Amazon PPC bidding is the process of telling Amazon how much you’re willing to pay to get your ads in front of potential customers. If done correctly, it boosts your impressions, clicks, and, ultimately sales, all without overspending.
However, bidding on Amazon is more than just setting a price; factors such as keyword relevance, campaign types, and bid strategies affect how you perform in the ad auction. In this guide, we’ll walk you through everything you need to know to set profitable Amazon bids.
How the Amazon PPC Auction Works
Amazon uses an auction system to determine which ads get shown and where, as multiple sellers compete to show up for the same search terms.
While the highest bidder usually wins the top placement, the relevance of your ad to the shopper’s search query also influences whether your ads are shown or not. Relevance is measured by how often shoppers click your ad and how many of those clicks lead to sales.
Ads with lower bids or lower relevance will either be pushed to the bottom of the first page or other pages, or they may not be shown at all.
Bids vs. CPC: Understanding the Difference
One counterintuitive part of PPC bidding is that the bid you put in is rarely the same as the price you pay when someone clicks on your ad (your CPC).
This difference exists because Amazon uses a second-price auction model. This means that although the highest bidder wins, they don’t necessarily pay their full bid amount. Instead, they pay just one cent more than the second-highest bidder.
For example, if you bid $2.00 and the second-highest bid is $1.50, you would pay $1.51 rather than your full $2.00 bid when someone clicks on your ad.
Additionally, your bidding strategy and placement boosts can also affect your CPC. We’ll discuss this in more detail in the next section.
Key Elements that Impact Amazon PPC Bidding and CPC
After setting your bid, several factors influence the final amount Amazon enters into the auction and your CPC. Here’s a breakdown of the main ones, along with practical tips for maximizing the returns you get from your ads:
1. Bidding Strategy
Before your bid enters the Amazon auction, you can choose a bidding strategy that allows Amazon’s algorithm to automatically adjust your base bid based on the likelihood of a conversion.
Here’s how the three Amazon bidding strategies work:
- Dynamic Bidding (Down Only): Amazon lowers your bid when a conversion is less likely. It is a great way to minimize wasted ad spend, but it may result in fewer clicks.
Use this strategy if your product has already made a considerable number of sales, and you’re focused on cutting spend on less-converting traffic. - Dynamic Bidding (Up and Down): Amazon increases your bid when a conversion seems likely and lowers it when it doesn’t. While this can help capture more sales, it might increase your overall CPC.
It’s best for new products or when you’re focused on driving more sales. - Fixed Bidding: Your bid stays exactly as you set it, regardless of the likelihood of a conversion.
This strategy is best when you want complete control over your bids and are prepared to monitor your ad performance closely and make manual adjustments.
2. Placement Boosts
Amazon lets you increase your bids for any of its three placements to boost your chances of showing up on them.
- Top of Search (First Page): This refers to the first few sponsored ad placements at the top of search results.
It’s a prime spot for visibility, and ads here often have higher click-through rates (CTR) and better chances of leading to a sale.
If you’re a new seller or looking to increase sales, consider boosting your bid for this placement by up to 50–100%. It can help you dominate search results, especially for high-traffic keywords. - Product Pages: Ads in this placement appear on product detail pages, offering exposure to customers browsing similar or related items.
While this placement tends to have lower conversion rates than the top of search, it can still drive valuable traffic.
If your product has more positive reviews or a lower price than your competitors, consider boosting bids by 10-30% for this placement.
3. Base Bid
Your base bid is the amount you initially set when creating your campaign. It acts as the foundation for any bidding strategy or placement boost you choose.
How to Select Your Base Bid
Selecting the right base bid is essential to running profitable Amazon PPC campaigns. There are two ways to do this:
- Manual Method
This involves choosing a target ACoS and manually calculating your bid based on it. Two common approaches to this are:
- RPC Bidding: Multiply your ACoS target by your EPC (Earnings Per Click) to determine your ideal CPC.
For example, if your target ACoS is 35% and you earn $6 per click, your ideal CPC would be $2.10. - Rule-Based Bidding: Set predefined rules to automatically decide bids based on performance.
For example, “If ACoS exceeds 40%, decrease bids by 10%. If ACoS is below 30%, increase bids by 5%.”
This approach offers more flexibility but is more complex for beginners.
We usually recommend setting your current ACoS as the target if you’re trying to increase sales. But if you’re trying to reduce ad costs, we recommend targeting 5% less than your current ACoS.
Automatic Method
This is a more hands-off approach to bid setting. You simply set your target ACoS, and the algorithm determines the right bids automatically.
This method is more accurate because it selects your bids based on your account’s current sales data and performance over time.
It also requires minimal supervision while ensuring relevant keyword targeting, making it ideal for both new sellers and seasoned sellers looking to save time without losing sales.
The image above is an example of the AiHello software recommending bids for a keyword that is performing poorly.
Bid Optimization Strategies for Amazon PPC Success
It’s not enough to set the right base bid; you must also learn to tweak your bids based on performance. Here are 4 strategies you can use right now to boost your PPC bids’ performance:
- Bid Higher When Launching a New Product
You should bid higher than your category’s average CPC when launching a new product to gain initial traffic and visibility.
This is because new products often have no reviews and rank low in search results, making it harder for them to generate clicks and conversions.
To know your category’s average CPC, enter a top-selling competitor’s ASIN on Helium 10’s Cerebro.
You’ll see a list of keywords that the competitor ranks for, including their search volume, organic rank, and most importantly, the estimated PPC bid range for each keyword.
Sort by search volume to focus on high-traffic, relevant keywords in your category, and look at the PPC bid range to determine your average CPC. - Lower Bids on Poor-Performing Keywords
When optimizing your Amazon PPC campaigns, one of the most effective bid management strategies is lowering bids on keywords that generate high costs without delivering sufficient conversions.
