You are all set to start setting up the rules and optimizing your campaigns! By the end of this section you should:
Understand the different bidding rules set up (custom or quick).
Understand the different components of a bidding rule so that you can create them from scratch or modify them.
Understand how the default bidding rules work.
For starters, let's go to the Bidding Rules section (ensure you are already logged into the tool and with a profile selected for the link to work), where you’ll find the below:
There are two options to choose from:
Quick Rule Setup. Choose this option if you are unsure of the rules you should have in place to keep your campaigns optimized. You can select all or just a few campaigns where you'd like this setup, and this will automatically generate a set of rules that will help you in keeping your campaigns optimized. You can always customize them or add more later. Note that you won't be able to use this option until you've assigned a metric group to your campaigns.
Custom Rule Setup. Choose this option if you already know how to keep your campaigns optimized and prefer to build your own rules. If you do not want to use calculated values like ACOR or Adjusted Revenue, you do not need to assign a metric group to your campaigns.
Once you've selected either of these options, this will be the upper part of the screen you'll see.
For those of you that have chosen the Quick Rule Setup, if you scroll down you will be able to see the generated rules:
Which means you are set up and ready to go! You can keep reading if you’d like to know more about the different rules that are included, or how to create new rules. This will help you later on, in the Monitor & Adjust phase.
For those of you that have selected the Custom Rule Setup, there won't be any rules created — the Bidding Rules List will appear empty. You can feel free to create rules that adapt best to your needs :)
Elements of a bidding rule
Let's go over the different elements that make a rule work. If we scroll up to the bidding rule creation block, we will see the following:
Rule templates. This drop-down menu will show you a variety of different rule optimization templates that you may choose to use and/or fine-tune to your needs. We will talk more about each one of them later in this article. For those of you that selected the Quick Rule Setup, all the templates that appear here have already been automatically generated, so there is no need for you to use them.
Rule name. The rule name is optional, but it will allow you to have a clearer idea of what the rule will do.
Select campaigns. This is to select the campaigns you want the rule to apply on. In most cases, the rules should apply to all campaigns, but there may be exceptions where you don’t want certain campaigns to be affected by the same rules (example: campaigns for permafree books vs campaigns for non-permafree books).
Rule operator. The rule operator is the way in which the conditions will be applied. AND means that all conditions need to happen for the action on the bid to take place. OR means that any of the included conditions will need to happen in order for the bid to be modified.
Frequency. How often a rule should be executed. It can be either:
Manual. This means you’ll be able to execute your bidding rule any time you click on the upper left button “Execute Manual Rules”. This can be useful if you are testing new rules to see how they behave before implementing them recurrently. Also if you want to decrease/increase bids just once.
Weekly. Once a week on the day of your choosing.
Bi-weekly. Twice a month, on the 1st and the 15th.
Monthly. The first of each month.
Depending on how the bid is modified, there are four different types of rules you can create:
Increase. If certain conditions are met, then the target's bid will increase by x dollars or y percentage.
Decrease. If certain conditions are met, then the target's bid will decrease by x dollars or y percentage.
Pause. If certain conditions are met, then the target will be paused.
Automate. If certain conditions are met, then the target's bid will automatically be optimized using the formula Adjusted Revenue / Clicks.
Tip: It is not recommended to use this rule unless there is a minimum amount of clicks in place. For example: a target with just 5 clicks, where sales and/or reads have begun to take place, but they only amount to $1 in royalties. If we apply the automated formula, the bid will be $0.20 ($1/ 5 clicks), when perhaps we need to keep it at $0.71 in order for the same to keep getting results.
Columns you can use to create rules:
Impressions
Clicks
CTR (%)
Estimated ACOR (%) — If you recall, this metric lets us know your ad money spent vs your ad revenue earned.
ACOS (%)
Sales
Orders
Spend
Bid value
⚠️ Important for both settings ⚠️
If you select only a few campaigns during the rule creation process, and you want to add more later on, you will have to go into each rule and add them.
