Amazon Pay-Per-Click (PPC) advertising is one of the most effective ways for sellers to increase product visibility and drive sales. However, a well-optimized bidding strategy is essential to avoid wasted ad spend and maximize profitability.
Amazon offers two main bidding strategies: Manual Bidding and Automated Bidding. Each has its advantages and drawbacks, making it crucial for sellers to understand their differences and determine which best aligns with their business goals.
Amazon PPC works on a bidding system where advertisers compete for ad placements by setting a maximum cost-per-click (CPC) they are willing to pay. The higher the bid, the better the chances of securing a top placement on Amazon search results.
There are three main bidding options within Amazon PPC:
Manual Bidding – Sellers manually set bid amounts for individual keywords, ad groups, or product placements.
Automated Bidding – Amazon’s algorithm automatically adjusts bids based on performance data and real-time conditions.
Rule-Based Hybrid Bidding – A combination of manual and automated bidding, where sellers set predefined rules for bid adjustments.
This article focuses on the manual vs. automated bidding debate to help you make an informed decision.
What is Manual Bidding?
Manual bidding allows sellers to set their own bids for specific keywords and ad placements. This strategy gives sellers full control over how much they’re willing to spend on each click.
How Manual Bidding Works
Sellers select individual keywords and assign bid amounts based on their expected return.
Performance data is reviewed, and bids are manually adjusted to optimize performance.
High-performing keywords receive higher bids, while underperforming ones may be reduced or paused.
Advantages of Manual Bidding
Full Control – Sellers can strategically allocate their budget and adjust bids as needed.
Better Budget Management – Avoid overspending by setting strict bid limits.
Optimized for High-Performing Keywords – Allows focusing on keywords with strong conversion rates.
Disadvantages of Manual Bidding
Time-Consuming – Requires frequent adjustments and ongoing monitoring.
High Learning Curve – Beginners may struggle with bid optimization.
Slower Adjustments – Reacting to sudden changes in market trends takes time.
When to Use Manual Bidding
If you have experience managing Amazon PPC campaigns.
If you want complete control over your budget and keyword strategy.
If you’re managing a small number of campaigns and can dedicate time to optimization.
What is Automated Bidding?
Automated bidding relies on Amazon’s machine learning algorithms to adjust bids dynamically. Amazon analyzes historical data, competitor activity, and conversion rates to determine the optimal bid for each keyword.
How Automated Bidding Works
Sellers set a maximum daily budget, and Amazon adjusts bids based on real-time data.
Bids increase for high-converting keywords and decrease for low-performing ones.
The algorithm continuously optimizes the campaign to maximize clicks and conversions.
Advantages of Automated Bidding
Saves Time – No need for constant manual adjustments.
Real-Time Bid Adjustments – Amazon reacts instantly to market fluctuations.
Ideal for Large Campaigns – Efficient for sellers managing multiple products.
Disadvantages of Automated
Bidding
Less Control – Amazon decides how much to bid.
Risk of Overspending – The system may increase bids beyond your comfort level.
Limited Customization – Sellers can’t fine-tune bid adjustments as precisely as with manual bidding.
When to Use Automated Bidding
If you’re new to Amazon PPC and don’t want to manually manage bids.
If you have a large catalog and need a scalable approach.
If you want Amazon to optimize bids for conversions automatically.
Comparing Manual vs. Automated
Bidding
| Feature | Manual Bidding | Automated Bidding |
| Control | High | Low |
| Time Required | High | Low |
| Bid Adjustments | Manual | AI-driven |
| Budget Management | Precise | Variable |
| Optimization Speed | Slower | Instant |
| Best For | Experienced sellers | Beginners or large campaigns |
The Hybrid Approach: Best of
Both Worlds?
For many sellers, the ideal strategy is a hybrid approach—using manual bidding for high-performing keywords and automated bidding for testing new keywords.
