Amazon Advertising: New Features, Better Campaigns

[The post is the second of a multi-part ‘Be Seen’ series, all about advanced advertising strategies across the most competitive online channels. View the first post here.]

From new targeting capabilities to budgeting features, Amazon Advertising has a lot to offer advertisers. Even in the last several months, Amazon has rolled out a number of new bidding tools that you can leverage to scale your Amazon Advertising account in a smart way.

In part one of this series, we broke down the elements of a well-run Amazon account. In this post, we’ll outline some of the new features of Amazon Advertising and how to make the most of them, including:

• Dynamic Bidding
• Placement Bid Adjustments
• Portfolios
• Budget notifications

Dynamic and Placement Bidding

Bid+ used to be the only option advertisers had to amplify their Sponsored Products strategies. As of January 2019, Amazon has sunset this bidding mechanism and replaced it with two new tools that go much deeper.

Dynamic Bidding

Instead of placing a modifier on where your Sponsored Products will show up (i.e., paying more to show up on a product page regardless of purchase/conversion intent), dynamic bidding uses Amazon’s algorithm to adjust the bid based on the likelihood of the ad converting to a sale.

In addition to the “fixed bids” option for bidding, there are now two dynamic bidding options, “down only” and “up and down.”

Down only

With down only, Amazon will reduce your cost per click (CPC) when there is less likelihood of a conversion. If you select down only and include no placement modifiers, you will never bid more than your CPC. If you use a placement modifier, you could still pay more than your max CPC.

Up and down

Here’s where things get interesting. Here Amazon will use its algorithm to determine if your ad has a higher or lower chance of converting to a sale and then make CPC adjustments accordingly.

If the likelihood of conversion is lower, it performs the way a down only modification would perform.

But, if a higher conversion is likely, the up and down setting gives Amazon permission to bid up to 100% of your max CPC + modifier. That’s right, it multiplies your modifier. For instance, if you have a max CPC of $1, a placement modifier of 900% and Dynamic bids – up and down selected, your actual CPC could be as high as $18!

($1 * 900%) * 100%) = $18

You may be asking, “How does Amazon predict the likelihood of an ad converting to a sale?” According to Amazon:

“Amazon uses machine-learning models trained on the purchase data shoppers generate on our platform when they shop. These models use multiple signals to predict the likelihood that an ad will convert to a sale if clicked, including historical performance of the ad (or ads similar to it) and the context in which it is displayed (e.g. the customer search term, placement, time of day, etc.). We are constantly updating these models, looking for additional signals that improve the accuracy of prediction.”

Placement Bid Adjustments and Reporting

Learning the location of where your Sponsored Product ad displayed used to require pulling a product placement report. This report would tell you whether your ad showed up “Top of Search” or “Other on Amazon,” and the report would break down the ad’s corresponding metrics (spend, sales, ACoS, etc). Additionally, the Bid+ feature would allow you to raise your bids up to 50% if Amazon’s algorithm thought you had a good chance of winning the auction with a higher bid.

Amazon now has a “Placements” tab within Sponsored Products campaigns with relevant ad information. In this tab, you can view all your favorite metrics for each placement and make bid adjustments.

Most importantly, with the Placements tab, advertisers are now able to enter a percent increase for two separate ad placements: “top of search (first page)” and “product pages.” The “rest of search” placement is still included in your report, though it doesn’t allow bid adjustments.  

Bid adjustments can range from zero to 900 percent. That’s right, you can actually increase your bid by up to 900 percent if you’d like. For example, your $1 max bid could now become $9. Obviously, this may not be the best modification for every campaign, but it may apply in certain situations where you believe your conversion rate and profit margin allow for it.

Overcoming Amazon’s Real-Time Data Limitations

Valentines Day, Mother’s Day, Prime Day, Cyber Monday, Black Friday, Christmas. If your business sees any spikes during any specific days of the year, then it is important for you to keep track of your advertising in real-time and make adjustments.

Unfortunately, Amazon does not make it super easy to get a good read on real-time, intraday reporting. However, there are a number of precautions you can take to prepare for high-demand days.

Portfolios

Amazon launched the Portfolios program in December of 2018. Once you group your campaigns into a portfolio, you can pull metrics for that portfolio, add or remove campaigns from that portfolio and set budget caps for those campaigns.

For example, let’s say you’re a outdoor sporting goods retailer. You could, say, segment all your “tents” in one portfolio and all your “backpacks” in another. Then, you’ll be able to see how each subset is performing with just the click of a button.

When it comes to controlling spend, the Portfolios program gives you a budget cap option where you can specify the max amount of money you are willing to pay for a specific timeframe for that portfolio. This helps during high-traffic holidays or times when you want to spend more money over a short period of time.

If you have 10 campaigns in Portfolio 1 and set a cap for $1,000 for the month of February, that portfolio will not spend over $1,000.

One thing to keep in mind: the portfolio doesn’t pace your budget evenly over your designated date range. Once the cap is hit, your campaign stops. If you find that you keep hitting your cap too early, it might be a good idea to increase your budget cap, especially in high-traffic seasons.

Also, if you want your campaigns to remain active indefinitely, you must set your budget cap setting to “no budget cap.”

Budget Notifications

During peak sales days like Prime Day, you will want to make sure your budgets and portfolios have enough room to adjust for the influx in impressions/clicks/spend that is sure to happen.

One way to keep an eye on your campaigns during these days are to sign up for the budget notification emails. Amazon can send these notifications when your campaigns have used 80% or 100% of your budget. Again, if you notice one of your campaigns is about to run out of budget — or repeatedly runs out of budget — you may want to increase the daily budget.

Another way to get this visibility is through the Amazon graph on the Amazon Advertising homepage. Just filter your account by “Almost out of budget.” Once you select this filter, Amazon will find all Sponsored Product campaigns that are currently out of budget or nearing their cap.

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