Are you an Amazon seller looking to optimize your advertising costs and maximize your profits? In this blog post, we will dive into the exciting world of Amazon’s new bid rules, a game-changing feature that has the potential to unlock significant ACOS savings for your business. By leveraging these innovative bid rules, you can achieve a 1-3% reduction in your advertising cost of sale (ACOS), resulting in improved profitability and a stronger return on investment. So, get ready to discover how these new bid rules can revolutionize your Amazon advertising strategy and propel your sales to new heights. Let’s explore the ins and outs of Amazon’s bid rules and uncover the secrets to boosting your ACOS savings.
How Amazon’s New Bid Rules Work?
Amazon’s new bid rules work by introducing a rule-based approach to campaign optimization. Here’s how they operate:
- Baseline ROAS Target: Sellers set a baseline return on ad spend (ROAS) target that aligns with their campaign objectives. This target serves as the foundation for optimization efforts.
- Customized Bid Adjustments: Sellers can create rules to adjust their bids during specific time blocks or under certain conditions. For example, bids can be increased by a certain percentage during high-traffic periods or decreased on specific days.
- Stacking Bid Adjustments: The bid adjustments are layered on top of the baseline bids. If sellers are already using placement bid adjustments, those percentages will also be considered, allowing for additional optimization.
- Algorithmic Optimization: Amazon’s algorithm handles the ongoing optimization process based on the predetermined bid rules. It automatically applies bid changes according to the specified conditions, aiming to achieve the desired ROAS target.
- Improved Campaign Management: The rule-based bidding approach provides sellers with more control and flexibility in managing their ad campaigns. They can strategically adjust bids to maximize performance during peak times and minimize costs during less competitive periods.
Tips for Testing Rule-Based Bidding on Amazon New Rules
Here are some simplified tips for testing rule-based bidding on Amazon’s new bid rules:
- Begin by making small percentage adjustments to your bids to assess performance.
- Monitor the impact over a couple of weeks before considering larger increases during peak conversion periods.
One Rule at a Time
- Create and implement one rule at a time, focusing on your best-performing time of the day. For example, initially boost bids by 5% on weekdays from 3-7 PM. Once you see positive results from this initial rule, you can expand and refine your schedule further.
Allow Optimization Time
- Give the algorithm sufficient time to optimize by factoring in lead times, especially when lowering bids.
- Gradually decrease bids, allowing the system to adjust and optimize before deciding on further decreases.
- Utilize campaign and ad group-level reporting to compare performance before and after implementing your bid rule schedule.
- Look for improvements in conversions, revenue, and return on ad spend (ROAS) during your defined time blocks. Make precise tweaks based on the data.
Consider Fixed Bid Campaigns
- If you want to ensure decreased bids during poor-performing periods, use fixed bid campaigns in conjunction with automated rules. Currently, Amazon’s automated rules only allow bid increases, so fixed bid campaigns can help guarantee bid decreases when needed.
Considerations In Building Schedule For Amazon’s New Bid Rules
When building a schedule for Amazon’s new bid rules, there are several considerations to keep in mind:
Analyze Historical Data
- Start by analyzing your historical data in order to identify patterns and trends in your campaign performance.
- Look for specific days, times, or time intervals that consistently perform well or poorly.
Define Performance Goals
- Determine your performance goals, such as maximizing conversions, increasing revenue, or improving return on ad spend (ROAS). This will help guide your bid rule schedule and prioritize certain time periods.
Segment Your Campaigns
- If you have different types of products or target different audiences, consider segmenting your campaigns. It basically allows you to create more specific bid rule schedules based on the performance of each segment.
Test and Monitor
- Implement your bid rule schedule gradually and monitor the performance closely.
- Start with small adjustments and analyze the impact over a reasonable timeframe. Make data-driven decisions based on the results.
- Take into account any seasonal variations in your business or industry.
- Adjust your bid rule schedule accordingly to align with periods of increased demand or competition.
Be Flexible and Iterative
- Building a bid rule schedule is an iterative process.
- Continuously monitor and evaluate the performance of your schedule and make adjustments as needed.
- Be open to experimenting with different time intervals and bid adjustments to find the optimal strategy.
Consider External Factors
- Keep in mind external factors that may influence your campaign performance, such as holidays, promotions, or industry events.
- Adjust your bid rule schedule to capitalize on these opportunities or mitigate potential challenges.
Adapt to Amazon’s New Era of Bidding
As Amazon continues to evolve its advertising platform and auction process, brands need to stay on top of changes to bid strategies and campaign management. By understanding the rationale behind Amazon’s bid rule adjustments and how different elements like rank, sales volume, and return on ad spend factor into the algorithms, advertisers can make informed decisions about budgeting, bidding, and also scheduling.
While building an optimal schedule requires ongoing testing and optimization, keeping core business goals and KPIs central can help streamline decision-making. A thoughtful, data-driven approach to understanding how changes to Amazon’s systems impact campaigns at a granular level is key. Furthermore, with the right analytics, insights and proactive adaptations, brands can develop schedules and roadmaps to cost-effectively meet targets for visibility, conversions and profitability within this ever-changing platform.
If you need more help scaling your Amazon business, don’t hesitate to reach out to us at Evolve Media Agency. We’re here to help you boost your conversion rates and ramp up your Amazon sales. Check out our pricing portfolio and get a free listing audit by visiting emaamz.com. Also, remember to grab your free Amazon listing checklist at AMZchecklist.com our team is here to help. Thanks for tuning in, catch you in the next blog.