What are Amazon’s New Sponsored Products Bid Optimization Features?

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Sponsored Products Bid Optimization

Sponsored Products bid optimization is a new feature of Amazon advertising that allows dynamic adjustments powered by artificial intelligence. Cautiously yet in the standard bold Amazon fashion, this new feature was rolled out earlier this month to all campaigns.

What’s New

The goal of Sponsored Products bid optimization is to give sellers more options through greater control of targeting, bidding, and ad placement to improve campaign performance. Furthermore, with greater insight into campaign performance, sellers can better see where their ads are actually appearing and what impact each one has.
Sponsored Products bid optimization is a new feature of Amazon advertising that allows dynamic adjustments powered by artificial intelligence. Cautiously yet in the standard bold Amazon fashion, this new feature was rolled out earlier this month to all campaigns.

What’s New

The goal of Sponsored Products bid optimization is to give sellers more options through greater control of targeting, bidding, and ad placement to improve campaign performance. Furthermore, with greater insight into campaign performance, sellers can better see where their ads are actually appearing and what impact each one has.

Manual Targeting

Manual campaigns can target by ASIN or product category. Ads can also be refined so that they are set to appear in Amazon search results and product detail pages only under certain conditions. Filtering by brand, price, and star rating, for instance, gives sellers greater control over the relevancy of impressions.

Automatic Targeting

Automatic campaigns still appear based on keywords and products, but can be adjusted at the keyword and product level. This control optimizes ad goals though toggling defaults and adjusting bids based on ACOS data.

Ad Placement

Additional options for Sponsored Products bid optimization give you more control over when your ads appear. You can set bid multipliers from 0% to 900% for top of search and product page placements to better compete.

Bidding Strategies

The changes to Sponsored Products bid optimization basically center around two options:  fixed bids and dynamic bids. Here’s what they mean:

Fixed Bids

With this option, Amazon keeps to your set bid and you make adjustments manually so you can continue to manage your own bids. It’s also a good strategy to maintain if your goal is product awareness and not conversions.

Dynamic Bids

Dynamic bidding allows you to maximize bid efficiency through AI-powered bidding strategies. Automated bid adjustments based off your set bid happen in real time based on the likelihood of a conversion. The idea is to save you ad spend and lower your ACoS without you having to constantly monitor and adjust your bids.

The targeting can be further set to bid up and down or down only. This allows Amazon to go higher or lower than your set bid, or only lower if a conversion is not expected. Up and down bidding is capped at 100% of your set bid for top of search placements and at 50% for product pages and other placements.

Note that all Sponsored Products campaigns are automatically converted to the down only option, so you might want to look into your campaigns and make adjustments.

So what’s so great about dynamic bidding?

The new Sponsored Products bid optimization features are called dynamic bidding because they automatically adjust based on data that indicates a likely conversion. The machine learning technology that has gone into this feature allows your campaigns to use aggregated customer data to apply tweaks.

Sellers are not privy to customer data, so even if you can’t know the details, your campaigns can now make use of them. And ultimately, you can also gain more informed insight into shopping behavior by analyzing the resulting patterns.

The new reporting features of Sponsored Products bid optimization include data on placements for top of search, product pages and rest of search. It’s available to you to apply to the new Bid+ – Adjust Bids by Placement – and Dynamic Bidding campaign options.

Using Sponsored Products Bid Optimization

Dynamic bidding is a great option for sellers who are less involved in or less adept at advertising. It’s actually an ironic but effective way of relinquishing control to gain more control over campaigns to improve their performance.

By allowing Amazon to adjust your bids for you – limited by the parameters you set – you effectively control how much leeway you want to have for your bids, but without actually having to keep adjusting. You let Amazon do the tedious work, relying on their ample stores of customer data, and just spend a few minutes no and again to monitor campaign performance and do some A/B testing on your parameters.

Completely Automated

You can start with your current campaigns or create new automatic targeting campaigns using the dynamic bidding options to see for yourself how they impact your conversions and ad spend. Amazon can then find relevant keywords and ASINs for your product and manage your bids automatically.

Manipulate Placement

You can also opt to influence impressions on top of search results by using the bid multiplier feature on your manual campaigns. Select the range that suits you then leave the timing to Amazon. Or, you can wait a bit, analyze the results, then readjust your bids based on which placements you’ve identified as the best performing ones for each campaign.

Product Targeting

Use whole product categories themselves (or subcategories) to target instead of enduring months of painstaking keyword research to cover all your bases. Then refine your targeting with the options for brand, price, and rating. This applies to manual campaigns.

Final Thoughts

The new Sponsored Products bid optimization features are all based on the data that Amazon has collected over the years. This means that how well it will work for your products depends on how accurate the data they have collected for similar products is, which depends in the first place on how much data they have been able to gather. If your category doesn’t sell well, you may not get the stellar results that a product in another category can.

As with all advertising strategies, you need to test, tweak and iterate to find out for sure if it works for your products. Let your ads run for a while to collect enough data to analyze, then make adjustments.

As a whole, you’ll want to test with smaller budgets – 10% to 30% at the most, depending on how big you are.

And remember your goals – if you’re going for impressions (brand awareness), dynamic bidding isn’t the right move.

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Julia Valdez

Julia Valdez

Julia is a professional teacher and long-time lover of the art of words on paper and the stage. She has an entrepreneurial heart and spends most of her time doing marketing and management, freelance content writing, volunteer work, and sharing lots of laughs over little crazy things.

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