How to use Amazon advertising’s dynamic bidding feature

Dynamic bidding is a feature that Amazon introduced early on in 2019 as a replacement for the original Amazon Bid+ modifier that Advertisers could use within the Amazon Advertising platform. Amazon Bid+ was an Amazon Advertising feature that increased your max CPC bid by 50% if Amazon thinks your ad is eligible to show up at the top of the search result. Bid+ was only available with manual campaigns and wouldn’t take you above your budget. With Dynamic bidding, instead of just being able to add a 50% modifier to bids, now you have 3 modifier options:

  • Dynamic – Bid Down Only
    • Basic rules of auction-style for Amazon. If Amazon believes the term that is searched for your item is not relevant, or less likely to convert, it will bid down to the appropriate sponsored position, for a lesser dollar amount.
  • Dynamic – Bid Up and Down
    • As the name implies, this option allows Amazon to raise or lower your bid based on your likelihood of converting. For example, if Amazon believes your ad is more likely to lead to a sale, they might increase your bid to give you better placements. Similarly, if Amazon believes you are less likely to convert a particular click to a sale (because of placement, price, competition, or even the search term), they might lower your bid so you don’t pay as much for the click. While dynamic bidding up and down can be a great tool, it’s not meant to be a replacement for sophisticated auto-bidding technology, as Amazon will only make changes up to $1 up or down.
  • Fixed Bid
    • Amazon will not adjust your bid on the likelihood of conversion.

When to use dynamic bidding on Amazon

A great time to use Dynamic Bidding is when you are trying to win the top placements for keywords within the selected campaign. In search results, it is the first set of products that a potential customer sees. If you place top of search, you are more likely to get clicks and impressions, than being lower down the page. If you are noticing in your placement report that you are not always winning top placement and wasting spend on either product page or “Rest of Search” placements, this is a great opportunity to use this new feature. By lowering your initial bid to a fraction of the cost and adding a bid modifier to the placement you want to win, Amazon cancels out all the other placements (as the bid is low enough not to compete) and focuses more of the spend and bids on the placement you want (as the modifier is on the placement you are targeting). Combining these placements gives you a great chance of getting a sale, taking advantage of the full landscape of what Amazon has to offer. This helps reduce unwanted spend in other placements.

When not to use dynamic bidding on Amazon

We suggest staying away from using modifiers (dynamic bidding and bid by placement) when starting new campaigns. When you do not have the data to support knowing the ideal bid that is needed to capture the search term, you are risking over or underbidding on the search query, resulting in either an unprofitable or unreliable bid. Raw data from simple inputs are better analyzed over adding additional metrics to the pot. Adding a bid modifier on top of a new keyword skews the average CPC data and ultimately the advertising can’t understand what is profitable or what isn’t profitable. Until data is accumulated, and you know how you convert for different search queries or have enough room to explore, then we do not suggest adding modifiers.

What is bid by placement?

Bid by placement is an additional modifier in conjunction with dynamic bidding. With bid by placement, It allows you to dedicate more spend towards better converting placements, segmenting your budget to make the most of it. You can modify your bid by where you would like your Ads to show up.

  • Placement Modifiers:
    • Top of Page: Top of first page placements
    • Product Page: Middle and bottom placements of first page
    • Rest of Search: Rest of the pages (second page on) placements.
  • How much can a placement be modified?
    • Top of Page: up to 900% of the original bid
    • Product Page: up to 900% of the original bid
    • Rest of Search: Cannot be modified.

What campaign types are supported?

  • Sponsored Products
    • Auto Campaigns
    • ASIN Targeting Campaigns
    • Manual Campaigns
  • Sponsored brand ads and product display ads are not currently supported

When to use bid by placement on Amazon

Adjust bids by placement is a relatively new feature that allows you to modify your bids, in real-time, to win specific placements on Amazon. Currently, Amazon categorizes its’ ad inventory into three different sections: top of search results, product pages and rest of search. Through testing, you might notice that your ads convert better when they appear on top of search – this would be an opportunity to use “bidding by placement” and target top of search for those specific products. For example, we often use bidding by placement to help our clients win all positions on the search results page for their specific branded keywords. By creating multiple campaigns with bid modifiers, we can precisely control where each ad shows on site.

Conclusion

Dynamic bidding is a robust replacement to the original Bid(+) modifier. Dynamic bidding gives more control of how and where you place your advertisements, enabling you to be more granular with your PPC strategy. The bid modifier options offered with the feature allow advertisers to strategically place lower end bids and leverage the automatic modifiers to ensure they are receiving the advertising placement their strategy calls for or allowing advertisers the option to bid down on terms that are deemed less valuable to your campaign – saving you money to invest in campaigns with higher conversion rates and helping keep you within your target ACoS goals. In addition to the bid modifiers, the bid by placement feature allows you to leverage the actual placement of your ad and ensure you are winning the placement you are after. With these options being offered to you and being able to customize them to your specific advertising strategy there is no reason not to be leveraging these in your ad campaigns across Amazon when it makes sense. This is a great improvement over the old feature and shows the level of investment that Amazon is making into its advertising platform by offering up these great features to its sellers. The future of Amazon Advertising is bright – be sure you are taking full advantage of all the tools, resources and offerings they are making available to you.


Opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.


 

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