Why Bidding Decides Profit (and Rank)
Bid too high and you buy expensive clicks that won’t pay back. Bid too low and you starve impression share, losing rank momentum. The sweet spot aligns CPC × CVR with your target ACoS—and adapts per placement and keyword intent.
The Three Dynamic Bidding Modes (What We Use and When)
- Dynamic Bids — Down Only
- Use for launches and tight control.
- Amazon lowers your bid when a click looks less likely to convert. Great for early learning and protecting ACoS.
- Dynamic Bids — Up & Down
- Use once you have proof of strong conversion.
- Amazon can raise or lower bids based on likelihood to convert. We turn this on for exact-match winners and strong ASIN targets.
- Fixed Bids
- Use rarely.
- No algorithmic help. We only use it in edge cases (e.g., very stable branded exact with consistent CPC/CVR).
Agency Play: Start Down Only for Discovery. Promote winners to Core Exact, then test Up & Down on those exact terms after you see consistent conversions.
Placement Modifiers: Top of Search, Product Pages, Rest of Search
Amazon lets you apply a percentage boost by placement. The key is to earn your boost with data, not assumptions.
How we phase it:
- Phase 1 (No modifiers): Let data accumulate 7–14 days.
- Phase 2 (Test small): If Top of Search (ToS) shows meaningfully better CVR than the average, add a +10–20% boost.
- Phase 3 (Dial in): Increase or decrease in 5–10% steps based on ACoS/CVR deltas. Often, ToS outperforms; Product Pages depends on your category and conquest strategy.
Quick diagnostic:
- If ToS CVR is ~30%+ higher than Rest of Search and ACoS is acceptable, a modest ToS boost is usually justified.
- If Product Pages ACoS is bloated, reduce its modifier (or set to 0) and shift budget to ToS/Core Exact.
The Simple Math That Guides Every Bid
Tie your bid to unit economics so you don’t guess.
Target CPC formula: Target CPC=Target ACoS×AOV×CVR\textbf{Target CPC} = \text{Target ACoS} \times \text{AOV} \times \text{CVR}Target CPC=Target ACoS×AOV×CVR
- ACoS = Ad Spend ÷ Ad Revenue
- CVR = Conversions ÷ Clicks
- AOV = Average order value (for the advertised SKU/ASIN)
Example:
Target ACoS = 25% (0.25), AOV = $25, CVR = 10% (0.10)
→ Target CPC = 0.25 × 25 × 0.10 = $0.625
If your actual CPC is higher than $0.625 at that CVR, bids likely need trimming (or conversion needs fixing).
Pro tip: Recompute Target CPC by placement if ToS CVR is higher. Higher CVR allows a higher CPC at the same ACoS.
Rule-Based Bidding: Our Day-to-Day Controls
We rely on repeatable rules before any “automation.”
Promotion (bid up):
- Search term/keyword has ≥2–3 orders in 14–30 days and ACoS ≤ target → +5–12% bid.
- If impression share is low but CVR is strong at ToS → test a small ToS modifier.
Protection (bid down/pause):
- 10–15 clicks, 0 orders → −10–20% bid or pause (depending on relevance).
- Rising CPC with falling CVR for 7–14 days → −10–15% bid and review listing/creative.
Budget direction:
- Shift budget from discovery (broad/phrase/auto) into Core Exact winners weekly.
- Keep Branded isolated to avoid polluting non-branded ACoS.
When to Use Algorithmic Bidding (and When Not To)
Good fit:
- 30+ ASINs, lots of traffic, and stable conversion data.
- You need faster reaction cycles across thousands of keywords/ASINs.
Not ideal yet:
- New listings with sparse data.
- Weak listings (images, ratings, price) where algorithms will just scale bad traffic.
Our approach:
- Prove unit economics with rule-based control.
- Then enable Up & Down bidding on proven terms and layer algorithmic tools (or bulk rules) to scale.
Putting It Together: A 30-Day Bidding Playbook
Days 1–3 — Launch Control
- Dynamic: Down Only
- No placement modifiers
- Exact (Core): 5–20 high-intent terms; Discovery: phrase/broad + product targeting
- Bids: Around suggested midpoint for Discovery; slightly above midpoint for Core Exact
Days 4–10 — Signal & Prune
- Pause/trim keywords with 10–15 clicks, 0 sales
- Add negatives for irrelevant themes
- Keep Discovery spend modest; protect ACoS
Days 11–20 — Promote & Test
- Move converting search terms into Core Exact
- Test Up & Down on top exacts with consistent CVR
- Add a +10–20% ToS modifier if ToS CVR >> average
Days 21–30 — Dial & Scale
- Winners: +5–12% bid increases if under target ACoS and low impression share
- Laggards: −10–20%
- Expand exact long-tails; refine Product Pages modifier; increase budgets on proven ad groups
Common Bidding Mistakes (We Fix These in Audits)
- Turning on Up & Down everywhere on day one (inflates CPC).
- Applying high ToS modifiers without proof of stronger CVR.
- Mixing branded + non-branded in one campaign (dirty data → wrong bid decisions).
- Ignoring placement performance; not splitting by match type/intent.
- Chasing CPC down while the listing (images, price, reviews) caps CVR.
Fast FAQs
Should I ever use Fixed Bids?
Only in niche cases where you want zero algorithmic adjustment. For most, Down Only → Up & Down on winners is safer.
What’s a good first ToS modifier?
Start small (+10–20%) only after ToS shows better CVR and acceptable ACoS. Increase gradually.
How often should I change bids?
Once per week for most terms. High-volume exacts can handle twice-weekly adjustments.
Agency Takeaway
Great bidding is math + method: anchor bids to Target ACoS with the CPC formula, earn your placement boosts with data, and graduate from rule-based control to algorithmic scale only when the listing and CVR can support it.
Want a free bid map for your top ASINs?
Send your AOV, target ACoS, last 14-day CVR by placement, and we’ll return a ready-to-use bid and modifier plan.