The most anticipated Amazon sale of the year is around the corner – The Amazon Prime Day Sale! And for customers, this is a great opportunity to grab some fantastic deals on a variety of products. However, for e-commerce businesses, the Prime Day Sale is nothing short of a competitive battlefield.
Over 375 million items were bought in the 2023 Amazon Prime Day Sale, and customers saved around $2.5 billion, according to a report from Forbes
Source: Forbes
But, as an Amazon seller, you have the power to turn into a goldmine of opportunities.
How, you may ask.
And the answer lies in Amazon Prime Day Sale’s exclusive dynamic bid adjustment.
The dynamic bid adjustment is nothing short of a gift that Amazon is handing out to sellers. A powerful gift that can supercharge your visibility, boost Amazon sales, maximise your ad performance, and strategically outbid competitors just when customers are most likely to convert.
But the question is, how are you going to optimise your Amazon Prime Day strategies for dynamic bidding to get the most out of this bid adjustment?
Well, let’s find out.
- Dynamic Bids Up & Down – The Basics
- The Prime Day Advantage: Exciting News for Amazon Sellers!
- Benefits of Increased Bid Adjustments
- How to Set Up Your Campaign for Success
- Tips for Optimising Campaigns Before and During Prime Day
- Risks and Considerations For Dynamic Bidding Up & Down During Prime Day Sale
- Strategies to Mitigate Risks While Leveraging Dynamic Bids
Dynamic Bids Up & Down – The Basics
Dynamic Bids Up & Down is a bidding strategy that allows Amazon sellers to automatically adjust their bids based on their likelihood of making a sale. With this strategy, Amazon increases your bids for clicks that are more likely to convert into sales and decreases them for clicks that are less likely.
Dynamic Bids Up & Down is an Amazon bidding strategy that automatically adjusts bids based on conversion likelihood, increasing bids for high-conversion clicks and lowering them for less likely ones.
For example, if a shopper is close to purchasing your product, Amazon will raise your bid, boosting your chance of winning the ad placement.
On the flip side, if it seems unlikely that the click will convert, Amazon lowers your bid to help you save money.
Let’s say that your bid is set at $1 with dynamic bidding up & down selected. Now, Amazon carries out a real-time CPC auction to determine a likely opportunity for conversion at the top of the Amazon search results page. If Amazon feels like your product is more likely to convert, it can raise your bid to $2, which is based on a 100% adjustment of bids.
If your product falls outside of the first page of the Amazon product results page, then your max bid may be $1.50 for a 50% bid adjustment. Moreover, Amazon may even lower your bid to $0.50 in opportunities where it feels your product is less likely to convert.
In the US, campaigns using the “up and down” bidding strategy generated 119% more ad-attributed sales per campaign while achieving a 5% lower return on ad spend (ROAS) compared to campaigns that employed a “down only” strategy.
Source: Amazon
This dynamic bid adjustments feature gives you more control over your ad spend. This ensures that you’re bidding smarter and making the most out of every opportunity.
The Prime Day Advantage: Exciting News for Amazon Sellers!
For the Amazon Prime Day Sale, Amazon is making a temporary change for Prime Day by allowing advertisers to increase their maximum bid adjustments for Sponsored Products campaigns using the “dynamic bids – up and down” strategy.
This means that instead of the usual 50% increase, bids can now be raised by up to 100% for ads on product pages and in search results during the event. This adjustment is designed to help advertisers gain more visibility and sales during the high-traffic Prime Day period.
For example, let’s say you have a base bid of $5. Now, during the Prime Day Sale, when shoppers search for your product or during placements for product pages, your bid can increase to $10.
What it essentially does is increase your chances of appearing at the top of the search results page and grab the attention of your target audience.
Benefits of Increased Bid Adjustments
There can be significant advantages to your advertising strategy on Amazon during the Prime Day Sale with Dynamic Bids Up & Down.
Some of the key benefits that you can expect from this are illustrated below.
1. Higher Visibility and Impressions
When you get a temporary boost in maximum bid adjustments, your ads can have a greater chance of standing out in a crowded marketplace. Thus, when your bids are raised, you can secure more prominent placements on the Amazon products search results page.
This means that you will have more eyes on your products, which can lead to increased impressions and brand exposure. And in a competitive environment like the Prime Day, visibility is your best friend for attracting potential buyers.
2. Enhanced Sale and Conversion Rates
More visibility often leads to higher sales. As your ads reach a larger audience, the likelihood of clicks and purchases increases.
During Prime Day, shoppers are actively looking for deals. This makes them more receptive to your promotions. By optimising your bids, you can capitalise on this heightened interest and potentially boost your conversion rates significantly. Thus, the right bid adjustments, which Amazon is taking care of on your behalf, can turn casual browsers into enthusiastic buyers!
How to Set Up Your Campaign for Success
To make the most out of this Amazon Prime Day Sale, you need to take advantage of the dynamic bid adjustments. But how do you ensure that?
Simple! You set up your Sponsored Products campaigns effectively. Below is a guide on how to do just that.
1. Choose the right bidding strategy
When creating or updating your Sponsored Products campaign, select “Dynamic bids – up and down” under the Campaign Bidding Strategy section. This option allows Amazon to adjust your bids in real-time. Thus, your bids can be increased in high conversion opportunities and also lowered when conversions are less likely to occur.
