Amazon PPC has various facets. From the type of ad you use to the targeting type, you have options to choose from. The Amazon PPC process is like an auction system where advertisers bid on keywords. This brings us to the importance of Amazon bidding as it needs to focus on winning as well as being able to control its ad spending.
In this article, we’re going to discuss the different types of Amazon bidding strategies that sellers use.
Amazon ad campaign targeting types
With Amazon PPC, you have three different types of ads – Sponsored Products, Sponsored Brands, and Sponsored Display ads. For each of these ad types, you have different targeting options – manual and automatic. Manual targeting refers to manually entering a list of keywords that you want your ads to target. You can bid on two levels – keyword and ad group.
There are three different Amazon keyword match types to bid on – broad match, phrase match, and exact match. Manual targeting gives the advertiser more control over his campaigns by allowing bid decreases and the ability to easily assess keyword performance to eliminate underperforming ones.
Automatic targeting is an option that doesn’t allow much human intervention as Amazon takes over your campaigns. Once you enter a list of keywords, the next step is to set your CPC bid and from thereon, Amazon decides which customers to display your ads to.
The match types under automatic targeting vary from those of manual targeting. They are – close matches, loose matches, compliments, and substitutes. Automatic campaigns are extremely beneficial for finding new keywords to target your ads with however they’re not very effective in boosting sales and revenue.
What are the Amazon bidding strategies?
Here are the four different types of Amazon PPC bidding strategies:
1. Dynamic bids (up and down)
In this type of Amazon dynamic bidding, Amazon raises your bid by up to 100% or decreases it up to 100% depending on the likelihood of a conversion. Basically, depending on the chances that your bid is going to generate clicks or not, Amazon lowers or increases the bid value.
2. Dynamic bids (down only)
In this type of bidding, Amazon will only lower your bid value by up to 100% when the chances of conversions (clicks) are extremely low. This type of bidding is more suitable while trying to ensure your ad budget doesn’t get drained as well as for new sellers.
3. Fixed bids
According to this strategy, Amazon will not change your bid depending on the likelihood of a conversion. Whatever default bid you set, that bid stays fixed and you are fully aware at all times of exactly what your bid amount is. This type of bidding is an even safer option when it comes to ensuring your ad budget doesn’t get drained and gives you complete control over your ad budget.
4. Rule-based bidding
This strategy allows sellers to bid according to pre-set rules and conditions. The advertiser has to manually define and set the conditions that when met will trigger the consequent bid and keyword changes. This type of bidding too gives sellers enhanced control over their campaigns as they get to choose what conditions they want to set.
Also read: Taxes For Amazon Sellers – Your Complete Guide!
Amazon bidding by placement techniques
In addition to the bidding strategies discussed above, another way to bid under Amazon advertising is by placement. Amazon has three different types of ad placement options available – Top of Search, Product Pages, and Rest of Search.
- Top of Search placement refers to the placement of Sponsored Product ads right on top of the first page of Amazon SERPs.
- Product Pages refer to the placement of ads on product detail pages.
- The rest of Search refers to the rest of the placements on pages of Amazon search results below Top of Search.
Bids by Placement refers to the process by which you can change your bids depending on where your ad gets displayed. With this option, Amazon can increase your bid by up to 900% for a placement. This bidding feature allows you to set bid multipliers for Sponsored Products which means you can raise your bids by certain amounts to compete for places.
Sellers seeking to optimize the effectiveness of their Amazon advertising strategy are able to change the amount of bids for an advertising targeting location without impacting other ads. All the placements are different in that they have their pros and cons.
In order to view your ad’s performance by placement, what you need to do is open a campaign, and click on the Placements tab for insights into which placements you should be focusing on for your ad campaigns.
Bidding by placement is useful when you’re looking to increase your ROAS, by getting your ads to display in better, more converting positions and removing ads from low-potential positions.
Conclusion
Having a clear understanding of Amazon’s bidding strategies is crucial to effectively controlling your ad budget. If you’re a new seller, the bidding may seem like a daunting task so you need to devote your time to understanding the concepts and familiarizing yourself with how to go about it.
Mistakes with bidding can prove to be costly, help from Amazon PPC Agency would be the best way for you to avoid all unwanted mistakes and get better results. Test different strategies before narrowing down on one that works the best for you.
Also read: A Guide to Owning the Amazon Prime Day Like a Pro
