How to run a successful Amazon PPC campaign bidding strategy
Updated: Feb 14, 2022
When Amazon Sellers are looking to drive sales, one of the options available to them is running a campaign bidding strategy.
Amazon makes it fairly straight forward to do this - you are paying them for the privilege so it’s in their interests - but it can also be highly beneficial to your business if done correctly.
Thompson and Holt managing partner Craig Gedey picks out the key factors to be aware of when considering if this is an option that would help you drive sales on Amazon.
What are Amazon campaign bidding strategies?
Thompson and Holt’s Craig Gedey: “In Amazon campaign bidding strategies, you bid on a specific keyword that will potentially see your product appear prominently when a buyer’s searches for that word. For example a customer searches ‘hairbrushes’ and sees your product appear in the search result ad positions or other ad positions, depending on which type you target, and based on your bid for that keyword.”
What is the aim of campaign bidding strategies?
Thompson and Holt’s Craig Gedey: “Ultimately you one to be in position number one for your keyword - that will generate the most sales. But anywhere between positions two and four is considered being ‘top of search’ and valuable for your product. Whether you win the keyword or not depends on a combination of your bid, the relevance of your product, and the quality of your product listing.”
How can I win the keyword?
Thompson and Holt’s Craig Gedey: “When you are creating sponsored product ads, you can adjust the type of bidding strategy you want to apply. This is broken down into ‘fixed’, ’dynamic down only’ and ‘dynamic bids up and down’, and they allow Amazon to help manage your campaign using their algorithm in real-time. Spend time reading up on each kind of bid before deciding which would be best for your business.”
What’s the difference between the three kinds of bids?
Thompson and Holt’s Craig Gedey: “Dynamic bids, down only, are probably the safest of the three, and therefore more suited to new Amazon Sellers or those on a budget. Amazon will lower your bid - up to 100 percent - if your ad is less likely to covert into sales. This option is good for a profit-driven strategy and protects your advertising spend if converting to sale is unlikely.
“Dynamic bids up and down allow Amazon to raise your bid - again up to 100 percent - if they think you chances of conversion is high. If it isn’t, they will decrease your bid. This is more of a risk but can pay off with increased sales. It also offers you the option for a ‘second bid auction’, where you opt to pay £0.01 above the next highest bidder. If you do choose this option, keep an eye on your budget and be prepared to spend double than your starting bid.
“Fixed bids don’t change on the likelihood of conversion, are more straight forward to understand and allows you to maintain full control over your budgets. This is a good approach if you are naturally cautious about spending on advertising, although you can lose out by missing out on the fee going down if you’re not selling.”
Keep your bidding focused
Thompson and Holt’s Craig Gedey: “Only bid on keywords relevant to your product. Amazon’s first priority is always the customer, and they don’t want to show irrelevant products to the users because you’ve chosen poorly. Relevant keywords are the perfect selling tools so it’s important to get this right. And constantly review your bidding strategy and its impact on revenues - Amazon’s sales teams will be keen to recommend several options to you, but choose the ones that are working consistently for you. If you feel your bidding strategy isn’t working then reduce your spending on it or pause it altogether until you can do further research feel more comfortable with the systems.
“Amazon’s teams can be very helpful though - and it’s worth reading through some of their information on this subject here: https://advertising.amazon.com/en-gb/library/guides/dynamic-bidding-sponsored-products.”
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