion. They help you reach new shoppers and stay top of mind with your existing audience.

Brand keywords have a disadvantage in that you might see low search volume, which would mean low impressions.

Category keywords

Category keywords reach customers who are looking for general products, making it easier for them to discover your brand’s version of that product in placements within the search results.

With category keywords, you get a larger volume of searches than you do with branded keywords, which means you can increase impressions.

However, category keywords may have a lower efficiency than brand keywords, which may result in higher ACOS and lower ROAS.

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Keyword examples

Let’s take a look at examples that make use of each of the different categories of keywords.

Brand keywords

Solo is a beverage company with a line of energy drinks. In order to appear in front of shoppers who are looking for their specific brand, they bid on keywords like “solo energy drinks” and “solo sports drinks.”

Category keywords

solo wants to appear in front of shoppers who aren’t necessarily looking for a specific brand, but for a general type of product instead. They bid on keywords such as “energy drinks,” “sports drinks,” and “fitness beverages.”

Setting your bids

Once you've chosen keywords, your next step is to set your keyword bids. You may recall that sponsored ads use an auction-based cost-per-click (CPC) inventory-buying model. Ads that compete in the auction are ranked and displayed to shoppers based on a combination of the advertiser's bid and the ad’s relevance to shoppers' shopping queries. The winner of the auction will pay an amount slightly higher than the second highest CPC bid if their ad is clicked.

Setting a bid

When you set your bid, you are choosing the maximum amount you are willing to pay for a click.

Default bid (Sponsored products only)

For Sponsored Products, your default bid applies to all clicks unless you set a different bid for a keyword. This caps the amount you'll be charged when a shopper clicks on your ad after searching the chosen keyword. It's recommended that you set your bid to the maximum amount you're willing to pay for a click. You can always change your bid at a later time.

Suggested Bids

You can either select the suggested bid or set a custom bid. Bid suggestions are calculated using historical auction insights for ads similar to yours and designed to provide the best starting bid for your targeting

Bidding on individual keywords

With manual campaigns, you can set bids on individual keywords. Depending on the keyword and match type, you may have to bid differently. As keywords get more restrictive and competitive, you may have to bid higher on them to see results.

Campaign/ match type

Expect to bid higher as you move from broad to phrase to exact match types

Keyword Type

Expect to bid higher as you go from brand to category keyword types.?

Sponsored Brands bidding strategy

Sponsored Brands has a feature called automated bidding, which allows Amazon to automatically optimize your advertising cost of sales across placements. If you choose automated bidding, you allow Amazon to optimize your bids for other placements that are below top of search placement. The keyword bids you set are applied to the top of search placement, and represent the maximum for other placements. Amazon may then decrease your bids for other placements based on your observed conversion rate for those placements. Automated bidding will never increase your bid.

You can choose to leave automated bidding off and set a custom bid adjustment to decrease or increase your bid for other placements by up to 99%. This adjustment will be set for placements below top of search. For example, a 40% decrease on a $5.00 bid will become $3.00 for placements below top of search.

Sponsored Products offer different bidding strategies that we will review on the next page.

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Bidding strategy in practice

Let's look further at a bidding tactic in practice.

Staggering bids

Staggering bids across keyword and match type is a tactic that can help you refine how much to spend on each. Typically, the more restrictive or competitive the keyword, the higher you might have to bid. Staggering your bids is a good way to start if you’re not sure how high to bid.

Advertiser example

For example, one strategy you might use is to set your bids for automatic campaigns at $0.35. Then, for broad match and brand keywords, set the bids approximately 40 to 50 percent higher than your bid for the automatic campaign—so $0.60.

For phrase match and category keywords, which are even more specific, you could set the bids approximately 20 to 25 percent higher than for your broad/brand keywords, or $0.75.

Finally, for the most specific keywords—exact match—you could set your bids approximately 25 to 35 percent higher than for your phrase/category keywords, or $1.00.

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