Setting the right ad group default bid for your manual campaigns is crucial for success with SP Optimizer. We use this ad group default bid as the starting point for any new keywords that you add to your campaigns and then bid up and down from there for a variety of reasons.
Selecting a bid that is too low can cause you to underspend and not see performance even from keywords that have a history of converting well. Selecting a bid that is too high can result in overspending and prevent you from hitting your ACoS targets.
The formula for calculating the ad group default bid is as follows:
Review the ACoS Target you have selected for that campaign based on margin and objective.
Determine the average selling price for the products in that particular ad group.
Click into the campaign to review what your conversion rate was over the past 30 days.
Let's work through a calculation together!
Lisa is setting up a new manual campaign. She sells headphones at $30 a pair. These headphones are new and in the launch phase, so she has an ACoS Target of 60% for the campaign. She looks at the mirror automatic campaign and sees the 30-day conversion rate is 10%.
This is how Lisa would determine the Ad Group Default Bid for her manual campaign:
Ad Group Default Bid = (.6) x (30) x (.1) = $1.80
Try these additional strategies based on the objective of your campaigns:
- Launch: Consider increasing the default bid by 30-50%. In the above example, Lisa would set an ad group default bid between $2.34 and $2.7. Note: This can cause increased spend!
- Growth: Leave the default bid as-is, or increase by 30%. In the above example, Lisa would set an ad group default bid between $1.80 and $2.34
- Profitability: Leave the default bid as-is or decrease by 30%. In the above example, Lisa would set an ad group default bid between $1.80 and $1.26. Note: This can decrease spend and cause a loss of impressions and decrease in sales volume!
You may also receive suggested bids from Amazon for certain campaigns with data. These can be helpful starting places as well, especially in categories with high competition that require higher levels of spend.
If you are setting up a manual campaign for the first time, and don't have data to use, you can use your performance metrics from the mirror automatic campaign.