If you click on "Select All" campaigns, you won't need to add newly created campaigns to your rules. BUT! You'll have to assign them to a group of metrics if you want the rules that use the ACOR to work for those campaigns.
The rules apply only at a target level and always take into account the last 60 days of data.
The auto-generated bidding rules
When we choose the Quick Rule Setup option, we'll see that seven rules have been created. These rules are also provided as templates for those that select the Custom Rule Setup. We will analyze them in this section.
The objective of these rules, when working simultaneously, is to get you to 100% ACOR, or in other words, that your ad spend equals your ad revenue, whether it is expected (advertising book 1 in series) or immediate (advertising standalones or all books in series). The idea is that you:
Stop spending on keywords that are not giving you any return. If the ads created are not giving us a return over time, we want the spend in these ads to decrease.
Scale up spend on keywords that are giving us a good return.
💡 Keep in mind: This does not mean your account will always stay at a perfect 100% ACOR; spending is always needed before getting any royalties. But it should aim towards this number.
Let’s go through the rules:
High potential, low clicks. An increase rule — for targets that are getting very good results but don't have enough clicks to automate the bid.
Good potential, low clicks. An increase rule — for targets that are getting good results but don't have enough clicks to automate the bid.
Expensive targets, low clicks. A decrease rule — for targets that are becoming slightly expensive but haven't accrued enough clicks to pause, or automate the bid.
Highly exp targets, low clicks. A decrease rule — for targets whose spend is getting out of hand but haven't accrued enough clicks to pause, or automate the bid.
No interest at all. A pause rule — for targets that get a lot of impressions, but little to no clicks.
Clicks, no interest. A pause rule — for targets with enough clicks and 0 royalties earned.
Enough data to automate. A bid automation rule — for revenue-generating targets with enough clicks: the tool will optimize your bid for a 100% ACOR.
As a quick sum up of how these rules work — for the past 60 days:
Anything with a large amount of impressions, few clicks and no return at all, will be paused.
With the exception of the prior case, anything below 20 clicks has very few clicks to make big changes like pausing the target or drastically dropping/increasing the bid. Hence, in these cases bids will be modified moderately and on a weekly basis.
Anything above 20 clicks has already a good amount of clicks to begin pausing targets that are not working, or automatically adjust the bid. This will be done on a daily basis.
💡 Note: If you want to deep dive on the reason for this 20 click threshold, check out the article How do your determine target effectiveness?
Below we will go through each and give you some examples on how you can customize them.
Increase rule 1: High potential, low clicks
This rule is for targets that have fewer than 20 clicks, but have generated a significant amount of ad revenue: At least $1 of ad revenue for less than $0.50 of ad spend.
Here, even though the clicks data is not yet statistically significant, it makes sense to periodically increase the bid to encourage the target’s delivery.
Tip 1: Why choose a weekly frequency here (rather than, say, bi-weekly)? The choice largely depends on your budget. If you can afford to increase bids more frequently for faster results, choose weekly. If budget is an issue, choose biweekly. While it takes longer to get results, it may allow for building relevance and potentially reducing the cost per bid.
Tip 2: You can increase your bids by fixed amounts also. Note that if you are using percentage increases, the changes in your bids will be proportional to the bid number. Example: If you increase your $0.41 bid by $0.1, you will get $0.51. If the increase is by 10%, you will get $0.45, so it will be smoother. But if your bid is $1.21, then an increase by 10% will make this bid increase by $0.12, to $1.33, a bit higher than if the increase was by $0.1, to $1.31.
Increase rule 2: Good potential, low clicks
This is for targets that are still below our 100% ACOR goal. In this case, targets that generated $1 of ad revenue for between $0.90 and $0.50 spent, that do not yet have a minimum of 20 clicks. Again, just like with the prior rule, we want to increase the bid, but not too much since we are closer to that point — hence the separate rule for this purpose.
Tip 1: If you want to get all keywords to 1000 - 1200 impressions before you make any decision on them, regardless of the royalties, you can also set this type of rule to periodically increase the bids in small percentages until you reach this goal. Careful though — if you add multiple rules, make sure that they do not overlap, lest your bids end up increasing more than you expected.
