Amazon Bidding Guide 2024: Bidding Basics you need to know

Amazon Bidding Guide 2024: Bidding Basics you need to know

Amazon Advertising show on Amazon and promote particular products in search results and relevant product pages. When a shopper clicks an ad, they are directed to the related product page.

In this article, we will discuss the basics of bidding on your Sponsored ads campaigns. Specifically, we will look at what bids are, how auctions work, and which are the bidding features available for sponsored products.

What is Amazon Sponsored Ads

Sponsored ads are a pay per click advertising and your bid correspond to the maximum amount that you are willing to pay for a click. When shoppers browse Amazon for products, we run real-time auctions to decide which ad, if any, will appear and in which order those ads will show on the page. Ads selected must meet minimum relevance criteria to compete in the auction. Ads that compete in the auction are displayed to shoppers and are ranked based on a combination of the seller's bid and the ad's relevance to the shopping query.

How do Amazon Bidding Auctions work?

Amazon auctions determine which ads to show to shoppers based on a combination of the bid and the ad's relevance to the shopping query. And your bid should be based on the maximum amount that you are willing to pay when a shopper clicks on your ad. The more competitive your bid, the better chance you generally have through your ad display. How much you exactly bid depends on the goal of your campaign. But remember to never bid more than you are willing to pay for a click.

how amazon bids work

Let's imagine we have a customer searching for a video camera 4k professional. And then we have three advertisers who are each bidding on keywords related to that search term. So, the first advertiser is bidding on camera video 4k. The second on camera video, and the third on camera. And they are each bidding different amounts for these keywords. So the first is bidding 75 p. The second is bidding at 60 p. And the third is bidding at 45 p. The first advertiser will win the auction and will win an impression because they bid the highest for their keyword. Please bear in mind that all of these keywords are relevant and related to the customer's shopping query. The first advertiser, who won the auction, will not pay 75 p. each time a client clicks on their ad. They will actually pay 1 p. more than the second-highest bid so in this case, 61 p.

Amazon Sponsored Products Bidding Features

The first step is to set your bids for Amazon sponsored products:

Automatic Targeting Campaign: For an automatic targeting campaign, you can set one default bid or different bids for each targeting group. Close match, lose match, substitute, and complements. We recommend taking the second option and choosing your bids for each targeting group since this gives you more control. You will also be able to refer to the suggested bid per targeted group.

Keyword and product targeting campaigns: For keyword and product targeting campaigns, you can set a different bid for each keyword, product, and category.

Suggested Bid: Remember, suggested bid and bid range can help you get started. They are calculated from a group of recent winning bids for ads that appear such as yours. The bid range is a range of winning bids for ads in your product category. The suggested bid provides you with an estimate of bids that have been use up by other advertisers for products similar to yours. The purpose of this range is to help you get started with advertising. Still, if you have a specific objective in mind, we suggest that you enter a bid that will enable you to meet your strategies, and then you can set your bid based on your campaign performance. Suggested bid and bid range daily update, based on the increase or decrease in competing bids and ads in each auction.

Dynamic Bids: Then, you have the option to either set dynamic or fixed bids. And to set placement bid adjustments. These are two ways for you to have more control over your ad placement in sales opportunities. You should use dynamic bids, up and down, or dynamic bids, down only, and Amazon will adjust your bid in real-time by a maximum of a hundred percent when it is more or less likely to lead to a sale.

Fixed Bids: You can choose fixed bids to use the exact bid that you chose.

Placement Bid Adjustments: For more control over where your ads appear, you can use placement bid adjustments. With these, you can manually add bid adjustments up to nine hundred percent to stay competitive for the top of the search, first page, or productivity page placements. So, let's have a look at the following image and see how you can make these adjustments in your advertising console.

amazon placement options

So, here I am in my Amazon advertising console. And I'm in the campaign dashboard. I'm going to go to a sponsored product keyword targeting PPC campaign. And just show you how you can make adjustments to your bidding strategy. There are a few things you can do at a campaign level, you can go to placements and can adjust bids by placement. So, you could say I'm willing to pay up to 900 percent more for a click on my ad when it appears on top of the search. Or I'm willing to pay up to 900 percent more to click on my ad when it appears on a product detail page. So, you can make these adjustments as you like. And you can increase this, for example. And you should do this depending upon the performance of your campaign in different placements. If you see that your campaign performs really well on top of search or well on productivity pages, you can decide to increase your bids for those placements.

PPC Campaign Settings

You can also go to campaign settings. You can change your bid strategy. So, as we spoke about.

Dynamic bids, down only you: You can do dynamic bids, down only, where Amazon will only adjust your bids down in auctions, where your ad is unlikely to convert to a sale.

Dynamic bids, up and down: Or you can do dynamic bids, up and down, where Amazon can increase your bid in auctions where you are likely to convert to a sale and decrease your bid in auctions where you are unlikely to convert to a sale.

Fixed bids: Or you can choose fixed bids where the ad would be the same amount every single time is up for auction. You can make placement bid adjustments here as well.

Ad Groups: You can also bid at the ad group level. Just remember that targeting is an ad group level. All the keywords that you assign to a specific ad group will only influence that ad group. If you are doing a keyword targeting campaign.

Targeting: If we go to targeting, there we can see all the keywords that are being target in the campaign. Remember, this is a keyword-targeting campaign. If it was a product targeting campaign, we would see all the incidents and categories that is being target. And if it was an automatic campaign, we will see all of the targeting groups that is targeting.

And we can see what we are bidding on for each of these keywords. So, we can manually adjust them here. We can increase our bids for particular keywords. We can decrease our bids for particular keywords. And we could also apply the suggested bid, which we spoke about. And we can have a look at the suggested bid range which can help us if we want to increase or decrease our bids.

So, those are the different ways we can make bids adjustments in your Amazon advertising console.

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Taib Bilal
April 10, 2024
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