Avalara > Blog > Ecommerce > Is Bid+ Right for Your Amazon Sponsored Products?

Is Bid+ Right for Your Amazon Sponsored Products?

  • Apr 1, 2016 | Marcus DeHart

In "Bidding Strategies for Advertising on Amazon," I discussed the key components that you should consider when developing a bidding strategy on Amazon with Sponsored Products.

I recommended leveraging campaign targeting, segregating your ads by net profit, and evaluating campaign performance over time to help you determine the value of a click for each of your campaigns.

Amazon has a new feature currently in beta that might be worth trying. Bid+ is the latest in a handful of features you can use to optimize your advertising efforts on Amazon.

How Bid+ Works

The purpose of Bid+ is to automate your bidding, making it dynamically responsive to bidding auctions.

If you’re as busy as I am, the idea of manually adjusting your bids any more frequently than once a week is unthinkable. If you have hundreds of products with thousands of keywords, sifting through them all can be intimidating. Bid+ might be a solution that can help you respond to the bidding market without having to watch your campaigns on a daily basis.

Bid+ is simple. You turn it on for a campaign, and when one of your keywords in any of the ad groups comes up in a shopper’s search term, Bid+ will compare your bid with other bids and increase it up to 50 percent in an effort to out-bid the next highest bid. So, if you bid 50¢ on a keyword and the highest bid is 65¢, Bid+ will increase your bid just enough to beat the highest bid without exceeding 75¢.


Before you turn Bid+ on, keep in mind a couple things.

First, it’s only available on campaigns with manual targeting. Manual targeting enables you to adjust your bids per keyword. When I tried to add it to a campaign with automatic targeting, I couldn’t find the option. Automatic targeting uses a default bid that applies to all keywords, so Bid+ won’t work at the keyword level.

Second, the setting is on the campaign, not the keyword, ad, or ad group, which are contained within the campaign. All of your keywords in all of your ad groups within the campaign will participate if you turn on the feature. So make sure your campaign only includes ad groups to which you want to apply Bid+.

Set Up a Campaign with Bid+

Since this is a beta feature, I recommend creating a new campaign to try it out.

First determine which of your products can afford a higher chunk of change taken out of their net profit and use those to create ad groups. You could try one ad group for the campaign or create multiple ad groups if the products are not likely to share some keywords.

Second, let the campaign run for a week or two without Bid+. This will give you a baseline to compare. Keep your bids constant during the baseline time period so you are sure your before-and-after comparison reflects the change brought on by Bid+.

Third, go to the campaign settings and under Advanced Settings, select “On” from the Bid+ drop-down menu. Let the campaign run for about the same time period as it did without Bid+.


Evaluate Your Bid+ Campaigns

There are a couple different measurements you should look at to determine if Bid+ improved the performance of your campaigns. The most obvious metrics would be sales.

Did you get more impressions and clicks? Did you sell more products with Bid+ on than with it off? More is good, but with more, how much of an increase did you see in spend?

For a quick evaluation, go to Campaign Manager and navigate to any ad group within the campaign. Switch to the Keyword tab to see the performance of each keyword. Make sure you review the performance within the time period that only shows the metrics for pre and post Bid+ separately.

For a more precise measurement, download a Search Term report for the exact time periods you are testing the feature.



Don’t Forget Your Budget

One last thing to remember with Bid+ is that if you are winning more auctions and paying more than your set bids, you’ll need to watch your average daily budget.

If you keep running out of budget regularly, your performance metrics could be skewed. You might be missing out on sales when your ads turn off that would indicate that Bid+ is getting more sales or that you’re spending more than you want on ineffective clicks.

Increase your budget incrementally to make sure you get a full day’s measurement of impressions, clicks, and sales.

Final Word

Approach Bid+ with caution, as you would any beta feature. Amazon is expecting to see positive results for advertisers using this feature, but it still needs testing.

It’s possible there are still bugs to work through, so keep an eye on how much you are spending on a click to make sure that they don’t go above that 50 percent threshold.

While automation is great, as some sellers have learned with automated pricing tools, things can go wrong. You can’t completely remove the human element of sound judgment. Monitor your campaigns to make sure the feature is doing what you expect it to do.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Marcus DeHart
Avalara Author Marcus DeHart