The Complete Guide to Amazon Keyword Bidding Strategies

Amazon bidding is a constantly changing thing and keeping up with the latest CPC and PPC trends can be a genuinely straining task. If you’re looking for an expert guide on the brand-new system that Amazon has introduced, you’ve come to the right place.

These changes entail the addition of the new options cataloged under campaign bidding strategies and adjustment of bids by placement. The two options might seem confusing at first glance, but they’re only put in place to improve user experience, reduce the stress for retailers, and further streamline the platform overall.

New bidding options bring new opportunities to the table, allowing sellers on Amazon to outperform their competition in new and exciting ways. It also introduces a new way to market all your products on Amazon.

We’re going to have an open discussion about keyword bidding on Amazon, and we’re going to do our best to educate you on everything there is to know about the bidding, the new additions, and how to best use them within your Amazon marketing arsenal.

Dynamic bidding on keywords is a bidding strategy, where Amazon automatically adjusts your bid according to the chance of a sale. Now, that means that if the possibility of a transaction with a better keyword is higher ─ Amazon is dynamically going to bid on your behalf.

That comes with three different settings, which you can pick to allow Amazon to convert the bid.

With down only bidding, Amazon is not as likely to convert – the chances are reduced by up to one hundred percent. When the search queries are unlikely to convert and result in sales, the Amazon system will automatically bid to zero.

Up and down bidding is like Down bidding but works both ways. Amazon is going to raise your bid up to 100% if the keywords are likely to result in the first few products on the first page of the search result ─ and bid up to 50% if the keyword puts your product on all places.

Fixed bidding is going to make Amazon use your default bid, utterly unrelated to the quality of the keyword and the possible conversion rate.

Current campaigns are automatically updated to this very new system, and all are preset to up and down bidding by
default. Up and down bidding, also known as Dynamic Bidding, is the standard preset for all existing campaigns, which
you can shift in the options if you want.

Dynamic bidding doesn’t currently function on sponsored brand advertisements and display ads. The campaign types that
are fully supported by this revolutionary new system are:

• Automated Campaigns
• ASIN Targeted Campaigns
• Manual Campaigns
• Sponsored Products

Bidding by conversion is the likelihood in which the Amazon system is going to bid on a keyword.

Retailers on Amazon in the past have had to research thoroughly in a myriad of different aspects and topics to determine the full value of keywords ─ and their possible translation into conversion rates.

This process has been automated by Amazon, which holds all the research information. Amazon itself has accumulated all this information and processed it within a much shorter timespan than a human operator. The product itself plays a significant role in conversion rates and keyword bidding, and Amazon holds a monopoly on this as well. That is precisely why all this data is further processed to assess possible conversion rates and the value of designated keywords. When all this data is accumulated and processed, it can be segregated into three different categories, all of which play a vital role in the keyword bidding process.

The consumer data is the data that is gathered on the potential customer based on your sales, products, and past customer data. It entails the time that the user browses your product, their previous purchases, and their purchasing habits.

The product category data is the information that rests in the category of the product. That entails competitive products, purchasing habits, people who purchase products in the division, the uniqueness of your product, among many other things. It’s used to determine more about the user behind the category and their demographics.

When it comes to the product data itself, the process is a little more complicated. It considers all the niches in which the product resides, the performance of the specific product within different placements, and the history of the product itself. It entails the historical performance of the advertisement similar ads and their collective performance based on queries.

Amazon Cost per Click ( CPC ) and Pay Per Click ( PPC ) advertisements aren’t the simplest thing in the world as mentioned above, but with the introduction of the new “Bids By Placement” feature, the Amazon PPC strategy implementation is further simplified.

This new feature is bound to significantly cut down on the effort required to run a profitable and successful PPC strategy, by allowing Amazon themselves to manipulate your bid when a great opportunity arises automatically.

For example, if you’re looking to get placed at the top of the first page of Amazon or in the product pages section, Amazon will (with your approval, of course) automatically increase your bid, augmenting your chances of landing a better profit. That will significantly improve your conversion rates, all while increasing brand awareness, ROI, and profitability.

Amazon will automatically add, subtract, and modify SP placements as needed. This placement is divided into three different sections, which are the top of the search page, the best spot for product pages, and the less grandiose, the rest of the search category, respectively.

Placements for product pages and top of the search options are automatically capped at a 900% eventual bid rate, which you can modify to your liking, if you choose the option, of course. It means that if your initial bid ranges from 100%-1000% in fluidity, significantly increasing your chances of getting the bid.

This range is only applied in this case, as up and down, dynamic bidding is going to cap at 100% for the top page and product page, while shifting to fifty percent when it comes to the “rest of the search category. “ You don’t have to worry, though, as getting your product on the first page of Amazon in itself is a great achievement. Products in the first page are bound to get bought more and result in many more conversions.

Managing these new systems is only simplified by using abundant management applications. Amazon has a pretty nifty tool itself, allowing you to completely modify anything and everything you want about your strategy, all through a simple, slick, GUI dashboard.

An Amazon bid range is the range mentioned above, where Amazon determines how much you’re willing to bid on a position or placement of your product. It’s the critical addition that is put into your marketing strategy, but this poses a problem — the placement modifiers that are included within the newest Amazon system and their relation to the bid range.