2. Create a New Campaign or Update Existing Ones
If you’re starting fresh, simply select the dynamic bidding option during the campaign setup. For existing campaigns, navigate to the Campaign Settings page, choose the desired campaign, and update the bidding strategy accordingly.
3. Set Your Base Bid
Always remember to determine a competitive bid for your products. During the Prime Day Sale, your bids can increase to up to 100% for placements at the top. Thus, you should ensure that your base bid is set up appropriately to avoid getting high advertising costs.
Tips for Optimising Campaigns Before and During Prime Day
Below are some Amazon advertising tips that may come in useful for you as an Amazon seller to optimise and make the most out of your Amazon Prime Day campaigns.
1. Define Clear Goals
Establish what you want to achieve with your campaign—whether it’s increasing sales, boosting brand visibility, or driving traffic to specific products. Set realistic budgets that align with these goals.
2. Refine Your Targeting Options
Ensure that your ads are reaching the right audience by refining your targeting settings. Try to focus on keywords and product categories that are most relevant to your offerings.
3. Monitor Performance Metrics
Try to keep a close eye on key performance indicators like impressions, conversion rates and clicks. These types of data will help you make more informed decisions about adjusting your bids during the Prime Day Sale.
4. Adjust Based on insight
Use your performance data to tweak your strategy if needed. If you feel like certain keywords are underperforming, then you should consider reallocating your budget to higher-performing areas.
5. Plan Ahead
Start preparing your campaigns well in advance of Prime Day. This includes setting up dynamic bids, refining targeting strategies, and ensuring all elements are optimised for maximum impact during the event.
Risks and Considerations For Dynamic Bidding Up & Down During Prime Day Sale
Although increasing bid adjustments during the Amazon Prime Day Sale can improve your visibility and sales, there are certain potential downsides to it that you should be aware of.
You need to understand these risks and have proper strategies in place to mitigate them for a successful advertising campaign.
Below, we have discussed the two main risks associated with increased bidding during the Prime Day Sale.
1. Higher advertising costs
One of the main risks associated with automatic increased bidding is the higher cost of advertising. As you raise your bids to take advantage of dynamic adjustments, there’s a chance that your advertising expenses could go up quickly. If not managed carefully, this could lead to spending more than anticipated without a corresponding increase in sales.
In addition to this, Prime Day can be a competitive landscape with numerous sellers increasing their bids, This can increase the Cost-Per-Click significantly. This increased competition can strain budgets, especially if your ad campaigns aren’t optimised for maximum efficiency.
2. Diminishing cost of returns
Another concern for sellers might be the potential for diminishing returns. Although higher bids can lead to increased visibility, they don’t guarantee higher conversion rates.
Thus, if your product listings or even ad creatives aren’t compelling enough, you may find that increasing your ad spend does not guarantee proportional sales growth. This can result in wasted ad spend and poor profitability.
Now that you are aware of the risks associated with Dynamic Bidding Up & Down, let’s look at some strategies that you can leverage to mitigate some of the potential risks.
Strategies to Mitigate Risks While Leveraging Dynamic Bids
If you want to effectively manage the risks associated with dynamic bidding, try to implement the following strategies as discussed below.
1. Set Clear Budgets
Try to establish a clear budget for your Prime Day campaigns. Monitor your spending closely and adjust your bids as necessary to stay within this budget. Setting daily or campaign limits can help prevent overspending on your ad spend.
2. Optimise Product Listings
This is a vital aspect of mitigating ad spend risks, which most sellers ignore. Ensure that your product listings are fully optimised before the Prime Day sale. Make sure you are using high-quality images, compelling descriptions, and competitive pricing, as these can significantly improve conversion rates. This, in turn, can make your increased bids more effective.
3. Monitor Performance Metrics
Keep a close eye on key performance indicators (KPIs) such as click-through rates (CTR), conversion rates, and return on ad spend (ROAS). Regularly reviewing these metrics will allow you to make informed adjustments to your bids in real time.
4. Use A/B Testing
A/B testing is a great way to experiment with different ad creatives and targeting options to determine what resonates best with your audience.
25%—That’s how much you could boost your sales by simply using Amazon A/B testing.
Source: Amazon
A/B testing can provide valuable insights that will help refine your campaigns and maximise the effectiveness of your bids.
5. Leverage Automated Rules
You can also utilise Amazon’s automated rules feature to adjust bids based on performance metrics automatically. This can help you respond quickly to changes in campaign performance without needing constant manual oversight.
Thus, by being aware of the potential risks and taking proactive steps to mitigate them, you can effectively leverage dynamic bid adjustments during Amazon Prime Day and maximise your return on investment.
Parting Thoughts
The Amazon Prime Day Sale is one of the most awaited times of the year for both sellers and consumers alike. And with Amazon’s dynamic bid adjustment, sellers have this golden chance to maximise their bids and achieve impressive results.
Thus, with careful planning and execution, embrace this opportunity to leverage your brand, connect with more customers and drive significant sales growth.
So, get ready to make the most out of Prime Day and watch your business thrive!
Ready to boost your brand’s digital presence? Partner with Nico Digital for results-driven marketing strategies. Let’s grow your business—schedule a free consultation today!
