In January 2019, Amazon introduced a couple new bidding features to help Amazon Sellers maximize the performance of their PPC campaigns. It’s gone pretty under the radar, but it can make a big difference in your campaigns.
You want to base your bids on what things are worth. Would you bid the same amount on every keyword and ad group? Of course not!
So why would sellers bid the same amount for ad placements?
The new adjust bids by placement feature lets you monitor ad performance by placement and make modifications accordingly in order to maximize the return on your advertising.
What is “Adjust Bids by Placement”?
The adjust bids by placement feature allows you to set bid multipliers between 0% and 900% for Sponsored Products. Placements are where your ads may appear across Amazon’s advertising platform.
If you choose to adjust bids by placement, bids will be increased by the specified amounts when your ads compete for opportunities on those placements.
Now that we know what this new feature is, why should you adjust your bids by placement?
It’s simple. Every keyword and ad group are different and should be treated as such. But, each ad placement is also unique, with their own pros and cons.
These are the three locations where you ad can be placed:
- Product pages
To find the performance-by-placement data in your own campaigns, just open any campaign and click on the “Placements” tab. You’ll be taken to a screen that looks like this:
Top of Search
Let’s dig into the best converting, most competitive ad placement: Top-of-Search. When an ad is placed at Top-of-Search, it’s displayed in the first two listings of the Amazon SERP (Search Engine Results Page).
This coveted position also comes with a higher price tag, since best ad rank positions usually go to the highest bidders.
Learn more about How Amazon Ranks Ads.
Adjust bids by placement works together with your selected bidding strategy to determine the final bid price. So you also need to keep your Dynamic Bidding settings in mind.
For example, if you bid $1.00 for a keyword and set a 50% adjustment for “Top of Search,” this is how your bids will be applied for that placement:
- Fixed bids: $1.50
- Dynamic bidding (down only): $0-$1.50
- Dynamic bidding (up and down): $0-$3.00
Product Pages are Sponsored Product placements on the product details page, and all non-search placements such as the add-to-cart page.
For product pages, CTR (Click through rate) can sometimes be 10X worse than Top of Search placements.
This isn’t to say product pages aren’t valuable. A lot of campaigns see more sales from Product Pages than Rest-of-Search placements.
Rest of Search
Rest-of-Search placement refers to the middle and bottom of the first page and anything on pages 2, 3, and 4 on to oblivion.
Your base bid will apply to the “rest of search” placement group.
Amazon will not let you make adjustments to Rest of Search placements, so it can be an effective strategy to determine your bids around the Rest of Search performance and then modify bids for Top of Search and Product Pages.
Hierarchy of Placement
So why do Top-of-Search ads convert at a much higher rate? Part of the answer lies in how Amazon identifies a sponsored product on the SERP.
When an Amazon customer looks at the SERP, Top-of-Search Sponsored Products and organic listings are nearly indistinguishable. Thus, your average customer thinks every product at Top-of-Search is highly rated.
But, there’s also value in Rest-of-Search and Product Page placements. This value can be found in capturing the attention of “grazers.”
Two Types of Amazon Shoppers
There seems to be a behavioral difference between customers who purchase products at Top-of-Search and those who venture into Rest-of-Search.
We’ll call the quick, decisive shoppers who purchase Top-of-Search products “the Hunters.” Meanwhile, the meandering and methodical customers who peruse the Rest-of-Search are “the Grazers.”
How to Use Adjust Bids by Placement
So, how do you actually use this feature?
Let’s say you make a new auto-campaign. You gather some data, everything is looking great.
Now let’s optimize that campaign with adjust bids by placement!
Open your campaign and click on the “Placements” tab near the top.
Let’s assume the Target ACOS (Advertising Cost of Sales) for this campaign is 20%. It’s very possible (if not likely) that once you look at your placement metrics you’ll notice Top-of-Search is performing around 10% ACOS while Product Pages and Rest-of-Search are performing around 30% ACOS.
To meet our Target ACOS of 20% we need to increase Top-of-Search bids and decrease bids for other placements.
The method we suggest is to adjust your overall campaign bid.
We dedicated an entire blog post to calculating the perfect bid, but I’ll summarize it:
Max Bid = RPC (Revenue Per Click) x Target ACOS%
That gives you the ideal bid to reach your target ACOS! For this example, we’ll apply the new bid to our worst performing placement location (say, for example, Rest-of-Search).
To compensate Top-of-Search and Product Page placements, you can use adjust bids by placement to increase these bids to get them back to their target CPC.
How the Bid Increase Modifications Work
The bid modifiers on Amazon placement settings are done with addition, not multiplication. This means entering a 100% bid modification will increase your bid by 100%, essentially doubling it.
There is a built-in bid calculator on Amazon just to double check your bid increases.
Practicing What We Preach
Here’s an example of an account that I recently optimized to hit the target ACOS in each of the three placements.
In the last two weeks of May 2019, Product Page placements were getting 200,000 impressions while Top-of-Search was only getting 12,000 impressions.
Product Page placements also had a 77% ACOS, while Top-of-Search was hitting the target ACOS of 35%.
After doing some calculations, I realized I needed to globally decrease the bids on all keywords by 50%, and then add a 100% increase for Top-of-Search ad placements.
By Mid-June, Top of Search placements soared to 24,000 impressions and revenue doubled, while ACOS for product pages dropped to 33%.
How Often Should You Adjust Bids by Placement?
For smaller accounts, bid modifiers can be adjusted every two weeks. Larger accounts, who want to be on top of things, can adjust their bids by placement twice a week.
The easiest way to manage your placement settings is to keep everything centered around ACOS. If a placement (say Product Pages, for example) has a high ACOS, applying this strategy can optimize your campaign even further.
The Bottom Line
Just because your campaigns are hitting your Target ACOS doesn’t mean they’re fully optimized. You may be missing out on bigger revenue opportunity for better placements, or inefficiently spending money on bad placements.
Monitoring and optimizing your placement settings will get you one-step closer to smashing your goals and crushing the competition.
Best of luck to you, badgers!