When managing Amazon PPC campaigns, bid optimisation is one of the most impactful levers you can pull. It’s the key to achieving goals like hitting your target ACOS, improving profitability, or growing impressions.
What Is Bid Optimisation?
Bid optimisation involves adjusting the maximum cost-per-click (CPC) for your targets (i.e. keywords or product targets) to align with your campaign goals. Depending on your priorities, you might increase bids to gain more visibility or decrease them to improve profitability for example.
But where and how do you actually make these optimisations? There are three main options:
- Campaign Manager: View and adjust bids directly in Amazon’s interface or analyse performance using ads reports in a spreadsheet before making manual changes.
- Bulk Sheets: Download a bulk sheet to analyse your data, modify bids in bulk, and re-upload to apply bid changes.
- PPC automation tools: Use software like fern to automate bid adjustments based on performance rules or tool-specific algorithms, saving time and improving efficiency.
Manually adjusting bids – especially in Campaign Manager – can be time-consuming and limiting, making it difficult to scale. As your campaigns grow, bid optimisation can quickly become one of the most time-intensive tasks in your day-to-day. Beyond the time aspect, automation allows for granular control at scale, ensuring each target is optimised at its own ideal frequency.
Foundational Bid Optimisation Strategies
Different goals require different strategies. In most cases however, the goal is to work within an ACOS target and maximise profitable sales. Broadly, bid optimisation can be grouped into three main actions:
- Increase bids for profitable targets
- Decrease bids for unprofitable targets
- Decrease bids for non-converting targets
Let’s dive deeper into each of these scenarios.
Increase bids for profitable targets
If a target is generating sales and performing below your target ACOS, consider increasing its bid. The goal is to enhance visibility and capture more profitable sales.
How to optimise?
Start by selecting a specific time period, such as the last 14 days. During this period, identify targets that have generated at least one ad order and are performing under your target ACOS. These are the targets worth focusing on for bid increases.
The percentage increase depends on various factors, including the product price, niche, and current bid levels. Typically, adjustments could range between 5% and 15%.
Maximum bids: Don’t raise bids indefinitely
Extremely high bids won’t necessarily guarantee better ad visibility and carry a significant risk of making performance unprofitable. Set a maximum bid limit to prevent overspending. This cap can be either fixed (e.g. £2) or dynamic (e.g. a function of your CPC).
Decrease bids for unprofitable targets
The next scenario to consider involves targets that are generating sales but performing above your target ACOS. In these cases, the goal is to lower the bid to improve profitability.
How to optimise?
To identify such targets, focus on those that have generated at least one ad order during a chosen time period but are exceeding your target ACOS. Lower the bids for example by a range of 10% to 20%.
Avoid decreasing bids too aggressively
It’s crucial to act with caution: Since these targets are already driving sales, reducing the bid too aggressively could hurt their visibility and risk losing valuable orders. The aim is to maintain a steady number of conversions at lower spend to improve profitability.
Decrease bids for non-converting targets
Lastly, there will be targets that generate clicks – and therefore ad spend – but don’t generate any conversions. These targets can drain your ad budget and can significantly impact overall profitability. To address this, the strategy is again to decrease the bids.
How to optimise?
Filter for targets with no ad orders but a high number of clicks. These targets are consuming your budget without delivering returns, so it’s best to take decisive action. Consider a stronger bid reduction for these cases – somewhere in the range of 15% to 25%.
How long should you wait before optimising?
Of course, clicks are necessary to generate conversions, but it’s equally important to recognize when a target is no longer worth the investment.
So, how many clicks are too many without a conversion? That depends. A practical starting point is to calculate your product or campaign’s average conversion rate (CR = Ad orders / Clicks). Using this, you can estimate the number of clicks typically needed to generate one order (Clicks needed = 1 ad order / CR).
Keep in mind, this is an average – real-world performance may vary slightly for each target. It’s wise to allow for some flexibility and slightly exceed this threshold before aggressively reducing bids.
How We Can Help
Managing bid optimisation manually is time-consuming and prone to inconsistencies. At fern, we streamline the process with powerful tools and expert guidance.
💡 Automate Bid Optimisation
Save hours by automating adjustments while maintaining full control over the process.
💡 Granular Control with Transparency
Our automation allows you to create powerful rules with precise conditions, ensuring your optimisation strategy aligns perfectly with your goals.
💡 Easy-to-Use Templates
Quickly implement optimisation strategies with pre-built customisable templates.
💡 Expert PPC Coaching
Through our 1-on-1 coaching services, we work closely with you to optimise your campaigns and achieve your goals.
Take the guesswork out of bid optimisation and unlock your campaign’s full potential with fern. Let’s chat!
