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Which Bidding Strategy?

Aug 31, 2022

Hey,

Bidding Strategies is a topic I'm asked about frequently, so today, I thought I'd give you a rundown of what they are, which one to use and when.

First of all, a reminder of the 3 Amazon Ads bidding strategies:

- Dynamic Bids Down Only
- Dynamic Bids Up and Down
- Fixed Bids

Let's dive into each of these a little deeper...

Dynamic Bids Down Only
This option is the safest option if you are more conservative and want a safety net in place with your Amazon Ads spend.

With Dynamic Bids Down Only you are giving Amazon permission to lower your bid when its algorithm deems a click is unlikely to result in a conversion (i.e. an order).

Dynamic Bids Up and Down
This is a bidding strategy I prefer to keep in my back pocket to use on proven and profitable Campaigns.

As the name suggests, Dynamic Bids Up and Down allows Amazon to raise your bids when it thinks a click is likely to result in a conversion.

Or it will lower your bids when it thinks that a conversion is less likely to happen.

With this strategy, your bid can be raised by up to 100%. So, a $1.00 bid could potentially become a $2.00 bid!

This why I prefer to bring this bidding strategy out to play on proven and profitable Campaigns.

Fixed Bids
With Fixed Bids, you are in complete control of your bidding strategy, because you are not allowing Amazon to increase or decrease your bid in any way, shape or form.

When you choose Fixed Bids as your bidding strategy, Amazon won't mess with your bid at all, as is the case with the previous 2 bidding strategies.

So, if you bid $0.72, that will be your bid. If you were to bid $0.72 using Dynamic Bids Down Only, your bid could actually become $0.47, $0.31, $0.03, for example, if Amazon deems a click unlikely to result in a conversion.

Be warned that with Fixed Bids, Amazon is very likely to spend a good chunk of your daily budget for that Campaign, potentially the entire daily budget.

If you're more accustom to Dynamic Bids Down Only, Fixed Bids could be a little out of your comfort zone as you start seeing Amazon spending more money each day.

Those, then, are the 3 bidding strategies. Let's now move onto when to use each of them.

New Campaign/New Book
If you're starting a brand new Campaign for a brand new book, then I recommend using Fixed Bids, purely because Amazon doesn't know how well your book will convert, so is likely to lower your bid by default if you were to use Dynamic Bids Down Only.

Just keep a close eye on your Ad Spend as this is a more aggressive bidding strategy than Dynamic Bids Down Only.

Let your Fixed Bids Campaign run for 7-14 days, then once you have collected some data, change the bidding strategy to Dynamic Bids Down Only.

Or, if this feels too aggressive, start with Dynamic Bids Down Only and if you're not getting much traction (i.e. impressions and clicks) after 7-14 days, switch to Fixed Bids.

An Existing Book
If you've had a book published on Amazon for a few months or even years, that you haven't advertised before, Amazon likely has some data and knowledge of your book.

This is only the case, however, if it has a good sales history. If your book has been ranked in the 100,000's or even 1,000,000's, and you've had very few sales over the past few months, then unfortunately, Amazon may deem your book unlikely to convert. If this is the case for you, I'd recommend starting out with Fixed Bids.

Providing you have some good sales history on your book, however, I would suggest using the Dynamic Bids Down Only bidding strategy to begin with.

Or, as above, switch to Fixed Bids if you're struggling to gain much traction.

If you're not comfortable using Fixed Bids and feel it is too aggressive, then keep your bidding strategy to Dynamic Bids Down Only and just increase your bids and see if that helps get things moving.

Profitable Campaign
Once you have some profitable Campaigns, my advice would be to test Dynamic Bids Up and Down to see if this can help you pick up more traction in terms of Sales and Page Reads.

You will have an idea of how effective this bidding strategy will be after as little as 1-2 days in some cases.

If Dynamic Bids Up and Down destroys your profitability, change it back to your previous bidding strategy and perhaps test it again in 2-3 months time when this Campaign will have even more data.

Dynamic Bids Up and Down, I find, works particularly well with good performing Automatic Targeting campaigns; more so than manual targeting campaigns in a lot of cases.

We got into the weeds a little bit here, but hopefully you now have a better understanding of the 3 different Amazon Ads bidding strategies and when to use each of them.

To Your Success
- Matt

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