The Bid+ Conundrum
Bid+ is a common conundrum for Amazon sellers. In this episode of The PPC Den Podcast we discuss how Amazon offers to increase your bid by 50% if it feels like your ad will reach the top spot, without going over your daily budget.
That’s so nice of Amazon. What could go wrong?
- 0:00 Introduction with Mike
- 0:57 What is Bid+?
- 1:12 Where is Bid+?
- 1:31 What does Bid+ do?
- 2:45 Is Bid+ worth it?
- 3:18 Should you be using Bid+?
- 4:10 What are ad rank and ad quality?
- 4:34 Example of ad rank and ad quality
- 5:41 Why most people avoid using Bid+
- 6:45 Rare occasions to use Bid+ and client example
- 8:23 Closing
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If you missed them, you should check out our previous episodes of The PPC Den Podcast:
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- The Bid+ Conundrum
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What’s the big deal about bid+?
This campaign feature will increase the bids of your keywords, which is why it doesn’t exist in Auto Campaigns, because there are no keywords in Automatic Sponsored Product Campaigns. There are only keywords in Manual Sponsored Product campaigns and Sponsored Brand Ads, but in terms of Bid+, we’re only talking about Manual Sponsored Product campaigns.
Essentially, what Bid+ will do is it will increase bids 50% if it thinks you will get in a top spot.
Example: If you’re running Sponsored Products in a Manual Campaign and you’re bidding on a mason jar and you’re currently only showing up in the bottom of the page, perhaps. If Amazon thinks by increasing the bid 50%, you will end up on the top spot, it will do so. That is what Bid+ means.
So, if you’re bidding a dollar, and if it thinks that at $1.50 you might appear in the top spot, it will increase the bids up to $1.50.
Now, that is why it does it, and really the why’s actually a little bit debatable…
Is it even worth it for you to increase your bids 50% to get into a top position for everything?
That’s a big point of contention when you’re using Bid+, is that it’s not just going to put it on your best converting keywords, it’s not just going to put it on your branded terms, it’s going to put it on everything inside of that Manual Campaign.
This is not a keyword setting, so you can’t apply it to just one keyword. It’s also not an ad group setting, so you can’t apply it just to one ad group. It is a campaign level setting, which will impact every product, every keyword inside that Manual Sponsored Product campaign.
Should you use it? This is a big maybe
Essentially, what it’s doing is it’s increasing your bid to improve your ad rank. On Amazon, it’s very important to understand. All this is a concept borrowed from Google Ads, which is why optimizing Google Ads campaigns is so valuable when optimizing Amazon advertising because you know a lot of the terminology.
Essentially, ad rank is a component of two big features. It’s your bid, which is what Bid+ changes, and then it’s sort of your quality score or your ad quality.
On Amazon, it doesn’t have a specific name. On Google, it’s called Quality Score. On Facebook, it’s called Relevance Score. On Amazon, it’s called nothing because they haven’t given it a name. We like to refer to it as sort of the ad rank and then the ad quality. Essentially, what ad quality is it’s your expected clicked through rate, it’s your expected conversion rate, it’s your expected revenue per click. It’s all of the organic factors that we think of when we think about products ranking organically. It’s the paid version of these.
Here’s a whole post on Amazon SEO.
Example: Essentially, let’s take two advertisers. If advertiser one is selling mason jars and advertiser two is also selling mason jars, and we’re both bidding the exact same dollar, who’s going to appear first even without considering Bid+? Who’s going to appear first if all things are equal? Well, it’s the person who’s going to appear first is the one with the higher ad quality, the one with the higher click-through rate, the one with the higher conversion rate, the one with the higher revenue per click, the one with the higher BSR. All of these things are influencing this person’s ad quality.
If I’m the second place advertiser, is it worth it for me to maybe turn on Bid+ and maybe get ahead? Yeah, probably. The higher position I am, the more clicks I’m going to get, the more conversions I’m going to get, the more sales I’m going to get. Then, maybe my ad quality will increase and surpass my advertiser. That is one conceptual benefit of running Bid+.
In general, I avoid Bid+. In general, a lot of the Amazon professionals I know avoid Bid+ only under certain circumstances.
Why do most people avoid it?
Well, most people aren’t bidding based off position. Most people are bidding based off of target ad cost over sales.
So, they’re bidding based off their target KPI, when most Amazon seller’s target KPIs are going to be ACoS, and that’s it. If we’re currently at our target ACoS, we want to make sure we maintain that bid. We don’t want to turn Bid+ on and increase our cost per click too much, and then maybe blow past our ACoS. If we are way over our ACoS, having Bid+ on will make it harder to get to where we need to be. We need to lower our bids a little bit to reduce our cost per click and get our ACoS where we need it.
Bid+ Will Increase Your ACoS
In general, most people aren’t optimizing for position, most people are primarily optimizing for target ACoS, which is why turning this feature on actually will probably lead to an ACoS increase because your clicks can potentially rise 50%, what brings us to the off chances, the rare circumstances where I actually do turn on Bid+.
Example: We actually had a client just this month (it’s the middle of October right now) and we had a client in the beginning of October say, “Hey my ACoS is actually too low. We were sitting at about a 19% Acos,” and they want it to go all the way up to about a 25, 27% ACoS … all the way up to 30 for some certain product groups.
Of course, the reasons why this wanted this were to really just feel their organic sales. They wanted to improve everything. They wanted to just increase total top line revenue. They were profitable at the low teens, and they were also profitable in the 20’s. So, they wanted to push it. They wanted more value, more clicks, more sales, all those good things. So, we were looking at some of our campaigns and we were doing bid optimization. In addition, we had so much room to grow on some of these campaigns where we were sitting at a eight or nine percent ACoS, and we had the room to increase bids so much and get more aggressive, and show up more often that we did actually turn on Bid+. That account is doing better than it ever has.
So when do you turn bid+ on?
Long-term, will we continue to keep this on? Probably not. We use it has a short-term boost.
Other rare circumstances where you might use it: Maybe you have a competitor campaign or maybe you have a branded campaign. For things that you always want to appear really, really high and really, really aggressively for. Maybe you might turn it on to just always be sure that you’re trying to stay a little bit ahead of the competition. Maybe you still do your bid optimization for your target ACoS, but then you always want the little extra boost just in case you wanted to get ahead.
Talk to us about your bid+ experience
That is it for this discussion of Bid+.
Do you use Bid+? I would love to hear more, but in general, you can head over to adbadger.com/podcast for all of our episodes. We also have an Amazon PPC membership course which you should definitely check out. We have lots of discussions on when you should use Bid+ when it’s working, when it’s not working, what kinds of campaigns, and I will see you inside the Badger Den.