Dynamic Bidding Up & Down on Amazon PPC: When to Use It

You’re running Amazon PPC campaigns, and you’re seeing the “Dynamic bids – up and down” option. You’re probably wondering, “When should I actually use this bidding strategy?”

This is a common question for Amazon sellers, and choosing the wrong bidding strategy can cost you money and tank your ACOS. The reality is, “Dynamic bids – up and down” isn’t always the best choice.

In this article, we’ll break down when to use “Dynamic bids – up and down,” when to avoid it, and how to make it work for you. Let’s dive in.

Understanding Dynamic Bidding on Amazon

Amazon offers three dynamic bidding options: “Dynamic bids – up and down,” “Dynamic bids – up only,” and “Fixed bids.” It’s important to understand the difference.

• Dynamic bids – up and down: Amazon will raise or lower your bids in real-time based on the perceived likelihood of a conversion.
• Dynamic bids – up only: Amazon will only raise your bids if they think a conversion is likely, but won’t lower them if they think a conversion is unlikely.
• Fixed bids: Amazon will use the exact bid you set, regardless of the likelihood of a conversion.

So, “Dynamic bids – up and down” sounds like the most flexible, right? Not always.

When to Use Dynamic Bidding Up & Down

“Dynamic bids – up and down” can be effective in specific situations. Here’s when it makes sense to use this strategy:

• When you have plenty of conversion data: If your product has a strong conversion history, Amazon’s algorithm has enough data to make informed bidding decisions.
• When you’re targeting broad keywords: Broad keywords often have a wider range of potential customers, so dynamic bidding can help you optimize for those most likely to convert.
• When you want to calculate recommended bid adjustments: If you’re short on time and want Amazon to handle bid adjustments for you, “Dynamic bids – up and down” can be a good option, especially when you are setting up a new campaign.

Example: Let’s say you’re selling a popular coffee maker. You’ve been running ads for six months, and you have a ton of conversion data. You’re targeting the broad keyword “coffee maker.” “Dynamic bids – up and down” can help Amazon find the best customers within that broad keyword and optimize your bids accordingly.

When to Avoid Dynamic Bidding Up & Down

Here’s when you should NOT use “Dynamic bids – up and down”:

• When you have limited conversion data: If you’re launching a new product or targeting very specific keywords, Amazon’s algorithm won’t have enough data to make accurate bidding decisions.
• When you need precise control over your bids: If you have specific ACOS targets or need to closely manage your bids, “Dynamic bids – up and down” can take away too much control.
• When you’re seeing poor performance: If your campaigns are already struggling, “Dynamic bids – up and down” might exacerbate the problem by further optimizing based on flawed data.

Example: You’re launching a new type of organic tea infuser. You don’t have much conversion data. Using “Dynamic bids – up and down” would be a mistake because Amazon doesn’t have enough information to make smart bidding decisions. You’d be better off with fixed bids or “dynamic bids – up only” while you gather data.

The Risk of Over-Lowering Bids

One of the biggest risks of “Dynamic bids – up and down” is that Amazon can sometimes lower your bids too much, resulting in missed opportunities.

Here’s what’s happening: Amazon’s algorithm might incorrectly assess the likelihood of a conversion and lower your bid, causing you to lose out on impressions and sales.

Think of it this way: You might be willing to pay \$1.00 for a click that leads to a sale. Amazon, thinking the sale is unlikely, lowers your bid to \$0.50. You miss the opportunity, and your competitor gets the sale.

How to Make Dynamic Bidding Up & Down Work

If you decide to use “Dynamic bids – up and down,” here’s how to make it work for you:

1. Start with a solid foundation: Make sure your product listings are optimized, your keywords are relevant, and you have a decent amount of conversion data.
2. Monitor your campaigns closely: Don’t just set it and forget it. Regularly check your search term reports, ACOS, and conversion rates to see how your campaigns are performing.
3. Adjust your bids manually: If you see Amazon lowering your bids too much or missing opportunities, don’t be afraid to override the dynamic bidding with manual adjustments.
4. Use bid multipliers strategically: Amazon lets you set bid multipliers based on placement (top of search, product pages). Use these to fine-tune your bidding strategy.

Example: You’re running “Dynamic bids – up and down” for your coffee maker. You notice that your ads aren’t showing up on the first page of search results. You can increase your “top of search” bid multiplier to ensure your ads are visible where customers are most likely to click.

Leverage AdLabs’ Automation with Control

AdLabs provides the perfect balance between automation and control. You can use our software to calculate recommended bid adjustments based on your specific ACOS targets while still maintaining the ability to override the system and make manual changes when needed. As Scott H. mentioned in his Trustpilot review, “AdLabs is by far the best… The software is robust but intuitive. Most importantly, results have been very good; TACOS is down significantly while sales are now happening across our entire catalog.”

Key Takeaway

“Dynamic bids – up and down” can be a useful tool, but it’s not a magic bullet. It works best when you have plenty of conversion data, when you are targeting broad keywords and want to automate some bid adjustments. Be sure to monitor your campaigns closely and make manual adjustments as needed. You can make Amazon PPC work for you!

Key Discussion Points from the Episode

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

It’ll it’ll happen eventually. I think it knows when you want to get out of bed and it like sits you up Yeah, it’s connected to your brain. It’s connected to your brain ship coming soon Yeah, but I think I think you know a lot of people are very nervous about this, but I think American ingenuity will Will come through and you know as a great ornbuffer that says never never bet against America and I think that rings true now And we’ll continue during true.

I think you have the brightest tech minds here Really what I think we need to fix is the raw materials supply chain Because even with all these tariffs and everything you still can’t source raw materials here At you know anywhere near overseas pricing so I expect that to dramatically shift as robotics takes hold And I think proximity to the end consumer in one day shifting is going to become the new norm But really the raw materials need to be sorted out For us to see a true American manufacturing boom and then maybe some additional incentives from the government, but We’re early. There’s so much opportunity and Really exciting time. So boom Well, thanks again Brett for coming on.

It’s always good to see you and we’ll see you again at episode 150 So we’ll catch you in a year Yes, sir. I do want to say super proud of you guys for adding 100 And the growth of your company is experiencing You guys are awesome and you deserve it and keep working hard see it on 50 All right, so guys we’ll see you next time on that Amazon ads podcast

This article is based on Episode 100 of That Amazon Ads Podcast. Subscribe for weekly Amazon PPC strategies.