Imagine standing at the crossroads of Amazon advertising, faced with countless bidding strategies. Amazon's "Suggested Bid" feature appears as a lighthouse, promising to guide your way. But does this beacon truly lead to success, or might it steer you toward treacherous waters?
While automated PPC tools hold undeniable appeal, not all deliver their promised results. Today, we examine Amazon's Suggested Bid feature, revealing whether it serves as a valuable assistant or a potential obstacle.
Understanding Amazon's Suggested Bids
Amazon prominently displays Suggested Bids alongside manual bid settings, implicitly stating: "This is what you should pay for keywords!" At first glance, this convenience seems undeniable. Amazon claims these suggestions reflect "estimated values based on bids used by other advertisers for similar products."
Yet critical questions emerge upon closer examination:
- Who are these "other advertisers"? Do they share your business scale, target audience, and product quality?
- Do their objectives align with yours? Are they prioritizing maximum visibility or higher conversion rates?
While Amazon's Suggested Bids aim to secure clicks, clicks don't guarantee sales. Products with superior conversion rates can justify higher bids to capture greater market share. Conversely, lower-converting products following suggested bids risk competitive disadvantage.
The feature becomes more perplexing when hovering over the Suggested Bid, revealing a range that Amazon describes as helping advertisers "get started." While potentially useful for PPC beginners, experienced sellers may find this guidance overly vague.
Who Should Approach Suggested Bids With Caution?
Amazon sellers typically fall into distinct strategic categories. Two types should exercise particular caution:
- Negligent Natalie: These time-strapped sellers might apply Suggested Bids indiscriminately across campaigns. However, these recommendations aren't universal solutions and may create missed opportunities or adverse effects.
- Anxious Andy: These unconventional thinkers might reject Suggested Bids entirely, opting for extreme highs or lows without data support. While innovative, this approach risks significant losses. For Andys, focusing on personal analytics proves more effective.
Who Can Benefit From Suggested Bids?
Suggested Bids offer legitimate value for certain advertisers:
- PPC newcomers unfamiliar with average cost-per-click (CPC) metrics
- Sellers needing competitive benchmarking
However, these suggestions represent starting points, not final answers. A prudent approach begins at the range's lower end, gradually increasing bids until achieving optimal performance. Ultimately, marketers should aim to surpass Suggested Bids through strategic optimization.
Bidding Strategy: Beyond Simple Numbers
Effective bidding involves more than numerical adjustments. Amazon lacks insight into your specific business circumstances and objectives. Relying solely on Suggested Bids provides incomplete perspective, potentially causing missed opportunities.
Practical Findings: The Reality of Suggested Bids
Extensive testing reveals nuanced behaviors in Amazon's Suggested Bids:
- Product-dependent fluctuations: Adding or removing products from ad groups causes Suggested Bid adjustments, indicating product quality and relevance influence recommendations.
- Amazon's internal scoring: Evidence suggests Amazon indexes products similarly to Google's quality scoring, adjusting bids based on perceived product value.
Consider this hypothetical conversion rate scenario for top sponsored products:
- Position 1: 15% conversion
- Position 2: 10% conversion
- Position 3: 5% conversion
Suggested Bid ranges become meaningless without conversion rate context, potentially allowing higher-converting competitors to dominate.
Additional testing reveals abnormal Suggested Bids for irrelevant keywords. Experiments showed:
- Adding vegan supplement keywords to men's grooming campaigns caused Suggested Bid spikes
- Adding men's grooming terms to supplement campaigns produced identical effects
This behavior suggests Amazon charges premiums for irrelevant keywords rather than basing suggestions purely on competitor activity.
Effective Bid Setting Strategies
While Suggested Bids provide temporary solutions for inexperienced advertisers, most sellers find limited value—or potential harm—from relying on them. Common mistakes include:
- Importing irrelevant keywords from external tools
- Applying Suggested Bids without customization
Superior approaches involve creating feedback loops using campaign-specific data to understand how bids affect performance metrics. Through continuous testing and optimization, sellers develop tailored strategies that outperform generic suggestions.
Remember: Amazon's Suggested Bids offer directional guidance, but true navigation requires your strategic oversight.