The best way to address this issue at scale is to use a bulk file to adjust bids across multiple campaigns.
To get started, download the bulk operations file from your bulk operations tab in Amazon campaign manager.
This file contains all the essential data for your active campaigns, including performance metrics for each keyword.
Make sure to set a date range of at least 30 days, as a longer period will provide a more accurate reflection of how your keywords are performing.
Once you have downloaded the bulk operations file, open it in Excel or Google Sheets and sort the data by Spend and Orders.
Next, identify keywords with high spend but low or no conversions (few or zero orders). As a general rule, keywords with more than 10 clicks and no sales can be considered poor performers
Another useful metric is the ACoS—keywords with a high ACoS and low ROAS should have their bids reduced.
With the poor performers identified, navigate to the Max Bid column in your bulk file and reduce bids accordingly.
After making your adjustments, save the updated file and re-upload it to the Bulk Operations section of your Amazon Advertising Console.
The changes will be applied to all relevant campaigns, helping you optimize your bids without manually tweaking each keyword individually.
- Bid Higher on Almost-Ranked Keywords
Amazon’s A9 algorithm ranks your product based on how much sales you drive for specific keywords, so bidding aggressively on high-conversion keywords can improve both your paid and organic rankings.
However, a product usually has many high-conversion keywords, so we recommend focusing on the ones with the best chance of ranking organically to avoid spreading your budget too thin.
There are two ways to go about this:
Strategy 1: Leverage Your SQPR to Find High-CVR Keywords
Your Search Query Performance Report (SQPR) contains your share of clicks and sales for each search term.
Look for keywords where your share of sales is higher than your share of clicks. This means you have a higher CVR than your competitors and will most likely be able to rank for those keywords.
Strategy 2: Use Helium 10 to Find Medium-Rank Keywords
To find the medium-rank keywords for your ASIN, put it in Cerebro and filter for keywords where you rank min 10 and max 30.
Be sure to exclude keywords with a search volume below 100 and those with your brand name.
Next, place each keyword you got from the SQPR and Helium 10 into its own Sponsored Product exact match keyword campaign.
Then add a high Top of Search boost and set high bids for maximum visibility.
Once your campaigns are running, you can create more campaigns in other match types and use Sponsored Brand Video campaigns with high bids to rank faster.
Then create a spreadsheet with all the keywords and update it with new rank, spending, and sales data every 10 days.
If your budget is limited, prioritize keywords where you already have a significant CVR advantage or an organic rank above 20.
- Bid Higher During High-Volume Sales Seasons
During high-traffic periods like Black Friday, Prime Day, or Christmas, raising your bids is usually a smart move. You’ll often see higher conversion rates in these periods as shoppers are more intent on making purchases.
Competition is also fiercer in these periods, so you need to bid higher to ensure that your product appears in prominent positions.
You can estimate your CPC by analyzing data from previous peak seasons with Helium 10’s Cerebro then adjust your bids accordingly.
Advanced Bidding Strategies
As your Amazon PPC campaigns grow, you’ll need to explore more advanced bidding strategies to maintain performance while saving time. Below are three powerful techniques that can help you drive more sales as you scale:
- Dayparting
Dayparting lets you adjust your bids based on product performance.
In the screenshot below, you can see the ACOS (green line) increasing during the weekend while sales (orange line) decrease.
This is an example of when dayparting would be beneficial. You can reduce bids on weekends and increase them on weekdays.
To use Dayparting, you need to identify the hours that you generate the highest sales. To do this, review business reports to determine peak sales periods.
Use at least 5-20 days’ worth of data to ensure accuracy.
Next, choose the campaign where you want to daypart from Amazon’s campaign manager.
Then select “budget rules” and add a schedule-based budget rule based on the high-performance hours you’ve identified.
Additionally, you can manually pause or unpause your campaigns during peak and non-peak hours.
The major limitation here is that the data and trends identified are on an account level and individual products may have different optimal buying times.
This means some products may sell best at midnight on weekends, while others may perform better at 5 am on Mondays.
The solution is to separately analyze the sales trend of each product to correctly determine these patterns, but it is difficult.
Plus, setting up rule-based automation for the entire catalog manually can be time-consuming, especially if you have a large catalog.
Tools like AiHello analyze hourly product-level data from Amazon Marketing Stream, identifying trends in ACoS, spending, sales, CPC, and CVR.
Then they adjust your bids throughout the day without manual intervention.
With this level of automation, you’ll no longer need to spend hours trying to figure out the best-performing times for each product or worry about setting up schedule-based rules to make the most of your budget for each ASIN.
- Catch-All Campaigns
In a Catch-All campaign, you add all your ASINs into an automatic campaign with low bids and let Amazon handle the targeting.
While the traffic you get may not be a lot and your ads may appear for less relevant searches, your ACoS will often be below 10%, making it an efficient way to drive traffic without overspending.
Additionally, since Amazon is handling the targeting, this strategy requires minimal maintenance, freeing you from the need to constantly monitor and adjust bids manually.
- Gold Panning Campaigns
Gold panning campaigns involve putting a large number of loosely relevant keywords in a broad match campaign and keeping them all at very low bids.
The main idea behind it is that you’re casting a very wide net for visibility.
Similar to catch-all campaigns, the search terms you show up for may not always be super relevant, and you may not show up that often because of your low bids, but you’ll still get enough traffic to make some sales – and oftentimes, it will happen at a very low ACoS.
Wrapping Up
With the tools and tactics in this guide, you can outperform your competitors, lower ad costs, and take your Amazon business to the next level. Use them, analyze your performance, and adjust your strategies.
As your campaigns grow, leverage automation tools like AiHello to streamline complex processes, so you have more time to focus on scaling your business.
