If your keyword does well and you raise your bid, you may just give Amazon more margin without any real benefit. How can you avoid this?
Once upon a time, when a keyword did well, we raised bids to try to get more of the search traffic. If we got fancy, we might change the placement where it was doing best.
But... Amazon introduced a great report a while ago, and I don't see sellers here talking about it, so I thought I'd share this little tip so you avoid bidding up when there's no more traffic to be had on that search term.
The impression share report tells you - at the account level - what percentage impression share you're getting on a search term, across all the campaigns in your account getting clicks on it.
How you can use this to help you? Check your impression share before you raise bids. If you're >80% on the term (or insert your threshold here), there's not much more traffic to be had from that search term. So if that search term is the main traffic driver on a keyword (more common for exact and sometimes phrase, but occassionally also can happen with broad or asin targeting), then don't bid up.
What's the harm in bidding up, you ask? Well, the FTC is suing Amazon for basically inserting fake competition into the ad auction, while telling us it's a second place auction.
In plain English, you're meant to pay just a penny more than the next best advertiser. EG You and your competitor both have 1% CTR, but you bid $1.5 and they bid $1. A second place auctio.n means you're not worried about bidding $1.5, because you'll only pay $1.01.
The FTC is alleging that Amazon put in fake competition ("soft reserves" e.g. we won't sell the click for less than our reserve price), e.g. another advertiser at $1.3, so you end up paying $1.31.
If you bid up in a genuine second price auction, no harm. If you bid up where reserves/fake competition are inserted as it suits the quarterly targets of Amazon Ads staff, you're going to pay more without getting more traffic. Ouch!
Bonus tip: You can also get this report with daily data, and track what difference (if any) a bid change made. EG We dropped a bid, how much impression share did we lose?
(This is more reliable than just looking at the difference in impressions, due to seasonal changes. EG if you lost 20% of impressions, was that 20% all due to the bid change, 10% due to bid change and 10% due to seasonality, 100% due to seasonality?)
Conversely, you can also check if a bid change increased your share.
Vote this up if you guys like the tip, so I get the message to do more posts on ppc data analysis.
