Amazon PPC Bidding Strategies: Everything You Need to Know
Controlling the management of your Amazon PPC campaigns can be an overwhelming task. With the many ads available and the various options to choose from, it can become difficult to keep track of it all. In addition to all the other things that come along with Amazon FBA, sellers have plenty of work to do. One of the biggest issues for novices who begin the Amazon PPC campaigns is out-of-control spending. To stop this from happening and to spend your money wisely you'll need an effective method of negotiating your campaign's bid.
Automatic vs. Manual Campaigns Before we dive into bid strategies, it's helpful to understand the crucial distinction between automatic vs manual campaigns for Amazon PPC ads. With the auto-campaign setting, Amazon will target keywords and similar products to your ads. Manual campaigns require you to be responsible for: 1. Picking the right keywords/products to bidding on 2. Match Type for the corresponding keyword 3. Bid on the keyword. The standard for choosing between manual or auto campaigns is to consider your current launch cycle for your product.
The earlier you launch your product cycles, the more you should make use of automated campaigns to discover your product. At the end of your launch cycle you should be running more manual campaigns because you are aware of the keywords and ASIN works best for your product. It is not necessary to stop your auto-program. However, you'll want to spend more on your manual campaigns as your ASIN grows mature.
Campaign Bidding Strategy The strategy for bidding on campaigns determines how aggressively strategic you wish your bidding strategy for your campaign to be. There are three possible options. Each one determines the level of bidding intensity. The options for bidding strategies in the campaign include (sort according to bid robustness and then the most aggressive): 1. Dynamic Bid - Up and Down 2. Fix Bid 3. Dynamic Bid - Down Only
Dynamic Bid – Up and Down This option for campaign bidding is possibly the most aggressive option of three. It allows Amazon flexibility to modify your bids to increase by +100 percent or down by 10 percent. For instance, the price you bid on the keyword you want to target is $2.00. In this instance, Amazon can automatically outbid your auction bid the maximum of $4.00 If they think that the probability of a sales conversion to be likely. However they may lower your auction bid to $0.00 in the event that they believe the probability of a conversion is not high. Remember that the 100% increase and decrease is the maximum. Most of the time the bid will not be raised to the maximum of $4 or reduced to the minimum amount of $0. The bid for auctions will probably be somewhere in between. The use of Dynamic Bid up and down strategy is the reason there's a difference in your offer and CPC (cost per click) as it permits Amazon to adjust the bid you've put in. Make use of this strategy only when you're confident with the total budget you have decided to use for this campaign and, also, you are bidding on keywords you feel confident. Another thing to consider in this strategy is that you should only employ the Dynamic Bid the Up and Down strategy for Sponsored Campaigns for Products.
Fixed Bid Like the name implies, Amazon will take your exact bid as well as any manual adjustments you make as part of the fix bid technique. It will not alter your bids depending on the possibility of selling. This strategy is recommended to optimize your campaign by updating your bids on a regular basis. You are aware of what you're doing and you don't wish for Amazon to alter your bids.
Dynamic Bid – Down Only This option for campaign bidding is most likely the most conservative of three.It offers Amazon the flexibility to adjust your effective bids downwards.Amazon can modify your bid downwards as much as 10percent . For instance the bid you place on keywords is $2.00.In this instance, Amazon can automatically downbid your auction bid to $0 when they think the chance of a sales conversion is not high. Utilize this method if you are looking to be cautious and reduce your exposure to auctions that have a small chance of selling. When it comes to Sponsored Brands as well as Sponsored Display it is the standard bid strategy for campaigns. For existing campaigns prior to introduction in the Campaign Bidding Strategy, the "Dynamic bid - Down Only" option is the default choice.
What Is ACoS? Before we decide on your target ACoS It is helpful to understand exactly what ACoS is. ACoS is short for "Advertising Cost of Sale" It is the proportion of your total advertising spending to the total sales revenue. It tells you how much revenue is generated for every dollar you spend on your campaign. The general rule would be that having a smaller ACoS percentage is preferred because you will be able to get more sales for the budget you've made.
What Is My Target ACoS? The target ACoS in principle can be anything you wish to make it. But if you want to benchmark your ACoS. How would you determine if your target ACoS is a good or bad thing? A standard ACoS should be referred to as a breakeven ACoS. The break-even ACoS is calculated by formulating your margins on a per-unit basis. A tool you can use to determine your margins is the FBA Calculator. Utilizing the margins you calculated, you can determine your profit margin percentage. This percentage of profit margin represents your breaking point ACoS.
With the goal ACoS that you have, you can begin optimising the effectiveness of your Amazon PPC bids that is in line with your strategy. You can create the bid to mathematically meet your target ACoS by using the following formula:
New Bid = (Target ACoS/ACoS) * CPC In the formula above, CPC in the formula above is the cost per Click. It is recommended that the CPC number utilized is a range of time that isn't too short or too long. When you update your bids you can change the bid by using Amazon's Amazon advertisement console Amazon ppc bulk operations or Amazon PPC Software in order to change the bid. These options can help you save time when you have to make many bid changes across multiple campaigns.
Conclusion Thinking regarding how you can manage your Amazon PPC bidding strategically is crucial to planning your Amazon PPC journey. Your plan has massive impact on all of your Amazon PPC campaigns. As Amazon FBA sellers we are eager to test things right away However, as I mentioned above, it is crucial to establish a clear plan before you start pressing buttons.