How to Use a Hybrid Bidding
Strategy
Manual Bidding for High-Performing Keywords – Focus on proven keywords that drive conversions.
Automated Bidding for New Keywords – Use Amazon’s AI to test new keywords without manual intervention.
Monitor Performance and Adjust – Regularly analyze data and switch between bidding strategies as needed.
A hybrid approach provides the flexibility of manual control while leveraging automation to optimize efficiency.
Advanced PPC Bidding Strategies
1. Dynamic Bidding (Up and Down)
Amazon increases or decreases bids in real time based on conversion probability. This works well for sellers looking to maximize ROI while staying competitive.
2. Placement Adjustments
Amazon allows bid adjustments for different ad placements:
Top of Search: High visibility but expensive.
Rest of Search: Moderate cost with good conversion potential.
Product Pages: Lower bid costs but may require higher budgets.
3. Dayparting (Time-Based Bidding)
Adjust bids based on when your audience is most active. If your product sells more in the evening, you can increase bids during peak hours.
4. Competitor Bidding
Target competitor product listings using Sponsored Product ads and adjust bids dynamically to capture their traffic.
Common Bidding Mistakes to
Avoid
1. Setting and Forgetting Bids
Many sellers fail to adjust bids based on performance, leading to overspending or missed opportunities.
2. Ignoring Keyword Match Types
Using only broad match keywords can result in wasted ad spend. A balanced mix of broad, phrase, and exact match is essential.
3. Not Using Negative Keywords
Failing to exclude irrelevant search terms can drain your budget quickly. Always add negative keywords to filter out low-quality traffic.
4. Relying Solely on Automation
While automated bidding can be effective, relying on it entirely can lead to suboptimal performance. Regular performance reviews are necessary.
How to Optimize Your PPC Budget
Efficiently
Setting a Realistic Daily Budget
One of the first steps in budget optimization is setting a realistic daily budget. Starting with a conservative budget and gradually increasing it based on performance allows you to test different strategies without the risk of overspending. Monitoring daily spending is crucial to ensure that your campaign remains profitable and does not exceed your target advertising cost of sales (ACoS).
Allocating More Budget to High-
Performing Campaigns
Allocating more budget to high-performing campaigns can significantly improve results. Identifying which keywords and ad groups generate the best return on investment allows you to shift more funds toward those areas. Gradually increasing bids for keywords that consistently convert ensures that you are capitalizing on successful strategies while avoiding wasted ad spend on ineffective keywords.
Reducing Spend on Low-Performing
Keywords
Reducing spend on low-performing keywords is another critical step in budget optimization. Regularly auditing your campaigns helps you identify underperforming keywords that have high costs but low conversions. By pausing or lowering bids on these keywords, you can free up your budget for more effective strategies. Testing negative keywords and refining targeting can also help eliminate irrelevant traffic and improve overall campaign efficiency.
Using Portfolio Budget Caps for
Better Control
Amazon’s portfolio budget caps feature is a useful tool to prevent overspending while ensuring that your funds are allocated strategically. Setting a maximum budget cap across multiple campaigns helps maintain control over spending while optimizing performance across different ad groups. This feature is particularly useful for sellers managing multiple products and campaign types, as it ensures a balanced distribution of ad spend.
Understanding Amazon PPC
Match Types for Better Bidding
Broad Match and Its Advantages
Broad match provides the widest reach among the three match types, allowing your ads to appear for search terms that are loosely related to your targeted keywords. This approach can help increase visibility and generate traffic, but it may also lead to irrelevant clicks, resulting in wasted ad spend. Broad match is best used when testing new keywords or expanding your audience reach.
Phrase Match for More Precise
Targeting
Phrase match offers a middle ground between broad and exact match. Ads appear for searches that contain your keyword in the exact order, though additional words can be included before or after the phrase. This match type allows for more precise targeting while maintaining some flexibility. It is particularly effective for balancing reach and relevancy, making it a strong choice for sellers looking to refine their audience.
