It is a type of strategy in which the algorithm looks for the right balance between exploration and optimization for your ACOS target.
The algorithm bids on products and keywords based on your historical data, current strategy, and tactic. It splits keywords and products into different campaigns. The algorithm calculates keyword targeting bids based on the last 2 months.
When a search term converts to one of our keywords, the algorithm will follow exactly the same process regardless of match type (except for exact):
Catch the search term
Add it as an exact keyword
Learns and optimizes the bid on the keyword
Negative target the search term in all the other campaigns related to the strategy
Through this process, we are able to have full control and optimize each potential search term. This process is updated daily.
For each of your strategies, each keyword is managed at the parent ASIN level for your product group. At the same time, the algorithm calculates a bid according to the state of the strategy :
Historical conversion of the keyword for the associated parent ASIN
Competition on the keyword
ACOS target
Performance on other keywords/campaigns
With this type of management, the algorithm has an overview of the strategy and can modulate the bids on your best keywords. It avoids overspending and keeps this budget to reinvest in other potential keywords. It gives a chance on keywords considered bad.
What happens when I change the ACOS Target?
Whenever you change the ACOS target of a strategy, the algorithm adjusts the bids in proportion. Then it starts the optimization again.
You should avoid big swings in the ACOS target and wait a couple of days each time you want to change the ACOS target.
You should adjust the ACOS target softly. The algorithm is very sensitive to any change in the ACOS target. Here are a few things that happen when the ACOS target is different than the ACOS observed.
When the ACOS observed is highly superior to the ACOS target. The algorithm cuts the traffic and slowly test your historical search terms
When the ACOS observed is superior to the ACOS target. It underbids and readjusts the following day based on the conversion observed (if the bids are not competitive, the algorithm may miss interesting conversion)
When the ACOS observed is inferior to the ACOS target. It is aggressive on your historical search terms
How does the algorithm handle keyword targeting without data?
If an exact keyword in our default optimization campaign does not convert over the last 2 months, the keyword is paused in the optimization campaign and fed back into the exploration campaigns.