The placement modifiers are the top as mentioned earlier of the page, product page, and rest of the search query. Understanding this begs the question of how Amazon determines your bidding strategies and proposes equal placement modifiers. The answer to this question is relatively simple. Every single product, marketing strategy, and auction is entirely fluid. Amazon will always have a unique approach to your product, all of which rests on a preset that you have set for the strategy.

When you’ve determined the preset, you’re going to see Amazon calculating your placement modifier based on your needs. The bid range is determined by the bidding factors, which are down, dynamic, and fixed, depending again on your preset. But this begs yet another question. How do you calculate which is the possible bid on a placement modifier? Well, these are done through a simple equation, depending on the placement modifier.

When the equation concerns the top of the search bid, you will need to calculate with the following function. For the simplicity of the equation, we’re going to say that 10 is the 100% amount.

1. $10 + ($10 *900%) = $10 + $90 = $100

This first equation is going to determine your placement before the top of the search, to get the actual results, you will have to take the result of the past calculation, and add 100$ to it.

2. $100 + ($100 *100%) = $100 + $100 = $200

When product pages bids are concerned, the equation is pretty similar to the previous, with a couple of minor adjustments. The full equation is as follows:

1. $10 + ($10 *400%) = $10 + $40 = $50

2. $50 + ($50 *50%) = $50 + $25 = $75

When it comes to the Rest of the Page bids, there are no equations to take into account. The Rest of the Page bids are preset and are in no way going to be edited, manipulated, or modified by Amazon. They’re going to bid your placement, utterly unrelated to any occasion, opportunity, or conversion chance.

If you’re looking to maximize your ROI, conversions, and profits, you will need to employ a marketing strategy and tactic to do so. It will require some keen insider knowledge on the topic, which we are going to be covering in this section.

While every strategy might rest on a similar idea, every single one varies significantly from each other. It is because every single product on Amazon is a unique one, no matter how similar the product itself is to any one of the competitors’ products.

Resellers and vendors on Amazon might have the same product selection in the eyes of the consumer, but in the eyes of Amazon, they’re two very different things. In short, there are no two products on amazon which are directly mirrored.

Since every product rests within a particular category and has distinct features behind it, your approach should follow suit. Amazon has optimized this whole strategic approach to keywords, keyword bidding, and further marketing strategies, but nothing is going to compare to a human researcher.

Using the keyword bidding strategy is going to maximize the return on your product. If you want to market your product correctly, you’ll need to employ the use of up and down bidding.

We’ve discussed what up and down bidding is, and how dynamic bidding works mathematically, but what does it require to work correctly. Well, the first thing that every single product needs is some data behind it.

This is best done if you fill out all the sections on the product itself. By properly setting up your product, you’re effectively giving it a marketing opportunity. The more data that Amazon has on your product ─ the more likely it is to place it in front of your eventual consumers.

The only purpose of dynamic bidding is to use it when the situation calls for it. There are several occasions where using this method of bidding has many benefits compared to fixed bids and down bids only. You should use dynamic bidding on your product if:

• You’re looking to get the top placement keywords
• Your strategic budget can handle the campaign
• It has sales potential
• You’ve established your product
• Amazon has enough details to market it

If a campaign is faulty in itself, not even an advertisement is going to save it. Dynamic bidding might be a relatively complex thing – it’s far from a magic spell. You will still need to put in as much, if not even more effort than you used to.

If you’re looking to place on the top of the search results for your query, you can rest assured that you’re going to get more sales, a better ROI, and significantly bigger conversion rates. But if your product is fundamentally lacking in other things, it’s not going to perform very well.

That is why testing your product before you put in the marketing effort is essential. When you’re testing this new feature out, you should lower your initial bid to a fraction of the cost. It will ensure that even if the product doesn’t perform as well as you thought, Amazon can’t maximize the failure by significantly increasing your bid.

Taking the whole process and slowing it down is going to minimize overflow spending, and is going to focus all your money on the wanted effect.

Dynamic bidding doesn’t truly make sense if you do not fulfill any of the precautions above. If you’re looking to start
a brand new campaign for a brand new product, you’re not going to benefit much as the item itself doesn’t fulfill the
prerequisites to be a marketable item – it’s as simple as that.

You should do your best to stay away from dynamic bidding if:

• Your product is brand new
• You’re new to bidding, bidding modifiers, and Amazon in general
• It’s a poorly established product
• The strategy and marketing campaign in itself is new
• The data associated with the product is insufficient

The data itself is one of the most significant factors that go into the advertisement campaigns and strategies. If
you’re looking for your new marketing effort to result in a lot of ROI, the changes you have to make to your product
should be evident.

Changing the description and ultimately optimizing your product is going to infuse it with as much data as possible,
allowing the dynamic bidding method to result in a fruitful endeavor. If the information itself is not evident, you’re
not going to benefit much from it. Conversion rates are only estimated as the product itself has some full backing
behind it. This backing entails:

• A detailed product description
• A product history
• Purchase history of the product
• Porper images
• Amazon guidelines sufficing

Amazon is continually working on improving its internal advertisement dynamics and is actively changing the way the platform operates daily. With the introduction of the brand-new bidding system, it’s going to provide a myriad of benefits.

Dynamic bidding is actively changing the ecosystem of amazon keyword bidding strategies and marketing. It’s a valuable replacement for the old system, allowing you, the seller, to modify your PPC strategy with much more finesse, ultimately resulting in lower costs, better ROI, and better conversion rates.