Exact Match for High-Converting
Keywords
Exact match provides the most control over your ad targeting by ensuring that your ads only appear when shoppers search for your exact keyword or close variants. This match type minimizes wasted ad spend on irrelevant clicks but limits exposure compared to broad and phrase match. It is best used for high-converting keywords that have already been tested and proven to drive sales.
The Role of ACoS (Advertising
Cost of Sales) in Bidding Strategy
Calculating ACoS for Profitability
ACoS is one of the most important metrics in Amazon PPC, as it determines the profitability of your campaigns. It is calculated using the formula:
ACoS = (Total Ad Spend ÷ Total Ad Revenue) × 100
A lower ACoS indicates that your ads are generating sales efficiently, while a higher ACoS suggests that you may be spending too much on ads relative to revenue.
What Is a Good ACoS?
Determining what qualifies as a good ACoS depends on your business goals. A low ACoS, typically below 20%, is ideal for maintaining strong profit margins. A moderate ACoS, ranging from 20% to 40%, balances profitability with growth, while a high ACoS above 40% is often used for brand awareness or aggressive expansion. Understanding your break-even ACoS—where ad spend equals profit margin—is crucial for making informed bidding decisions.
Using ACoS to Adjust Bids
Monitoring your ACoS allows you to make necessary adjustments to your bidding strategy. If your ACoS is too high, consider lowering bids on expensive keywords or refining your targeting to improve conversion rates. Conversely, if your ACoS is low and profitability remains high, increasing bids on well-performing keywords can help scale your sales without significantly impacting margins.
By integrating these strategies into your Amazon PPC campaigns, you can create a well-optimized bidding approach that maximizes return on investment while avoiding costly mistakes.
Leveraging Dayparting for Smarter
Bidding
What Is Dayparting and How Does
It Work?
Dayparting, also known as ad scheduling, is the practice of adjusting your PPC bids based on the time of day when shoppers are most likely to convert. Instead of running ads 24/7, sellers can analyze performance data to determine peak shopping hours and allocate their budget more effectively during those times.
Identifying Peak Shopping Hours
Amazon’s advertising reports provide insights into when your ads receive the most clicks and conversions. By identifying peak shopping hours, you can increase bids during high-converting periods while reducing or pausing ads during low-traffic hours. For example, if your sales data shows that customers are most active between 6 PM and 10 PM, you can set higher bids during this window to maximize conversions.
Reducing Wasted Ad Spend During
Low-Performing Hours
Running ads at all hours can lead to wasted ad spend, especially if shoppers are clicking on ads but not making purchases. By lowering bids or pausing ads during low-performing hours, you can prevent unnecessary spending and improve overall campaign efficiency. This approach is particularly useful for sellers with limited budgets who need to maximize every advertising dollar.
Automating Dayparting for Better
Results
Manually adjusting bids throughout the day can be time-consuming, but automation tools can simplify the process. Amazon’s API and third-party PPC management tools allow sellers to schedule bid adjustments automatically. This ensures that you are always bidding strategically based on real-time performance data, ultimately improving ad efficiency and return on investment.
By incorporating dayparting into your Amazon PPC strategy, you can optimize your budget, reduce wasted ad spend, and improve conversion rates by targeting shoppers at the most opportune times.
Which Strategy is Right for You?
The best Amazon PPC bidding strategy depends on your experience, budget, and campaign goals.
If you want full control and are willing to optimize bids regularly, manual bidding is the best choice.
If you prefer a hands-off approach and have a larger budget, automated bidding can save time while optimizing for conversions.
If you want the best of both worlds, a hybrid approach using both strategies can help maximize performance.
Regardless of the approach, continuously monitoring your PPC performance and making data-driven adjustments is key to success.
Want to improve your Amazon PPC results? Start experimenting with both bidding strategies today and find what works best for your business!
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