Introduction: The Philosophy of Kapoq’s Bid Automation
Kapoq’s bid automation is designed to offer flexibility, transparency, and predictability in managing your PPC campaigns. Unlike traditional “black box” tools, our system provides clear logic and reasoning for all bid calculations, ensuring you can see and understand the math behind each decision.
This system is intended to complement your expertise rather than replace it, offering powerful levers to control behavior at all levels while still aligning with your strategies. Kapoq uses advanced modeling techniques, including decaying weight on data, to forecast performance and calculate optimal bids without the restrictions of a fixed lookback period.
Key Features and Benefits
Customizable Strategies: Define overarching constraints for bid adjustments that align with your business goals.
Transparency: View the calculations behind every bid to ensure predictability and accountability.
Dynamic Weighting: Recent data is weighted more heavily than older data, allowing for responsive and accurate bid adjustments.
Dayparting: Optimize bids based on hourly consumer behavior using Amazon Marketing Stream data.
Advanced Overrides: Maintain control with the ability to override strategies or adjust automation on specific campaigns, ad groups, or targets.
Understanding Kapoq’s Bid Automation and Strategy Creation
What is a Strategy?
A Strategy groups campaigns with similar goals and parameters, enabling efficient management of bids and constraints. By consolidating campaigns under a unified strategy, you can maintain consistency while fine-tuning inputs as needed.
Strategies are the foundation of Kapoq’s bid automation. They define overarching rules and constraints for campaigns, ad groups, and targets.
Setup:
Enabled at the brand account level.
Assign parameters like Max ACoS, Initial Conversion Rate (CR), and Initial Average Order Value (AOV).
Consider grouping strategies by Category, Competitor, or Branded structure as starting points. More granular strategies based campaign type or product groups (products with similar unit economics) can be just as effective if not more effective, while providing even more granular control.
Key Strategy Parameters
Max ACOS: Acts as a guardrail to cap bids based on acceptable advertising cost of sales.
Primary driver of bid aggression.
Higher values result in more aggressive bids.
Recommendation: Start near your historical or target ACOS. Avoid drastic reductions to prevent limiting your reach.
E.g. Increasing Max ACOS from 10% to 20% effectively doubles your bid.
Initial Conversion Rate (CR): Drives initial bid calculations for low-data targets. Aggressive settings can accelerate data collection.
Starting point for forecasting CR.
Higher values increase bid aggression and can accelerate testing of new targets.
Recommendation: Use realistic values, if not values lower than historical conversion rate performance to reduce negative effects that result from higher starting bids. Avoid overly optimistic settings unless the goal is to quickly collect data.
Initial Average Order Value (AOV): Works alongside conversion rate to influence bid aggression and expected return.
Used as a starting point for forecasting AOV.
Higher values lead to more aggressive bidding.
Recommendation: Begin with recent historical values to ensure accurate initial settings. If you have campaigns that contain products with very different price points, input an initial AOV that's between those prices.
Tip: As data accumulates, the system transitions smoothly from using initial values to leveraging historical performance. Higher-volume campaigns learn faster and rely less on initial guesses.
Advanced Options and Pro Tips
Min Clicks: Delays automation until a target receives a specified number of clicks, helping avoid premature adjustments. Ideal for new or low-volume targets.
Min Bid and Max Bids: Kapoq will obey these settings effectively limiting the bid and limiting Amazon from exceeding either.
Auto Campaign Management:
Auto campaigns distribute spend across a broad range of search terms, leading to potential spikes in spend if bids increase drastically.
Consider adjusting strategy parameters so the Kapoq bid does not exceed the Auto Campaign Bid by significant amounts, opening up spend to serve ads on a wider range of search terms, unless desired.
Use overrides to manage spend effectively or treat auto campaigns as keyword harvesters rather than ACOS-managed entities.
Step-by-Step Instructions for Setting Up Bid Automation
Plan Your Strategies:
Group campaigns by similar goals and product attributes (e.g., Max ACOS or product price points).
For campaigns with varied price points, set an initial AOV that averages the range.
Create a Strategy:
Use Kapoq’s Walkthrough option for step-by-step guidance.
Input key parameters (Max ACOS, Initial AOV, Initial CR).
View detailed instructions with screenshots here - Kapoq Strategy Breakdown.
Assign Campaigns:
Attach campaigns to the strategy. Each campaign inherits the strategy’s parameters.
Recommend returning to the Strategy to review your strategy parameters against the realized campaign performance. This can be a helpful step in fine tuning strategy aggression levels. E.g. if campaign is operating at 30% ACOS, but strategy Max ACOS is set to 10% ACOS, you will likely see a significant adjustment in Kapoq’s bid recommendation, reducing bids across the board, and that may not be the desired result.
Review Ad Bid Approvals:
Monitor the Ad Bid Approvals tab for suggested Kapoq bid changes.
Use hover tools to understand how initial values influence calculations versus realized data.
Pay special attention to targets with limited data; initial settings will have a stronger impact.
Process these suggestions manually before enabling full automation.
Refine Parameters:
If bids are too low or high, adjust Max ACOS, Initial AOV, or Initial CR. Use bid logic examples as a reference.
Enable Full Automation:
Once comfortable, activate Automate Bid Approvals to fully automate the process. Required for dayparting.
Enable Dayparting Automation:
Rely on Kapoq’s Dayparting algorithm for the adjustment of bids up or down depending on the hour of day and day of week in order to optimize performance.
Campaign/Ad Group/Target-Level Adjustments:
Override parameters for specific campaigns, ad groups, or targets as needed (e.g., for ranking campaigns).
Kapoq Bid
Kapoq's bid is based on your max ACOS and the historical performance of that keyword. It's not tied to a fixed window in the past, we're trying to set the bid to a level that matches with the predicted performance of that keyword, and we'll use the entire performance history (available to Kapoq) to generate those forecasts. The forecast itself is weighted towards more recent data in that history, but there's not a fixed lookback (but keywords with more volume will effectively have shorter lookbacks than keywords with less volume, because of the amount of data available each day).
This leads to better performance as we don't have arbitrary date cutoffs and run the strategy more continuously, but unfortunately does make it hard to put a number on "what date range is it trying to hit the target ACOS"--the long and short of it is that it always is trying to hit that level and adjusting bids to continuously match it.
Example Strategy Inputs: Max ACOS: 30% * Initial AOV: $20.00 * Initial CR: 5.00% = Kapoq Starting Bid: $0.30
The 3 parameters mentioned above (Max ACOS * Initial Conversion Rate * Initial AOV) drive the starting bid. Multiple those 3 parameters together and play around with scenarios to generate an initial starting bid. Tinker until comfortable and then assign strategies to campaigns. Consider using a calculator to set up strategies.