Different Amazon Advertising Bidding Strategies: A Simple Guide
If you’ve found yourself staring at your Amazon ad campaign settings, wondering what on earth all these bidding options mean, you’re not alone. For many sellers, bidding strategies can feel like an overwhelming maze of choices. But here’s the good news - choosing the right strategy doesn’t need to be complicated.
Bidding is a critical component of your ad campaigns, directly influencing costs and performance. By understanding the basics and exploring which option aligns with your goals, you can strategically maximise your ad spend. This guide cuts through the noise, offering clear insights to help you pick the best approach.
Understanding the Basics of Amazon Bidding
At its core, Amazon advertising works like an auction. Each time a shopper searches for something, advertisers compete to have their ad displayed. Your bid represents the maximum amount you’re willing to pay for a click. But here’s the catch - the winning aspect isn’t just about how much you’re willing to spend; it’s also about the ad’s relevance and likelihood to convert.
Choosing the right bidding strategy ensures that you’re not only competitive but also spending your budget efficiently. Getting it right can make the difference between a campaign that turns clicks into profits and one that’s just, well, clicks.
Manual Bidding
Manual bidding is exactly what it sounds like - you set your bids for specific keywords or placements, giving you full control over where your budget goes.
Pros
Offers maximum control over spend.
Allows granular adjustments for bids, optimising for high-performing keywords.
Useful for specific, goal-driven campaigns.
Cons
Time-consuming to monitor and adjust.
Requires expertise and familiarity with performance data.
When it Works Best
Manual bidding is ideal for experienced sellers with a good understanding of their campaign goals. If you’re launching a targeted campaign with specific keywords or want to closely monitor and optimise your bids, this method is your go-to.
Automatic Bidding (Letting Amazon take the wheel – partially)
Automatic bidding simplifies the process by letting Amazon make bid adjustments for you. Within this strategy, you can choose from three types of bidding options based on your goals.
Dynamic Bids – Down Only
Amazon lowers your bid in real-time if a click is less likely to convert.
Best for: Reducing wasted spend on low-value traffic.
Pitfall: You might miss out on clicks that could still result in sales.
Dynamic Bids – Up and Down
Amazon raises or lowers your bids in real time based on the likelihood of conversions.
Best for: Capturing valuable traffic while optimising your budget.
Pitfall: Can make budgeting tricky due to fluctuating bids.
Fixed Bids
Your set bid amount remains unchanged, regardless of Amazon’s predictions.
Best for: Total control over costs.
Pitfall: May miss optimisation opportunities for high-performing traffic.
Pros
Simplifies the bidding process, perfect for beginners.
Saves time on bid adjustments.
Cons
Sacrifices some control over spend.
Can result in wasted budget without careful monitoring.
When it Works Best
Automatic bidding shines in new campaigns, particularly when testing keywords or if you lack the time and expertise to manage bids manually.
Rule-Based Bidding (Automating with precision)
Rule-based bidding offers a middle ground between manual and automatic strategies. You set predetermined rules to adjust your bids based on specific performance metrics, such as click-through rate (CTR), sales, or ad spend.
Pros
Combines automation with control.
Enables data-driven bid adjustments.
Cons
Requires initial setup and monitoring.
Can be complex if rules are not clearly defined.
When it Works Best
Rule-based bidding suits experienced sellers managing multiple campaigns or keywords. It’s particularly effective for scaling campaigns while maintaining precise control over performance.
Choosing the Right Bidding Strategy for Your Goals
Not sure where to begin? Here are some guiding questions to help you choose the best bidding strategy for your situation:
What is your campaign objective? Brand awareness, profitability, or conversions?
How much time can you dedicate to bid management? Manual bids require hands-on attention, while automatic options save time.
How comfortable are you with campaign metrics? Rule-based bidding favours sellers with strong data analysis skills.
What’s your risk tolerance? Dynamic bids - up and down, for instance, can stretch your budget, while fixed bids protect it.
Quick Comparison Table
Combining Bidding Strategies (A Smarter Approach)
Why stick to just one strategy? Often, the best results come from blending different approaches. For instance, you might use automatic bidding for broad campaigns focused on keyword research, then switch to manual bidding for highly targeted initiatives. Rule-based bidding can be layered in to maintain precision as your campaigns scale.
Experiment with combinations to find the balance that works for your goals, data availability, and time constraints.
For sellers looking to really do things correctly, and also maintain profitability, a combined approach is the only way to go. As a general rule of thumb, start with some auto campaigns to help identify high performing keywords, then move those manual campaigns and set up negative targeting in the original auto-campaign so you’re not double bidding (people often forget this step!)
To help you along, you can also consider using tools like Teikametrics, which uses A.I. to optimise your bids throughout the day to maximise your budgets. It has, what we believe to be, one of the most effective bidders on the market.
Let’s Recap
Choosing the right Amazon bidding strategy is less about picking the “perfect” option and more about aligning your strategy with your specific campaigns and goals. Start with your priorities in mind, test the options, and adjust as you gather insights from performance data.
Remember, the key to success lies in flexibility. Whether you prefer manual precision, the ease of automation, or the structure of rule-based setups, the most important thing is to keep refining your approach.
Got questions? Follow This Way Up for more actionable advice and catch to our weekly Podcast.