Bidding Strategy Options
Whether your goal is to maximize efficiency or sales revenue, your bidding strategy and optimization levers should adapt. Here are a few scenarios for you to try based on your goals and/or challenges.
General Bidding Strategy Tips
Focus on the areas with greatest impact before drilling down. For example, you may want to edit your line item bid before editing product bids or separate products within multiple line items to maximize the minimum bid.
We recommend starting all your bids at 20% above the floor for maximum efficiency. The floor is the minimum bid set by the retailer for the category.
Make sure that you adjust bids progressively (if you change them). Make incremental changes versus drastic ones when possible (for example, no more than 10-15% at a time). Review the data after 7-10 days and modify as needed.
Align your line item optimizer to your objectives and desired KPIs.
Note that when using a Revenue or Conversion optimizer, the engine will take 7-10 days on average before reaching maximum efficiency. Performance may fluctuate during this period.
Goal and Bidding Tactics
See the following tactics to maximize efficiency, engagement, sales revenue, and/or units sold.
Maximize Efficiency
This is the most common Onsite Sponsored Products strategy. It can potentially decrease scale, coverage, and competitiveness in terms of share of impression, but it is very effective to get greater ROAS and sales revenue.
Recommended bidding tactics:
Set your line item optimizer to Revenue for the highest ROAS or to Conversions for the lowest Cost per Order (CPO).
Since the Revenue and Conversions optimizers modulate the CPC you enter to maximize performance, it is useful to set a CPC cap to make sure that your bid will not exceed the maximum amount you wish to pay. The CPC cap should always remain at least 30% above the bid you enter to allow the engine to optimize effectively.
Set your bids competitively to balance scale and performance (ROAS or CPO) targets.
Optimize bids with respect to your CPO targets: lower CPCs slightly to increase efficiency, or raise them to increase scale.
Maximize Engagement
This is an excellent strategy for upper funnel use cases such as new product launches, challenger brands, highly competitive categories, and promotion amplification. The engine will not optimize towards ROAS or CPO, but the tactics enable greater scale and competitiveness, as well as higher CTR.
Recommended bidding tactics:
Set the line item optimizer to Clicks.
Set bids competitively to make sure that your ads will deliver efficiently.
Optimize bids with respect to your ROAS targets while making sure that they are high enough to scale properly: slightly lower CPCs to increase efficiency or raise them if you are not scaling enough.
Maximize Sales Revenue
This strategy will potentially lower your scale and competitiveness but enables greater sales revenue.
Set the line item optimizer to Revenue.
Set bids to maximize scale and competitiveness while staying above KPI thresholds.
Since the Revenue optimizer modulates the CPC you enter to maximize performance, it is useful to set a CPC cap to make sure that your bid will not exceed the maximum amount you wish to pay. The CPC cap should always remain at least 30% above the bid you enter to allow the engine to optimize effectively.
Adjust your bids progressively and preferably at the product level: filter the top products by Spend and then slightly reduce any bids that have a ROAS below your threshold.
In general, slightly lower CPC to increase efficiency or raise CPC to increase win rates and therefore increase sell-through.
Maximize Units Sold
This strategy will potentially lower your scale and coverage, but enables greater units sold and lower CPO.
Set the line item optimizer to Conversions.
Set bids to maximize scale and competitiveness while staying above KPI thresholds.
Since the Conversions optimizer modulates the CPC you enter to maximize performance, it is useful to set a CPC cap to make sure that your bid will not exceed the maximum amount you wish to pay. The CPC cap should always remain at least 30% above the bid you enter to allow the engine to optimize effectively.
Optimize bids with respect to your CPO targets, preferably at product level: slightly lower CPC to increase efficiency or raise CPC to increase scale.