How to Use Adjust Bids by Placement on Amazon PPC (2023 Update)

adjust bids by placement amazon ppc

In early 2019, Amazon rolled out some fresh bidding features aimed at empowering Amazon Sellers to optimize their PPC campaigns for better results. Surprisingly, these features have largely remained under the radar, but they hold significant potential to enhance your campaign outcomes.

Think about it– when it comes to keywords and ad groups, you wouldn’t bid the same amount for each one, right? Well, the same principle applies to ad placements.

Enter the “adjust bids by placement” feature. This nifty tool allows you to closely track your ad performance based on placement and make precise adjustments to ensure you’re getting the most bang for your advertising buck. In a world where every click counts, these features can be your secret weapon for continued Amazon PPC success.

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    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:

    • Top-of-Search Placement
    • Product Pages Placement
    • Rest-of-search Placement

    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:

    adjust bids by placement amazon ppc example
    Notice any difference in performance?

    Top of Search Placement

    Let’s dive into the pinnacle of ad placements – the top-of-search. This is where the magic happens, where your ad shines brightest amidst fierce competition.

    When your ad secures a top-of-search spot, it takes the prime real estate at the very top of the Amazon SERP (Search Engine Results Page), occupying those coveted first two listings. It’s the ultimate stage for capturing your audience’s attention and driving conversions like never before.

    adjust bids by placement amazon ppc top of search
    Started from the bottom, now we're here.

    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
    Top-of-Search placements have incredible value. In addition to having better conversion rates, over 67% of clicks on Amazon go to products that are on the first row of the SERP.

    Product Pages Placement

    Product Pages represent an intriguing facet of Sponsored Product placements, strategically positioned on the product details page and other non-search placements, including the pivotal add-to-cart page.

    However, it’s essential to note that the Click-Through Rate (CTR) for Product Pages can occasionally lag far behind the soaring rates seen in Top of Search placements, sometimes even by a factor of ten.

    But don’t let that discourage you-– Product Pages wield unique value in the advertising landscape. Many campaigns find themselves reaping more sales from these pages than from their Rest-of-Search counterparts, making them a potent force in your advertising arsenal.

    adjust bids by placement amazon ppc product pages

    Rest of Search Placement

    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.

    adjust bids by placement amazon ppc rest of search
    Started from the bottom, and we're still here.

    New: Rest of Search Placement Update (2023)

    Amazon has a new update on the Rest of Search placement, and we’re excited! With this update, you now have more control over your ad placements. Ever had Rest of Search performing like a champ, but couldn’t give it the boost it deserved? Well, those days are gone.

    Previously, you could only change placement percentages on Top of Search and Product Page placements. With the new update, you can change the placement percentages on Rest of Search placements. 

    It begs the question of why Amazon waited so long to give us the Rest of Search bid modifiers. If we were to speculate, it could be because Rest of Search covers a vast area it’s everything that is not the top row of Sponsored Products. So, maybe they had to work out some technical challenges to make that happen.

    What Should I Consider Around Amazon's Rest of Search Placement Update Algorithms?

    Amazon’s algorithm doesn’t operate in a purely mathematical way. Now that it’s possible to do placement modifiers on all three placements– top of search placement, rest of search placement, and product page placement– you’d think it’d be possible to set your keyword bid to the lowest-performing placement and then boost the top two. 

    It wouldn’t work. 

    You might not even enter the auction if you were to set the keyword bid to the lowest say, ten cents. Even if you were the only person bidding on a crazy keyword that no one else is bidding on, you still can’t bid super low. It’s like there is an unofficial minimum bid amount you have to place to enter the auction.

    While you might think about setting your keyword bid super low for the lowest-performing placement and boosting the top two, Amazon doesn’t quite play along with that idea. Even if you’re bidding on a niche keyword, there’s a minimum bid requirement to enter the auction. 

    To sum it up, when using placement modifiers, remember to strike the right balance between bid adjustments and staying competitive.

    Should I Segment Campaigns Based on Placements?

    Mixing placement modifiers isn’t a smart play because the three placements behave differently. You can have three campaigns, each targeting a specific placement. You want shoppers to see your ads on each placement:  top of search placement, rest of search placement, and product page placement. 

    Even if they don’t click on your ad, it plants a seed in their mind so that next time they see your ad on another placement, like Top of Search, it’ll be more memorable, and they’ll be more likely to click on it.

    Is There A 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.”

    Who Are The Two Types of Amazon Shoppers?

    Let’s explore a fascinating divergence in customer behavior between those who make purchases at Top-of-Search and those who navigate the terrain of Rest-of-Search.

    Meet “the Hunters”– they’re the swift and decisive shoppers, always on the prowl for products at Top-of-Search.

    On the flip side, we have “the Grazers” – these are the deliberate and methodical customers who prefer to leisurely browse through the offerings in the Rest-of-Search.

    Two distinct tribes with unique shopping styles, both offering intriguing insights into the world of e-commerce.

    How Do I Best 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%

    Now, here’s the golden ticket to hit your target ACOS right on the mark! To illustrate this, let’s put it into action by applying the optimized bid to our underperforming placement, such as Rest-of-Search.

    But what about those Top-of-Search and Product Page placements? Fear not, you can employ the nifty “adjust bids by placement” feature to rev up those bids and steer them back toward your desired CPC, ensuring a well-balanced and effective campaign strategy.

    How Do 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.

    Do We Practice What We Preach at Ad Badger?

    Here’s an illustrative example from a 2019 experiment, demonstrating how effective bid optimization can still hold true in today’s advertising landscape:

    In the final two weeks of May 2019, Product Page placements were racking up an impressive 200,000 impressions, while Top-of-Search lagged behind with only 12,000 impressions.

    However, the catch was that Product Page placements were sporting a hefty 77% ACOS, whereas Top-of-Search had managed to hit the coveted target ACOS of 35%.

    After crunching the numbers, it became evident that a strategic move was in order. The solution? A global reduction of keyword bids by 50%, coupled with a robust 100% increase specifically tailored for Top-of-Search ad placements.

    By mid-June, the results were nothing short of remarkable. Top-of-Search placements surged to 24,000 impressions, and revenue saw a remarkable doubling, all while ACOS for Product Pages gracefully dropped to an encouraging 33%. This case from 2019 serves as a timeless testament to the power of calculated bid adjustments in the world of Amazon advertising.

    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.

    What's 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!