How to Adjust Bids By Placement of Amazon Ads

Adjust Bids Based On AD Placement On Amazon to optimize your ad spend effectively. Amazon PPC ads offer multiple placements—top of search results, other search placements, and product detail pages—each with different conversion rates, CTR, and CPC.

By adjusting bids in real-time based on conversion likelihood, you can maximize your ROI. For example, top-of-search placements often yield higher conversions compared to other placements.

Learn how to strategically raise or lower your bids and leverage Amazon’s tools to enhance your ad performance. Read on to master these techniques and boost your campaign's success.

Understanding Ad Placement Performance

Optimizing Amazon PPC campaigns requires understanding how different ad placements perform. This knowledge allows for strategic bid adjustments to maximize ROI.

The Performance Gap Between Ad Placements

Ad placement performance can vary significantly across different locations on Amazon. For instance, Amazon ads placed at the top of the search results page often outperform those in other placements such as the rest of the search results or product detail pages. This discrepancy, known as the performance gap, highlights the importance of strategic bid adjustments to maximize return on investment (ROI).

Analyzing Ad Placement Data

To effectively adjust bids by placement, it's crucial to analyze ad placement data. The following image illustrates the actual performance data, showcasing the gap between different ad placements. By examining metrics such as conversion rates, click-through rates (CTR), impressions, and cost-per-click (CPC), sellers can gain insights into which placements are delivering the best results.

Identifying High-Performing Placements

Sellers need to identify which placements yield the highest conversion rates. Typically, ads at the top of the search results page are the most effective. Knowing this, sellers can prioritize their budget towards these high-performing placements to enhance overall campaign performance. Implementing a dynamic bidding strategy can further refine this approach.

Example Data Analysis

For example, a detailed analysis might reveal that top-of-search placements have a conversion rate of 10%, while other placements show significantly lower rates. By focusing on these high-performing placements and adjusting bids accordingly, sellers can ensure that their ad spend is directed towards the most profitable opportunities. This bid strategy is essential for optimizing Amazon advertising and achieving better results.

How To Adjust Bids By Placement of Amazon Ads

Learning how to adjust bids by placement is key to getting the most out of your Amazon ads. This guide will show you how to set the best bids for different ad placements.

AD Placement Performance Gap

The following image is the actual data, which shows the performance gap between AD placements:

Sellers need to know which placement gives you the highest conversion rate (usually the top of the search results page).

As you can see from the chart above, the AD on the search results page is significantly better, with a conversion rate of 13.51%, which is higher than the other two placements at 2.95% and 1.39%.

Looking at other data, the majority of AD spending went to placements with the worst conversion rate and the highest CPC and ACOS. The product detail page’s AD cost $ 200, but the conversion rate was only 1.39%; the search results page has a higher conversion rate, while only spending $32.

That’s what sellers have to solve: allocate AD spending to better-performing placements by adjusting bids.

Formula for Bid Adjustment

For example, let's assume the conversion rate of each AD placement, such as:

• The conversion rate for the top of the search results page is 10%
  The conversion rate for the rest of the search results page is 5%
  The conversion rate for the product detailed page is 7%

(The formula for calculating the conversion rate is simple: orders/clicks)

Formula for Raising Bids

For example, if you want to increase the bid for the placement with a high conversion rate, please calculate the performance gap between AD placements. The calculation method is as follows:

High conversion rate/lowest conversion rate -1

Then according to the data just assumed, the conversion rate for the top of the search results page is 10%, 10%/5%-1=1(100%).

A 100% performance gap means that the advertising effect of the former is twice that of the latter. It is recommended that the AD bid for the top of the search results page can be increased by $1.

Bid adjustment range for product detailed page placements is 7% /5%-1=0.4 (40%)

Then the bid for the product detailed page will be raised to $0.4.

Formula for Lowering Bids

If you want to reduce your AD bids for poorly performing placements, the formula is as follows:

1/(1+ bid increase range for the highest conversion rate placement)

For example, we need to adjust bids for the rest of the search results page.

The highest conversion rate is 10% for the top of the search results page, and its bid increase is 1. Therefore, the bid reduction in other AD placements is 1/(1 + 1) = 0.5.

Note: The above calculation formula is only for the bid adjustment of the same keyword in different placements. The only way to calculate the bid adjustment range for different keywords is to divide them into separate campaigns. That's how to shift your AD spending from underperforming to best performing.‍‍

Related article: A good strategy for Calculating Your Default Bid

Performance Metrics

Key performance metrics are essential for making informed bid adjustments:

• ACOS (Advertising Cost of Sales): This metric indicates the percentage of sales spent on advertising. A lower ACOS means higher profitability.
• CPC (Cost-Per-Click): This metric shows the average cost you pay for each click on your ad. Monitoring CPC helps manage your budget effectively.
• CTR (Click-Through Rate): This metric measures the ratio of clicks to impressions. A higher CTR indicates that your ad is compelling to viewers.

Interpreting these metrics can help you refine your bidding strategies. For example, a high ACOS might suggest the need for lower bids or better keyword targeting, while a low CTR could indicate that your ad copy or targeting needs improvement.

Also read our guide: Amazon TACoS: A Key Metric for Sellers

Dynamic Bidding Strategies

Dynamic bidding on Amazon adjusts your bids in real-time based on the likelihood of a click converting to a sale. There are three types of dynamic bidding strategies: "Dynamic Bids - Up and Down," "Dynamic Bids - Down Only," and "Fixed Bids."

