There is no doubting Amazon’s appeal. One of the largest online marketplaces and a significant player in the e-commerce industry is Amazon. Competition is fierce with more than 300 million customers worldwide, 2.3 billion sellers on the site, and more than 100 new advertisements every day. Numerous companies compete constantly for consumers’ attention. Advertisers want to come out on top—or at the very least, hold the best position—in the competition to be effective sellers. The secret? Amazon bidding will put you on top and separate you from your largest rivals using a combination of efficient techniques to boost sales.
Sellers should have a thorough understanding of how bidding functions and the many bidding alternatives accessible to them if they want to win big and stay relevant in the Amazon industry. The perfect combination of conditions and methods can work wonders for your campaigns by quickly increasing the traffic of your rivals.
Whether you are a seasoned seller or a newcomer, this article will undoubtedly allay your concerns regarding Amazon’s bidding tactics and provide you a clear knowledge of how these features can be used to your advantage.
Suggested Bid
The Amazon Sponsored Product suggested bid gives us an approximation of the bids used by other advertisers for ad items similar to ours. If we have a specific business goal in mind, Amazon suggests that we place a bid that will allow us to accomplish that goal and then alter it depending on campaign results.
The proposed bid and bid range are derived from a sample of recent winning bids for advertisements similar to ours, with the bid range consisting of winning bids for the majority of advertising in our product category. These are updated daily depending on changes in rival bids and advertisements in each auction.
Default Bid
The Amazon Sponsored Product default bid is the highest cost-per-click (CPC) we are ready to pay when someone clicks an ad from a specified ad group for both manual and automatic targeting. We should never bid more for a click than we are willing to spend. Unless we have established a customized bid for a particular term in this ad group, the maximum default bid will apply to all clicks when using manual targeting.
Maximum Bid
Setting a custom cost-per-click bid is optional; we can use the ad group’s maximum default price or build one for individual keywords inside that ad group. The Sponsored Product maximum bid is the highest cost-per-click that we are willing to pay when someone clicks on an ad from the ad group while using automated targeting. The highest bid can be changed at any moment.
Placement Bids previously known as Bid+
Amazon’s Bid+ function has been replaced with the “adjust bids by placement” option. Previously, we could only specify a 50% boost for top of search (first page) placement using Bid+. We can set a 0% to 900% increase for both the top of search (first page) and product detail placements using the “adjust bids by placement” function. It is advisable to optimize placement bids based on the campaign’s success on a certain placement type.
How can we calculate the optimal bid?
Bidding on Amazon is fundamentally simple. Keyword bidding is a science with several well-established rules. Simpler equation for calculating bids:
Bid = Max. CPC = Avg. Order Value x ACOS Target x Conversion Rate
And it be can be simplified as follows:
Bid = Max. CPC = (Ad Sales / Ad Clicks) x (Ad Spend / Ad Sales)
This “streamlined” equation is based upon which “advanced bidding algorithms” are created. There are more underlying assumptions and factors that may be incorporated to build even more robust and intricate advertising, but the preceding equations will offer appropriate metrics to measure the spend. We at SalesDuo employ a variety of techniques that are tailored to each individual customer.
Endnote
Your Amazon campaign advertising efforts’ success or failure will be greatly influenced by Amazon bidding. No matter how much target marketing research you do, it’s still difficult to fully understand what customers want and why. You may still build successful campaigns to ultimately accomplish your company goals if you have a thorough understanding of how Amazon bidding operates. Amazon’s algorithm does an excellent job of assessing and predicting performance.
SalesDuo, known as a prominent Amazon agency, provides a comprehensive solution for managing every facet of the eCommerce landscape. This approach allows retail brands of all scales to zero in on their core priorities, while we assist them in establishing, overseeing, and expanding their operations across diverse marketplaces and regions. For additional insights, visit salesduo.com.