Tip 2: If you have a low budget, make the increases in the bids less frequent, to try to see if Amazon can work with the new higher bids.
Decrease rule 1: Expensive targets, low clicks
This rule is for targets that already show an ad spend above the adjusted revenue. In this case, targets that have spent $1.10 for an ad revenue of $1. We already have a nice amount of clicks to know that perhaps this target is not what we were looking for, but still not enough to do any drastic changes like pausing the keyword or decreasing it too much with the automated formula. This way, we’ll slightly decrease the bids to avoid spending too much money before we get to 20 clicks.
Tip: You can modify the amount by which a bid is decreased. If 10% is something you consider too high, you can reduce it to 5%. Just like for the increase rules, you can also decrease the bids by a fixed amount.
Decrease rule 2: Highly exp targets, low clicks
This rule applies similarly to the prior one, but it is a bit more aggressive because the target has barely shown any results in spite of the money spent. In this case, targets that have spent more than $1.70 for just $1 of ad revenue generated. Hence, the decrease in the bid will be bigger.
Pause rule 1: No interest at all
This is for those targets where people are seeing your ad, but they are barely clicking on it. They are clearly of no relevance to the audience seeing the ads, so why keep them? It’s better to pause them soon and have Amazon focus the spend on other targets.
Tip 1: You should periodically check the targets that this rule has paused. If it triggers on many targets that you thought were perfectly relevant, it could be a symptom of deeper issues related to the cover design, price, or reviews, or it could suggest that the targets you selected are not the best fit for your book.
Tip 2: The click-through rate (CTR) goal may depend on your genre, or on what you've seen in your ads. In the case of this template, it translates to around 1 click every 1200 impressions. However, if you'd like to wait for longer before pausing a target/keyword, feel free to increase the number of impressions before pausing a target. Remember: Information sent by Amazon will be more reliable the more data we have!
Pause rule 2: Clicks, no interest
Here, we have passed our 20 clicks limit, and the target has yielded no returns at all.
People seem to have liked your ad but when clicking on the same they did not find what they were looking for. This is only costing us money, so it’s better to pause these targets before they eat away at our budget.
Tip 1: You will have to look out for these too, since if they begin to accumulate for targets that you thought were good for you, that may mean either a problem with the blurb, or with the targets you chose for your book.
Tip 2: If you also do not want to spend more than X dollars on a target with no results you can add another rule with this template and replace the clicks for spend (remember to adapt the rule name too).
Tip 3: Just like we mentioned on the previous rule, the more data the better. If you can afford to wait for 30 clicks instead of 20 before pausing a target, the certainty that a target/keyword does not work will be greater.
Enough data to automate
If the pause rule we mentioned previously (Clicks, no interest) does not get executed once the keyword reaches 20 clicks, that means that there has been some return on that keyword, so this rule gets executed.
The frequency is daily because, generally, the bid will not change much, just adapt to the new incoming data. If there is a peak in sales in the last couple of days, this should not affect the bid a lot, since it takes into account the last 60 days of data. The same applies if the spend goes up but no sales take place for a day or two.
Tip 1: If you can afford to, you can wait for longer before applying this rule, to say 30 clicks. As mentioned, the more data we have from Amazon, the more reliable the modifications will be. If you do this, remember to modify the limit of 20 clicks (Clicks < 20) in the increase & decrease rules to 30 clicks (Clicks < 30).
Tip 2: You can choose not to use this rule if you do not feel comfortable with it. If you prefer more gradual changes in your bids, do the following:
Delete this rule.
In the increase & decrease rules, remove the limit of 20 clicks (Clicks < 20) for them to apply.
Next steps
By now, you should have gotten a better understanding at how the default rules work. If you want to see the changes they are making, you can go to the Bidding History section, and you will see the last three executions that took place in your account, as well as the data used to make this change and the rules executed.
Now we can get to the final part — monitoring and customizing the tool to your needs.