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Glossary
Glossary

Bidding Strategy

Bidding strategy is the per-campaign setting that controls how Amazon adjusts your bid in the auction — Fixed Bids, Dynamic Bids (Down Only or Up and Down), or Rule-Based Bidding. It determines the price range, not just the headline number.

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Bidding strategy in Amazon Advertising is the per-campaign setting that tells Amazon how to translate your submitted bid into an actual auction bid. It looks like a one-click toggle in the campaign builder; in practice it determines the range of prices Amazon will pay on your behalf in any given auction.

Three families of strategy exist: Fixed Bids, Dynamic Bids (the Dynamic Bidding modes), and Rule-Based Bidding. They are mutually exclusive per campaign.

Fixed Bids

Amazon uses your submitted bid as-is, with no real-time shading. A €0.60 bid is always submitted as €0.60 (before placement modifiers).

  • Use case. Brand-defence campaigns on your own brand name where conversion probability is uniformly high; campaigns where you want a clean, predictable spend curve for reporting.
  • Trade-off. You miss the implicit lift from auctions where Amazon's model knows conversion likelihood is high — and overspend in auctions where likelihood is low.

Dynamic Bids

Amazon shades your bid up or down in real time based on its predicted conversion probability. Two sub-modes: Down Only and Up and Down. See Dynamic Bidding for the full breakdown.

Rule-Based Bidding

Amazon's algorithm autonomously adjusts bids to chase a user-defined ROAS or ACOS target, ignoring most manual bids. See Rule-Based Bidding.

Choosing strategy by campaign role

Campaign roleRecommended strategyRationale
Branded defenceUp and Down (or Fixed)CVR uniformly high; you want every click
Launch / hockey stickDown OnlyNeed impressions for organic ranking; control spend
Auto / broad harvestDown OnlyUnknown CVR by search term; protect downside
Manual exact, high dataUp and DownProven CVR; capture high-intent tail
Competitor conquestDown OnlyLower CVR than category; control overpayment
Sponsored Display remarketingDown OnlyCross-sell, not new acquisition

Pairing strategy with base bid

The bidding strategy decision and the base bid decision must be made together, not in sequence. A €0.50 base bid under Down Only and a €1.00 base bid under Up and Down can land at the same effective average CPC. The two levers are coupled — never optimise one in isolation.

Common mistakes

  • Defaulting to Up and Down on every campaign. Looks attractive ("Amazon optimises my bids") but on low-data campaigns the +100% shading lands on clicks that don't convert. Start every campaign on Down Only; promote to Up and Down only after ≥30 conversions on the keyword.
  • Leaving Rule-Based Bidding active without realising it. The toggle is buried; many accounts have it on by accident. Audit every campaign's bidding strategy once per quarter.
  • Switching strategy mid-test. Changing from Down Only to Up and Down during a 14-day test invalidates the test. Pick a strategy, hold it for the full test window, then iterate.
  • Treating strategy as separate from base bid. A correct bid under the wrong strategy still produces wrong outcomes. The two decisions are one decision.

Related terms

Bid (CPC Bid)
A bid is the maximum cost-per-click an advertiser submits for a keyword or product target in an Amazon Advertising auction. It is the ceiling — the realized price paid per click is the CPC.
Dynamic Bidding
Dynamic Bidding is Amazon's real-time bid-shading mechanism. Down Only reduces the bid by up to 100% when conversion is unlikely; Up and Down also raises it by up to 100% when conversion is likely.
Rule-Based Bidding
Rule-Based Bidding is the Amazon bidding strategy where the platform autonomously adjusts bids to chase a user-defined ROAS or ACOS target, overriding most manual bid inputs. Convenient for hands-off accounts, opaque for accounts that need diagnostic transparency.
Target ACOS
The maximum ACOS a campaign can run at while still hitting the product's profit goal — derived from gross margin minus desired contribution margin.
Amazon PPC
Pay-per-click advertising on Amazon — Sponsored Products, Sponsored Brands, and Sponsored Display campaigns where advertisers bid for placement and only pay when a shopper clicks.
Consideration Purchase
A consideration purchase is a category where shoppers research before buying — multi-session, multi-touchpoint journeys, often higher price points. Consideration categories require different PPC strategy: longer attribution windows, retargeting weight, and content-led discovery alongside direct response.
Private Label
Private label is the business model of sourcing a generic product, branding it as your own, and selling it under your brand — typically via Amazon FBA. The seller owns the brand, the listing and the customer perception; the manufacturer is interchangeable.
Fixed Bid
Fixed Bid is the Sponsored Products bidding strategy in which Amazon submits your base bid unchanged to every auction — no dynamic shading up or down. It is the only strategy that gives the operator full control of the bid; everything else delegates control to Amazon's CVR-prediction model.

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