Bid floors are a great way to increase spend and visibility on a given campaign. They're especially effective when launching a new product, targeting competitors, or selling in competitive categories. However, they should be used sparingly and should not be a permanent measure.
What is a bid floor?
A bid floor is the minimum amount our algorithm will bid on a keyword (if manual) or an ad group (if automatic) in a given campaign. For instance, if you set a bid floor of $0.50, you are telling our algorithm, that you do not want to bid lower than $0.50, despite the performance of a keyword or ad group.
Learn more about how changes in ad performance affect our bidding algorithm here.
Our default bid floor value is $0.05, similar to what Amazon will default to in Seller/Vendor Central. When you enable bid automation by setting your MACS targets in Flywheel, you have the option to increase the bid floor from the $0.05 default value, depending on your goals for that campaign.
We do not recommend increasing your bid floors as a regular practice since this may result in overspending. However, if used properly, bid floors can help to speed up the initial discovery period of a new campaign and deliver performance, data and results sooner. Bid floors should be used as a temporary measure.
Common Uses and Situations for bid floors:
- Highly competitive and saturated categories: Highly Saturated Categories
- Supplements, Health & Beauty, Cell Phone Accessories, Tea, Grocery, Pet Supplies
- Product Launches
- Targeting competitors directly
- Automatic campaigns that are not generating enough data
- Sponsored Brands Campaigns
- Products that need a little more visibility
How do you know if you need to increase the bid floor?
If our algorithm is not bidding as aggressively as you would like and you’ve already tested using higher MACS targets, you may want to increase your bid floor. You can determine this by reviewing your bid change history in the 'change history' tab and asking yourself:
Are a large number of bids for the given campaign indicating 'low click data' adjustment reasons?
Are the bids lower than the average CPC for the category? (an easy way to find this is by clicking 'view details' under the campaign)
Are you having trouble generating spend on the campaign?
Where you can you set bid floor?
You can find your bid floor minimum thresholds within the campaigns sections under 'Advertising'. This can be set on the campaign level to align with your strategy for those products.
Bid floors should be set according to your average CPC for the category. If you know the average CPC for a product in the supplement category is $3.50, consider setting your bid floor at $2.00. If ACoS is a concern, its always best to start low.
Bid floors should be used as a temporary measure. If used for an extended period of time, your campaign ROI will suffer, resulting in high ACoS and spend.
Once you've set your floor, we recommend reviewing the bid change history every 7-14 days to evaluate the behavior of the bidder. If we’re still bidding too low for your category, considering increasing the floor in small increments ($0.25) or simply leave it in place for a longer period of time.
When evaluating performance you must consider the attribution window Amazon uses (Sponsored Products is 7 days and Sponsored Brands is 14 days). Since there is an attribution lag, you will need a longer window to check for sales. Making too many changes in a short period of time will make it difficult to evaluate if the changes you made are helping you trend towards your goals.
Be mindful of the bid ceiling we have in place across all accounts. The default bid ceiling is $5.00 for Sponsored Products and $50.00 for Sponsored Brands. If you’re in a highly competitive category where it may be warranted to bid higher than these ceilings, please request to increase your bid ceiling with our Support Team within Expert Chat.