Amazon Ads announces bid algorithm will change over Prime Day
Amazon has announced on July 3rd, just under two weeks away from Prime Day (July 16-17th), that their bid algorithm will change over Prime Day, in an effort to ensure advertisers gain impressions and sales.
Amazon has stated that bids adjustments will be changed for users of “dynamic bids – up and down”. There are currently three bidding strategies on Amazon: fixed bids, dynamic bids - down only, and dynamic bids - up and down. Dynamic bids - up and down is often the most commonly used bidding strategy by advertisers, due to its flexibility to both raise bids achieve sales when an ad may be more likely to lead to a sale, and reduce bids when ads may be less likely to lead to a sale.
Amazon’s full announcement states “to help advertisers gain impressions and sales during Prime Day, we’re temporarily allowing bids for campaigns using dynamic bids – up and down to increase by up to 100% for ‘rest of search’ and ‘product page placements’ (currently this is at 50%.) For example, a $1 bid will be able to increase up to $2.
Change is limited to:
- Sponsored Products campaigns using ‘dynamic bids – up and down’
- Ads that appear in ‘rest of search’ or ‘product page placements’
- Starting at the beginning of the Prime Day event and until its conclusion.
- After the Prime Day event has ended, the dynamic bids maximum will return to 50% for rest of search and product page placements.”
This is a key change to be aware of for advertisers on Amazon ahead of Prime Day, especially as many advertisers already have placement modifiers setup in addition to their bidding strategy. For example, a campaign may currently have a £1 bid with a 50% placement modifier for rest of search. Under the normal dynamic bids - up and down, this bid could be raised to £2.25 for a rest of search placement, however now during Prime Day, this bid could now reach £3.00.
As a result, advertisers on Amazon should review all dynamic bids - up and down campaigns and their respective placement modifiers, to ensure that they are aware of how much they could be bidding during Prime Day on July 16th and 17th, otherwise there is the potential for advertising cost of sales (ACOS) to significantly increase during this period.
