Stop Bidding High to Reach Top of Search Placement on Amazon

Top of Search placements are known for ensuring strong performance metrics, like low ACOS / high ROAS. To reach these very coveted placements, a marketer needs to win with higher bid adjustments. But it’s not the other way around: increasing the bids doesn’t automatically puts you on top of search results. Many marketers wonder how to get to top of Amazon search results.

Indeed, blindly increasing bid modifiers for top placement might not be optimal, as it may saturate already successful keywords and affect your overall campaign performance.

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What are Search Placement Bid Modifiers?

Placement bid modifiers are adjustments made to your keyword bids based on the specific placements or positions where your ads appear on Amazon's search results pages or product detail pages. You may wonder how to get better search results on Amazon. These modifiers allow you to fine-tune your bids for different ad placements to optimize your advertising performance. These adjustments are separate from the dynamic bidding strategy and will help you prioritize or deprioritize certain placements based on their performance.

By utilizing placement bid modifiers, you can increase or decrease your keyword bids for different ad placements, relative to your base bid. The base bid represents the bid you set for a keyword that applies to all placements. With bid modifiers, you can prioritize or deprioritize certain placements based on their performance.

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Types of Search Placements for PPC Bid Modifiers

Here are the main types of ad placements where PPC bid modifiers can be applied:

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Top of Search Placement

This refers to your ad appearing in the top few search results on the first page of Amazon's search results. Top ad is known for having the lowest ACOS (Advertising Cost of Sales) and highest ROAS (Return on Advertising Spend).

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Rest of Search Placement

This placement includes all other search results beyond the top of search placement. It is not possible to set a bid modifier for this placement.

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‍Product Pages Placement

This refers to your ad appearing on specific product detail pages related to your targeted keywords. Placement modifiers are applied at the campaign level, affecting all targeting for all ASINs within the PPC campaign.

Note: Learn more about How does Amazon PPC ads works in our beginner’s guide to PPC ads

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Common Misconception about Top of Search Placement

It is common to observe that the Top of Search placement has the best performance metrics, such as lower ACOS and higher ROAS, in placement stats for a campaign. This leads to a misconception that increasing the top of search placement modifier will further improve the Amazon search ranking by getting more keywords into this placement with excellent statistics.

However, before making any hasty decisions, it's essential to consider the reasons behind the top of search placement's superior performance:

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Keyword Bid Adjustments

When you identify a high-performing keyword (which both generates high clicks and conversions rate), you tend to increase its bid. Consequently, you improve the chances of winning the auction and gaining a higher ad rank. So it's more likely to appear in the top place naturally, without the need for additional bid modifiers. In this scenario, the Top-of-Search placement might not be necessary, which could lead to overpaying and have to distribute less budget across other various keywords.

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Higher Gap between Bid and Actual CPC

Keywords in the top of search placement often have a higher gap between the bid and the actual CPC (Cost Per Click) compared to the rest of search. This can happen because the competition for those top spots can drive up the actual cost you pay for each click. This leads to a lower actual ACOS than the expected ACOS.

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Additional Read: Amazon Bidding Guide 2023: Bidding Basics sellers need to know

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Is Increasing Top of Search Placement always a good Idea?

Based on the factors discussed above, increasing the top of search placement modifier may not be a wise strategy for some main reasons:

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Saturated Top Keywords

It is highly likely that your best-performing keywords are already in the top of search placement. Since these keywords are already performing well, increasing the modifier to target the top placement might not lead to substantial improvements.

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‍Negative Impact on other Keywords

Raising the top of search placement modifier will affect all keywords within the campaign. This means that even keywords that perform better in other placements (such as "Rest of Search") could be pushed into the more competitive top placement. This can lead to these keywords becoming less effective or even irrelevant in the top placement, resulting in potentially lower performance for those keywords.

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Lower Conversion Rates in Other Placements

Not all keywords perform equally well in all placements. Some keywords might have a lower conversion rate when shown at the top of search results, despite the higher bid and better metrics. These keywords might actually perform better when shown in Rest of Search where the competition is lower and the bids are not as high.

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Only One Exact Match Keyword Campaign for Top-of-Search Ads

Even if you consider having a campaign structure with only one Exact match keyword per campaign to push those keywords to top, which would limit the impact of placement modifiers on other keywords, this approach is not recommended due to several drawbacks:

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Budget Constraints

Each campaign must have a minimum budget. With only one keyword per campaign, you may either lose control and distribution of your spend or have to ignore your long-tail keywords, which could be generating around 20% of your sponsored sales.

At the same time, considering your budget is also limited. In order to secure the Top of Search advertising placement, marketers typically tend to increase the bidding on Amazon, subsequently raising the Cost Per Click. Moreover, we've noticed that the Top of Search placement often tends to be much more expensive than the Rest of Search placement. Therefore, for a more efficient optimization of your ads and sales growth, it's crucial to find a global economical approach rather than solely investing heavily in the Top of Search placement.

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Management Complexity

Managing numerous campaigns with such a structure becomes complicated, making analysis and modifications more challenging. This complexity can impair your ability to make informed decisions quickly.

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Additional Read: How to run efficient Amazon PPC campaigns?

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Conclusion

Implementing efficient bid adjustments per placement can be challenging. Instead of endlessly seeking the perfect placement modifier, it is generally better to adjust bids based on overall performance to maintain a clean campaign structure. However, placement modifiers can be valuable for other applications, but that will be the topic of another article.

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