Ad rank is always on the top of Amazon sellers minds when it comes to increasing revenue. In Seller Central, you’ve probably seen a feature called Bid+ under the “Campaign Settings” tab. It sounds all fine and dandy, as Amazon says it will increase your bids by 50% if there’s a chance of reaching that top bid spot. It’s not that simple. Before you turn on that feature, read this post to discover what Amazon Bid+ does to your campaigns to decide if it’s right for your account.
In a previous article about AMS Sponsored Product Ads I mentioned Amazon Bid+ was like that bro that acted as if they always had your back, but was actually a selfish hobbit.
I think we all know who I’m talking about.
Bid + is kind of like Frodo. He’s a pretty okay option to hangout with, but can get selfish at times.
This week we talk about Bid+ and Michael gives a final verdict on the Amazon feature in the video below.
But first, lets go through the basics.
What is Amazon bid+?
Bid+ affects your ads at the campaign level, meaning if you have hundreds of keywords in many ad groups for one campaign, Bid+ will change all of those bids. This is where you have to be careful.
Going back to the Frodo comparison, this is where Bid+ becomes greedy and starts to look more like Gollum.
The Purpose of Bid+ is to improve Ad Rank
Sounds good right? Amazon has your back to increase your bid to get you to that top ad spot.
Well, the top ad spot isn’t guaranteed, there’s no reporting to measure the success of Bid+, and Amazon gets paid extra for each click. Remember Amazon PPC stands for pay-per-click, meaning each time an Amazon customer clicks on your ad, you have to pay Amazon for that click. When you increase your bids by 50%, you’re paying extra.
Let’s do some math:
Imagine if your bid was $1 and your ad was clicked on 2,000 times. You would pay $2,000.
If Amazon thought you could reach the top ad spot and started bidding $1.50 on a search term, and your ad gets clicked on 3,000 times, you’re now paying $4,500 without the promise of increasing sales or conversion rate.
Keep in mind this is just for one keyword in a campaign. If you turn Bid+ on for one campaign, it will affect all of keywords in a campaign.
Ad Position Doesn’t Always Equal Profit
Like Michael said in the video, the person in the top ad spot isn’t necessarily the most profitable.
The most frustrating thing about Bid+ is there’s no reporting on what position your ad did best in, why Bid+ made the decisions it did, and how Bid+ affected your revenue.
Being in the top ad spot isn’t the one Amazon feature to rule them all for getting sales and you usually end up spending more money.
Bid+ Has Some Redeeming Factors
Like Frodo, Bid+ isn’t all bad. Brands can still use the feature for good. I just urge them to use caution and fully know about Bid+ before turning it on.
Bid+ is actually a really good way to stay competitive. Say you were being out bid for your brand name or had a product with a really high conversion rate. These are both good scenarios to use Bid+. When you have a product with a really high conversion rate and is destined to get sales, then why not use Bid+? The risk is minimal and your revenue is limitless. The only problem is you just don’t know for sure if it’s going to pay off. Likewise, if a competitor is outbidding you for your brand name, then you want to bid extra to take that top spot when customers search for your brand name.
So Should You Turn Bid+ On?
You should almost never turn Bid+ on. This feature is good in theory, but the best way to safely reach the top spot and avoid wasted spend is raising your target ACoS for an exact match keyword.
Bidding according to your TACoS is the best way to avoid wasted spend and get the most out of your bids. By raising your TACoS, you can try to win the top ad spot not by luck or randomly bidding 50% more, but by calculated bids.
If you’re not using Ad Badger, use our bid calculator to calculate the right bid every time:
Comment if Bid+ Has Worked For You
We try to answer every comment that comes our way. Let us know if Bid+ has worked for you in the past and increased your conversion rate or what steps you took to make Bid+ efficient. Comment what you think Frodo’s redeeming factors are as well!
If you don’t want to learn about Amazon Advertising features because you want everything automatically, check out how Ad Badger manages keyword bids.