How to Use Amazon DSP Bid Adjustments to Optimize Ad Performance

July 10, 2025
By The Badger

In July 2025, Amazon introduced a significant update to its Demand-Side Platform (DSP), giving advertisers more precise control over how their budgets are spent.

With the new bid adjustment capabilities, marketers can now dynamically adjust bids based on real-time auction signals—such as inventory type, competition levels, or audience engagement. This means better budget allocation, improved visibility, and stronger performance without necessarily increasing spend.

In this blog post, we’ll explore what’s new in Amazon DSP bid adjustments, how these changes work in practice, and why they’re a game-changer for brands looking to scale their advertising efforts on Amazon.

Understanding the New Bid Adjustment Capabilities in Amazon DSP

Amazon’s latest update to its DSP introduces real-time bid adjustments that allow advertisers to fine-tune how aggressively they bid based on multiple auction-level signals.

This change marks a shift from static, one-size-fits-all bidding strategies toward a more dynamic, signal-responsive approach.

The new bid adjustment system gives advertisers the ability to apply percentage-based bid multipliers across several variables, including but not limited to:

Adjust bids based on whether the ad will serve on Amazon-owned properties (such as Twitch or IMDb) versus third-party exchanges.
Bid differently for impressions served on mobile, desktop, or connected TV.
Increase bids for high-intent retargeting audiences or suppress bids for lower-performing in-market segments.
Prioritize above-the-fold placements or video ads that deliver stronger engagement.

These adjustments are applied pre-auction, allowing for more cost-efficient delivery and optimized CPMs, especially when bidding in competitive environments.

For example, a brand may choose to apply a +30% bid adjustment for inventory shown on Amazon’s owned-and-operated properties, which historically deliver stronger ROAS, while applying a -20% adjustment on third-party supply that underperforms.

This granular control helps advertisers tailor their strategy in line with campaign goals, such as reach, efficiency, or performance-based KPIs.

It also improves budget flexibility, letting marketers react to real-time marketplace conditions without restructuring their entire line item strategy.

Strategic Use Cases for Bid Adjustments in Amazon DSP

The introduction of granular bid adjustments within Amazon DSP unlocks new possibilities for advertisers to align bidding strategy with specific campaign goals.

One of the most valuable applications lies in retargeting—brands can now fine-tune their bids to prioritize high-intent audiences, such as users who visited product detail pages or abandoned carts within the last few days.

Another core use case revolves around inventory quality.

Historically, Amazon’s owned-and-operated (O&O) inventory, including placements on platforms like Twitch and IMDb, tends to deliver stronger performance metrics compared to third-party supply sources.

With bid adjustments, advertisers can allocate more budget to these high-performing environments by applying positive modifiers, while simultaneously reducing spend on lower-yield third-party inventory—ensuring more efficient delivery and better return on ad spend.

Device-level bid adjustments also enable smarter delivery across the consumer journey.

For instance, connected TV (CTV) impressions typically lead to stronger engagement and brand recall in upper-funnel campaigns. If performance data supports this, advertisers can adjust bids to reflect the higher value of impressions served on CTV devices without reconfiguring their campaign structure.

Finally, for more advanced strategies, bid adjustments can be layered with time-based and geographic signals.

If a campaign performs best in specific urban regions or during certain times of day, advertisers can now respond dynamically by adjusting bids for those moments and locations—maximizing the relevance and impact of every impression.

Measuring the Impact of Bid Adjustments in DSP Campaigns

To fully leverage Amazon DSP’s bid adjustment capabilities, advertisers must implement a structured approach to performance measurement.

Since bid adjustments influence how aggressively or conservatively a campaign enters auctions, their impact often manifests in subtle but measurable shifts across key performance indicators (KPIs) such as CPM, CTR, vCPM, ROAS, and conversion rate.

The first step is isolating the variables.

When testing new bid adjustments, it’s critical to avoid making simultaneous changes to other parameters like creative, audience targeting, or budget allocation.

Ideally, advertisers should compare adjusted line items against a control group running with default bidding to assess relative performance.

Next comes time-based analysis. Bid adjustments don’t always show immediate results, especially in campaigns with slower conversion cycles or limited daily impressions.

Marketers should evaluate performance over a statistically significant time frame—often two to four weeks—before drawing conclusions. During this period, monitoring trends in cost efficiency, win rates, and downstream engagement helps determine whether bid changes are improving overall campaign quality.

Amazon DSP’s built-in reporting suite allows advertisers to break down delivery by inventory type, device, geography, and placement.

This granularity is essential when evaluating the true value of a bid adjustment.

For example, if a +30% bid modifier was applied to connected TV impressions, advertisers should examine whether the increase led to more qualified views, stronger brand lift, or improved view-through rates.

Moreover, advertisers should keep an eye on pacing and frequency. A more aggressive bid may help win more auctions, but without frequency caps and budget discipline, it could lead to diminishing returns or oversaturation.

That’s why bid adjustments should always be reviewed in conjunction with broader campaign health indicators to ensure sustainable growth.

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Best Practices and Common Pitfalls in Bid Adjustment Strategy

As with any optimization tool, the success of Amazon DSP bid adjustments depends not only on their availability but also on how strategically they’re applied.

While the flexibility to modify bids across inventory, devices, and audiences provides a powerful advantage, it also introduces complexity. Many advertisers fall into the trap of over-adjusting or applying bid modifiers without a clear data-backed rationale.

One of the most important best practices is to ground every adjustment in historical performance data.

Bidding more aggressively on a device type or inventory source simply because it “seems” more valuable can quickly drain budgets without meaningful results.

Instead, advertisers should regularly analyze breakdown reports and base each adjustment on measurable uplift in performance—be it in conversions, viewability, or return on ad spend.

Another effective habit is to test bid adjustments incrementally.

Large bid swings—like jumping from a baseline to +50%—can disrupt campaign delivery and skew results.

It’s more sustainable to introduce moderate adjustments and evaluate their impact over time. This also minimizes the risk of overspending on impressions that may not deliver proportional value.

Equally critical is ensuring alignment between bid adjustments and campaign objectives. A common mistake is applying conversion-focused bid modifiers to awareness campaigns or vice versa.

Each campaign goal—whether reach, engagement, or purchase—requires a tailored bid logic.

For example, maximizing viewability in an upper-funnel initiative might call for higher bids on high-impact placements, while a lower-funnel strategy might favor retargeting segments and suppress broad inventory.

Finally, advertisers should maintain tight control over campaign pacing and budget.

Aggressive bid increases can lead to early budget depletion or frequency saturation, especially in campaigns without proper capping mechanisms.

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Conclusion

Amazon DSP’s enhanced bid adjustment capabilities represent more than just a technical update—they mark a strategic evolution in how advertisers can approach programmatic media buying.

However, with greater control comes the need for greater responsibility.

Bid adjustments are not shortcuts to performance but tools that require ongoing analysis, thoughtful experimentation, and alignment with overall campaign objectives.

When applied strategically and reviewed regularly, these adjustments can significantly improve cost efficiency, increase relevant reach, and drive measurable outcomes across the funnel.

For advertisers ready to move beyond static bidding and embrace dynamic optimization, Amazon DSP’s bid adjustment framework offers the structure and control to scale smarter, not just bigger.