Understanding Amazon's Dynamic Bid Settings

Amazon’s Dynamic Bidding system is a key feature for optimizing PPC campaigns, but choosing the right bidding strategy can be tricky. At Sellozo, we recommend using the 'Dynamic Bid Down Only' setting to avoid the unpredictability that comes with the 'Up/Down' option. In this post, we'll explore the different Dynamic Bid settings and why 'Dynamic Bid Down Only' helps Amazon sellers maximize their ad spend efficiency.

What Are Amazon's Dynamic Bid Settings?Amazon offers three bidding options within its Dynamic Bid settings:

1. Dynamic Bidding – Down Only: Amazon automatically lowers your bid when it predicts a sale is less likely, helping to conserve your budget on less likely conversions.

2. Dynamic Bidding – Up and Down: Amazon adjusts your bid up or down based on the likelihood of a sale. This setting can increase your bid by up to 100% for top-of-search placements or 50% for other placements.

3. Fixed Bidding: No dynamic adjustments are made. You set your bids manually, and Amazon doesn’t change them based on predicted performance.

   
   
   
   

Why We Recommend 'Dynamic Bid Down Only'

While Amazon’s Dynamic Bidding – Up and Down can provide more flexibility, it also brings a higher level of unpredictability. Here's why we suggest sticking with 'Dynamic Bid Down Only':

• Preventing Bid Increases: With Up/Down bidding, Amazon has the ability to increase your bid by as much as 100% (for top-of-search placements) or 50% (for other placements). This can cause your CPC to skyrocket unexpectedly, especially if Amazon’s predictions are off or if competition increases.

• Risk of Budget Drain: If your campaign is in a competitive environment or Amazon aggressively favors top-of-search impressions, your cost-per-click can rise far beyond what you expected. This means your budget can be drained faster without guaranteeing conversions.

• Inconsistent Performance: If Top of Search impressions become less effective (e.g., conversions drop), the combination of high bids and the dynamic bid adjustments can result in a rapid decline in ROAS and ACoS, harming your overall campaign performance.

Top of Search Placements: A Word of Caution

Aside from Dynamic Bid settings, it’s crucial to keep an eye on Top of Search placements, especially when using higher placement multipliers. Here’s what can go wrong:

1. Cost Spikes: If competition increases or Amazon boosts the visibility of top-of-search placements, CPCs can rise rapidly, surpassing your expectations.

2. Budget Drain: High placement multipliers can quickly burn through your daily budget, especially in automatic campaigns where control over specific search terms is limited.

3. Performance Swings: If Top of Search traffic suddenly stops converting well, you risk spending significant budget on expensive clicks with low ROI, drastically impacting your ACoS and ROAS.

   
   
   
   

Where to Find Dynamic Bid Settings in Sellozo

In the Sellozo platform, you can easily manage your Dynamic Bidding settings within the Campaign Studio. When setting up or optimizing campaigns, simply choose the 'Dynamic Bid Down Only' option for your campaigns to ensure more predictable, efficient ad spend.

Key Takeaways

• For Predictability: ‘Dynamic Bid Down Only’ minimizes the risk of unexpected bid increases.

• To Control Costs: Reduces the chance of burning through your budget on top-of-search placements with unpredictable CPC spikes.

• For Steady Performance: This option helps stabilize performance and protects your ROAS from sudden swings due to higher bids or non-converting traffic.

By using the right Dynamic Bid settings, you can better control your Amazon PPC campaign outcomes. We recommend 'Dynamic Bid Down Only' to keep costs in check and ensure that your budget is spent efficiently. If you're ready to optimize your campaigns, try out this setting on Sellozo and watch your performance improve.

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