Calculating optimal bids are all rage around the internet especially around the Amazon ecommerce business and the most frequent formula given is Bid = sales/click* target acos. While this may provide a good indication of what your bid might be, this is a classic case of putting the cart before the horse. Optimizing your ads through rules-based systems may seem like a smart strategy, but it could actually be hindering your business. What you want to do is to optimize the bid to generate good sales. But with formulas like this you are optimizing your sales & clicks based on your bids. Adding misery to that equation is that lower bids will get you substandard sales and most likely higher ACOS (lower ROAS). This causes what I call a “spiral of death”. Your sales go down since your bid is low. Your bid goes further down if you use the formula above since sales is low. So don’t be a kid, ditch the algo bid! (I am no Shakespeare when it comes to rhymes) aihello The true way out is to f...
