Managing bids is one of the most critical—and often overlooked—skills in Amazon advertising. When I started out, it was the only task I was told to focus on during my first week. It makes sense: bids directly influence who sees your products in a marketplace with thousands of competitors. But looking back, I wonder—was I taught the right way? If I could start over, how would I approach it differently?
How It Started: The Simplistic Approach
In my early days, bid management was boiled down to a single lever: the bid itself. The principle was simple:
ACOS too high? Decrease the bid by X%.
ACOS looking good? Increase the bid by X%.
At its core, this method worked because it adhered to the foundational rule of advertising: push what works and pull back on what doesn’t. However, this approach is now outdated. The game has changed, and so have the tools available to advertisers.
How It’s Evolved: New Metrics and Tools
Amazon has since introduced placement modifiers, which have added a layer of nuance to bidding strategies. These modifiers allow you to control where your ad appears by increasing your bid for specific placements like:
Top of Search (TOS)
Rest of Search (ROS)
Product Detail Pages (PDP)
Placement modifiers are a powerful tool. For example, bidding higher for TOS can help you secure those coveted first-page slots, where conversion rates tend to be the highest. But here’s the kicker: modifiers don’t replace a solid understanding of bid management—they amplify it. If you’re not fundamentally sound in your approach, modifiers can end up magnifying inefficiencies.
The Metric That Changed Everything: Revenue Per Click (RPC)
So, how do you decide whether to increase or decrease a bid? Enter Revenue Per Click (RPC).
RPC focuses on profitability, measuring the revenue generated by each click. It’s a straightforward yet effective way to gauge whether your ad spend is pulling its weight.
Formula:
RPC = Total Revenue / Total Clicks
Here’s why RPC is important: if your RPC > CPC, you’re running profitable ads. If not, your CPC is eating into margins, and something needs to change.
Implementing RPC in Your Bid Management Strategy
Ready to put RPC into action? Follow these steps:
Select a campaign: Start with one of your best-performing campaigns.
Set a timeframe: Look at data from the past 60 days in the Amazon Ads Console.
Download the report: Identify columns for clicks and sales.
Calculate RPC: Divide total revenue by total clicks (the result should be in your local currency).
Compare RPC and CPC:
Highlight keywords where RPC > CPC in green—these are your winners.
Mark rows where RPC < CPC in red—these need adjustment.
Adjust bids:
Increase bids on keywords with high RPC.
Decrease bids on low-RPC keywords.
If you’re not using placement modifiers, this is a great time to experiment. Amplify the visibility of your best-performing keywords by targeting TOS or other high-converting placements.
Key Insights About RPC
Keep in mind that RPC varies by match type. For instance:
Phrase match campaigns often have the best RPC because they capture a broader audience at a lower CPC.
Exact match may cost more per click but bring in higher-intent customers, potentially balancing out RPC.
Caution: If you sell products with repeat purchases (like supplements), you’ll want to consider Lifetime Value (LTV) alongside RPC. Your Customer Acquisition Cost (CAC) should reflect the total value a customer brings over time, not just from a single transaction.
Automating the Process
Let’s be honest: manual bid adjustments can get tedious. Fortunately, automation tools like AdLabs, Adtomic, and Perpetua can simplify the process.
Tools like AdLabs and Adtomic allow you to build custom rules based on RPC, giving you more control.
Perpetua, while powerful, relies on machine learning, which can feel unpredictable at times.
For beginners, start with a rule-based system like Adtomic to maintain transparency and control over your adjustments.
Final Thoughts
The world of Amazon PPC is constantly evolving, and what worked a few years ago may no longer cut it. While RPC is a fantastic metric to guide your bid management decisions, remember that it’s just one piece of the puzzle. Pair it with tools like placement modifiers and automation software to take your strategy to the next level.
Bid management is no longer a boring, low-skill task—it’s a competitive advantage. The better you understand and leverage metrics like RPC, the more profitable your campaigns will be.
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