• Dynamic Bids - Up and Down: Amazon increases your bid for clicks that are more likely to convert and decreases it for clicks that are less likely to convert. This strategy is beneficial in competitive markets where conversion rates can fluctuate.
• Dynamic Bids - Down Only: Amazon decreases your bid for clicks that are less likely to convert but do not increase it. This strategy is useful for maintaining control over your budget while still optimizing for conversions.
• Fixed Bids: Your bid amount remains constant regardless of the likelihood of conversion. This strategy can be useful in stable markets or when you have a fixed budget.

Using dynamic bids can help maximize conversions and improve the efficiency of your ad spend compared to fixed bids, especially in dynamic market conditions.

Placement-Specific Strategies

When managing Amazon Ads, different types of ads and their placements require specific bid adjustments to optimize performance. Different placement groups can have varying performance metrics due to their locations on the page:

Sponsored Product Campaigns

• Top-of-Search Placement: Ads here typically have higher visibility and CTR but also higher CPC. Increasing your bid for this placement can capture high-intent shoppers. For example, if your base bid is $1.00, increase it by 50% to $1.50.
• Rest of Search Placement: This placement bid includes ads that appear in the middle or bottom of search results. While they may have lower visibility and CTR compared to top-of-search, they often come at a lower CPC. Adjusting your bid to optimize for cost-effectiveness can help maintain a balanced budget. A 20% decrease from a $1.00 base bid results in $0.80.
• Product Pages: Ads on product detail pages can capture shoppers who are already interested in similar products. These placements can be effective for cross-selling or upselling. Adjusting your bid based on the performance metrics of these placements can help maximize conversions. Maintain or slightly increase bids; for example, keep a $1.00 bid the same if performing well.

Sponsored Brands

• Top of Search Placement: Given their placements at the top, adjusting your bid higher for Sponsored Brands ads in top-of-search placements can significantly boost visibility. For instance, increase a $1.00 base bid by 60%, resulting in $1.60.
• Rest of Search Placement: While less prominent, these placements can still contribute to brand visibility at a lower cost. Lower bids to balance cost; a 15% decrease from $1.00 results in $0.85.

Sponsored Display Ads

• Product Pages: Since these ads appear on product detail pages, adjusting your bid upwards can help capture high-intent shoppers. For example, if your base bid is $1.00, increase it by 30% to $1.30.

Common Bidding Mistakes and How to Avoid Them

Adjusting bids by placement can be complex, and advertisers often make common mistakes:

• Overbidding: Setting bids too high for top-of-search placements without considering the return on investment can lead to overspending. Monitor your ACOS and adjust your bids to ensure profitability.
• Underbidding: Conversely, setting bids too low for high-performing placements can result in missed opportunities. Balance your bids to capture valuable clicks without overspending.
• Ignoring Metrics: Failing to regularly review performance metrics like ACOS, CPC, and CTR can lead to inefficient bidding strategies. Regularly analyze these metrics to make informed adjustments.
• Lack of Automation: Relying solely on manual adjustments can be time-consuming and less effective. Utilize dynamic bidding strategies and third-party PPC management tools to automate and optimize your bids.

Frequently Asked Questions

What is "adjust bids by placement" on Amazon?

Adjust bid by placement on Amazon allows advertisers to modify their bids based on where their ads appear, such as the top of search results, rest of search, or product pages.

This feature helps optimize ad spend by increasing bids for high-performing placements and decreasing them for less effective ones, thereby maximizing return on investment (ROI). For instance, you might set a higher bid for top-of-search placements if they convert to a sale more frequently than rest of search placements.

How do I change my bid on Amazon ads?

To change your bid on Amazon ads, go to your campaign settings in the Amazon Advertising dashboard. Select the campaign you want to adjust, click on the "Placements" tab, and then enter your desired bid adjustments for top of search, rest of search, or product pages.

You can increase or decrease your base bid by a specific percentage to better align with your campaign goals. For example, you might increase your bid by 20% for top-of-search placements to capture more high-value impressions.

What is rule-based bidding Amazon?

Rule-based bidding on Amazon allows advertisers to set automated rules that adjust bids based on specific criteria, such as time of day, day of the week, or performance metrics like conversion rates and cost-per-click (CPC).

This approach helps streamline the bidding process, ensuring that bids are adjusted dynamically to optimize ad performance without manual intervention. For example, you could set rules to increase your bid during peak shopping hours or decrease your bid for placements that are less likely to convert to a sale.

What is the placement multiplier on Amazon?

The placement multiplier on Amazon is a feature that lets advertisers increase their bids by a certain percentage for specific ad placements, such as top of search or product pages.

For example, if you set a 50% placement multiplier for top-of-search placements, your bid will be increased by 50% when your ad is eligible for that placement, helping to capture more high-value impressions. This adjustment ensures that your ads are more competitive in high-performing placements.

What is the default bid in Amazon advertising?

The default bid in Amazon advertising is the initial amount you are willing to pay per click for your ad. This bid applies to all placements unless you specify different bid adjustments for individual placements. Setting an appropriate default bid is crucial for controlling your ad spend and ensuring your ads remain competitive in auctions.

For example, if your default bid is $1.00, this amount will be your base bid across all placements unless you adjust your bid for specific placements like top-of-search or product pages. Adjusting your default bid can help you better manage your budget and maximize conversions from all placements.