Can You Bid Against Yourself on Amazon PPC? Here’s What You Need to Know

Think you’re wasting money by bidding on the same keyword in multiple Amazon ad campaigns? Many sellers worry that duplicate keywords drive up their own costs due to the auction-based system.

This is a common concern, but the reality is simpler than you think. You don’t need to spend hours combing through your account to eliminate every single duplicate keyword.

In this article, we’ll explain how Amazon’s ad auction actually works, why you’re not bidding against yourself, and what to focus on instead to optimize your PPC campaigns. Let’s get started.

Amazon Campaigns Aren’t Competing Against Each Other

The biggest misconception is that your campaigns are directly competing in the ad auction. Here’s what’s happening: Amazon’s ad auction operates at the account level, not the campaign level.

This means Amazon considers all your bids across all your campaigns as a whole when determining which ads to show.

Let me break this down with an example. Say you have the keyword “coffee mug” in two different campaigns. In Campaign A, your bid is $1.20, and in Campaign B, it’s $1.50. Amazon will recognize that you are the highest bidder overall and then go from there.

The campaigns themselves aren’t fighting each other. The highest bid from your account will compete with the bids from other sellers.

Amazon’s Second-Price Auction: How It Works

Amazon uses a second-price auction. This means you only pay one penny more than the second-highest bid.

Here’s why that matters. Let’s say Andrew bids $1.00 on a keyword, and you bid $0.90. Andrew only has to pay $0.91, even though his bid was higher.

Amazon does this to encourage higher bids. If sellers knew they’d always pay their full bid, they’d be afraid to bid aggressively. This system lets you bid higher to guarantee the top spot without necessarily paying that full amount.

Real Example: Brand Defense Keywords

We’ve seen accounts where sellers were bidding $25 on their brand defense keywords in multiple campaigns but only paying $0.50 per click.

If duplicate keywords caused self-competition, they would be paying much closer to the actual $25 bid!

The fact that they were paying only $0.50 proves that Amazon isn’t making them bid against themselves.

What About That $145 CPC?

You might see some crazy-high Cost-Per-Click (CPC) numbers in your reports. For instance, someone recently posted about a $145.39 CPC on LinkedIn.

Here’s what’s likely happening. This extreme CPC means that someone else was bidding nearly that much on the same keyword. It could be a Sponsored Display campaign with very low clickthrough rate, or a category that has a very high average price of the product being advertised.

The high CPC wasn’t caused by bidding against themselves; it was caused by another competitor driving up the price.

Don’t Obsess Over Duplicate Keywords

While keyword isolation can be a valid strategy for certain situations, it’s not necessary to avoid “bidding against yourself.”

There may be other reasons to isolate keywords into individual campaigns, such as more granular control over budget or ad copy.

But the fear of inflating your own costs shouldn’t be one of them.

Focus on Bid Ceilings Instead

Instead of worrying about duplicate keywords, focus on setting appropriate bid ceilings.

Here’s why: Bid ceilings prevent your automated bidding systems from running wild and bidding excessively high amounts, especially if one of your competitors is bidding aggressively.

If you don’t set bid ceilings, you could get caught off guard and start paying exorbitant CPCs if a competitor starts raising their bids.

How to Calculate Bid Ceilings

• Determine your target ACOS: What’s the maximum you’re willing to spend to acquire a customer?
• Calculate your break-even ACOS: Factor in your product costs, fees, and desired profit margin.
• Set your bid ceiling: Based on your target ACOS and conversion rate, determine the maximum bid that still makes sense for your business.

Key Takeaway: Relax and Focus on What Matters

You don’t need to stress about having the same keyword in multiple campaigns. Amazon’s auction system is designed to prevent self-competition.

Focus on the things that actually impact your PPC performance:

• Setting appropriate bid ceilings
• Optimizing your product listings
• Improving your keyword targeting
• Analyzing your search term reports

By focusing on these core elements, you’ll see much better results than trying to eliminate every duplicate keyword in your account.

Ultimately, you don’t have to worry too much about bidding against yourself on Amazon PPC. Now, go optimize those campaigns!

Key Discussion Points from the Episode

Here are some of the most valuable insights Andrew and Stephen shared during the full episode discussion:

Which I think everyone knows this, but what a second price auction means is you only pay one penny more than the second highest bid. So if Andrew’s bidding a dollar and I’m bidding 90 cents on a keyword, and we’re going head to head, he only has to pay 91 cents. And it makes sense why Amazon would do that, right?

If they always made you pay your bit, your, your bid, Andrew would be afraid to bid $10 because what if Amazon charges him $10, but if he knows $10 is basically just guaranteeing him the top spot and he’s only going to pay one penny more than number two and then if I’m bidding a dollar, Andrew’s now paying a dollar and one cent even though his bid was $10. That’s why you can have these really high Bids and lower CPCs if you know the second price auction, the second highest bidder is quite a ways to blow you. Now, the way to really prove this point, because we’ve seen accounts where people have these runaway bids because they’ve got these automated systems that are just increasing to infinity and beyond.

And we, we had like a brand, for example, where they were bidding $25 on their brand defense keywords in multiple campaigns and they were only paying like 50 cents per click. Well, if they have this, the brand defense exact match keyword and the identical keyword that’s Also exact match, that’s 25 on both of those in two separate campaigns, their bid should be 25 or 2499. So the fact that it wasn’t kind of proves that point there.

Because what is fact is that Amazon’s second price auction and so the way it would work is that both of those keywords would have $25 CPCs if that was the case. So I think that basically answers it.

Alexa, play that Amazon Ads podcast. Which one would you like to hear? Okay, now playing that Amazon Ads podcast.

These gentlemen are completely changing the game. After listening to that Amazon Ads podcast, my ads are finally profitable. I also heard they’re pretty cute.

Guys, we’ve got a short and sweet episode for you today. Just very quickly answering the question can you bid against yourself on Amazon PPC? What a lot of people think is that if you have the same keyword in two different campaigns then because of the auction based system you’re going to be increasing the bids for yourself and therefore you need to be at extra sure that you don’t have any duplicate keywords anywhere in your account.

Otherwise you’re increasing your own CPCs. So Andrew, what do you say to that?

Yep, that pretty well proves it. Stephen And I always have one other thing. I just saw this post on LinkedIn that I thought was pretty funny.

It was from Isaac Gross, or Gross, I’m not sure how you say his last name, but he posted this screenshot here, this campaign that got $145.39 CPC on one of his accounts that he was auditing or managing or something. So, you know, that just means that at some point somebody also was upbidding and or was bidding $145.38 on whatever keyword that was. And I think there’s a pretty high AOV products.

But still that’s what it took. It took that other competitor cranking those bids up to really force you to get charged that. You think that might have been like a VCPM campaign with like a super low click through rate that when calculating the CPCs it went astronomically high?

Could have been like a sponsor display campaign that was off site. Could have, could have. It didn’t get too specific in it.

I’ve seen that. That’s the only time I’ve ever seen CPCs that high. Pretty wild.

This article is based on Episode 103 of That Amazon Ads Podcast. Subscribe for weekly Amazon PPC strategies.