Types of Amazon Keyword Bidding Strategies

To get the most out of your Amazon PPC campaign budget and achieve a good ACOS, you need a good understanding of keyword bidding. Choosing the right strategy and managing how your budget is spent is critical if you’re to achieve the results you want.

How does Keyword Bidding work?

Amazon deals with thousands of searches every day. They need to determine which product takes the prime spot in the search listing – not an easy task when it’s possible for multiple brands to have equally optimised product listings. So, they use a bidding structure to determine which seller wins the ad space and top-ranking positions for each search.

Sellers bid on specific keywords related to their products and depending on the keyword match type as well as the bid amount, the winner of the top position is chosen. Without knowledge of how the process works, you’ll struggle to meet your goals.

How to win a Keyword bid

The brand who wins a keyword bid only pays 1p more than the total of the second-place bid. So, for example, if your brand bid £3.00 to win the keyword “girls backpacks” and the next highest bid was £2.50, you would only pay £2.51 per click on your ad. The second highest bidder would then take the second spot in the search rankings and so on until all positions are filled.

Types of Amazon Keyword Bidding Strategies

During the Amazon PPC campaign setup process, you will have to select the type of bidding strategy you want to apply to your campaign. Each strategy enables you to manage your campaign using the Amazon algorithm. Here’s a guide to help you decide which strategy is right for you.

  • Dynamic bids (down only) – this dynamic bidding strategy means that Amazon will lower your bids when they deem your ad is less likely to convert. This is a safe bidding option if your budget is tight
  • Dynamic bids (up and down) – Amazon will lower your bid when your ad is less likely to convert and double your set bid when your ad is more likely to convert. This bidding strategy maximises conversions – but at a higher cost
  • Fixed bids – your set bids won’t change whether your ad is more or less likely to convert, giving you greater control over your spend. However, this bidding strategy is much less detailed and can lead to missed opportunities

Contact our advertising experts at Melody now to discuss your Amazon PPC campaign.

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