Amazon PPC bidding strategies: Fixed, dynamic, or rule-based?

TL;DR

• Choosing the right Amazon PPC bidding strategy (fixed, dynamic, or rule-based) is crucial for better ad performance and smarter budget use.
• Fixed bidding gives you full control, dynamic bidding adjusts based on conversion chances, and rule-based bidding follows custom rules you set.
• Each strategy has pros and cons, and the best choice depends on your campaign goals and budget.
• Regular testing and optimization help you find what works best and track key metrics and adjust based on data.
• Common mistakes include using the same strategy for all products, ignoring performance data, and relying too much on automation.

Did you know that your Amazon PPC bidding strategy can make or break your ad performance and directly impact your ACoS and sales? 

With Amazon offering multiple bidding options like fixed bidding, dynamic bidding, and rule-based bidding, choosing the right one is more important than ever. Each strategy controls how Amazon adjusts your bids in real time, based on your goals, competition, and shopper behavior.

Many advertisers overlook this step, simply choosing a default setting without understanding how it affects their budget or results. But a well-matched bidding strategy can help you spend smarter, win better placements, and increase conversions.

In this guide, we’ll break down the different Amazon PPC bidding strategies, when to use each one, and how to test and optimize your approach. Whether you’re new to ads or looking to scale, understanding bidding is key to unlocking your campaign’s full potential without overspending or missing opportunities.

Why choosing the right bidding strategy matters

Choosing the right bidding strategy in Amazon PPC isn’t just a technical step, it’s a key factor that directly affects your ad performance, budget efficiency, and overall sales. The bidding strategy you choose determines how Amazon adjusts your bids during ad auctions, which in turn influences where your ads appear, how often they’re shown, and how much you pay per click.

If your strategy doesn’t align with your campaign goals, like brand awareness, product launches, or profitability, you could either overspend or miss valuable opportunities. For example, fixed bidding gives you more control, while dynamic bidding can help you win top placements during high-converting moments.

With the right strategy in place, you can strike a balance between cost and visibility, making your campaigns more efficient and results-driven. Whether you’re trying to lower ACoS, increase impressions, or scale your reach, choosing the right bidding approach sets the foundation for better decision-making and long-term success.

Overview of Amazon PPC bidding strategies

What is fixed bidding?

Fixed bidding means your bid stays the same in every ad auction, no matter how likely it is that the shopper will buy. Amazon won’t raise or lower your bid; it sticks to the amount you set. This gives you full control over how much you pay per click, which is helpful if you want to keep your ad budget steady.

However, it doesn’t adjust based on real-time performance, so you might miss chances to show your ad in better spots. Fixed bidding works well if you know your keywords perform well and want simple, predictable costs.

What is dynamic bidding – down only?

Dynamic bidding down only is a setting in Amazon ads where Amazon lowers your bid when a sale is less likely to happen. This means you won’t spend as much on clicks that probably won’t lead to a purchase. 

It helps save money and keep your ad costs low. However, it won’t increase your bid even if there’s a high chance of making a sale. It’s a safe option if you want to control your budget and avoid overspending, but it may miss some good opportunities to increase sales.

What is dynamic bidding – up and down?

Dynamic bidding up and down is an Amazon PPC optimization strategy where Amazon automatically increases or decreases your bid based on the likelihood of a sale. If Amazon’s system thinks a click is more likely to lead to a purchase, it may raise your bid (up to 100% for top-of-search placements). 

If a conversion seems unlikely, it lowers your bid to help you save money. This strategy is great if you want better ad placement and are okay with flexible spending. It helps improve performance by focusing your budget on clicks that are more likely to turn into sales.

What is rule-based bidding?

Rule-based bidding is a strategy where you set custom rules to automatically adjust your Amazon PPC bids based on specific performance conditions. Instead of manually changing bids, you can create rules like “increase bid by 10% if ACoS is below 20%” or “reduce bid if clicks are high but conversions are low.”

This approach gives you more control and flexibility compared to dynamic bidding, while still saving time. It’s useful if you want to automate bidding based on your goals, such as lowering ACoS, increasing sales, or improving ROI. It works best when you have enough data to guide your rules.

Pros and cons of each bidding strategy

When to use which bidding strategy?

Choosing the right Amazon PPC bidding strategy depends on your campaign goals, budget, and how hands-on you want to be. Here’s when to use each one:

• Fixed Bidding is ideal when you want full control over your spend. It works well for tightly managed campaigns where you already know your keywords perform well. Use it if you want predictable costs and don’t need Amazon to adjust your bids.
• Dynamic Bidding – Down Only is a safe option when you’re focused on keeping costs low. It’s best for campaigns with a tight ACoS target or when testing Amazon product keywords. Amazon will reduce your bid if a click is unlikely to convert, helping you avoid waste.
• Dynamic Bidding – Up and Down is great for aggressive growth campaigns where visibility matters, like product launches or scaling top performers. Amazon adjusts bids in real time, increasing chances of winning high-converting placements.
• Rule-Based Bidding is useful when you want automation with more control. It’s best for experienced advertisers managing larger campaigns. You can set specific rules based on performance metrics like ACoS or CTR, helping you optimize based on your own strategy.

Each strategy serves a purpose: use the one that best supports your campaign goal.

How to test and optimize your bidding strategy

Testing and optimizing your Amazon PPC bidding strategy is key to improving performance and maximizing your ad spend.

• Start by clearly defining your campaign goals, whether you’re aiming for more visibility, better conversions, or a lower ACoS. Once your goals are set, choose a bidding strategy that aligns with them. Run your campaigns for at least 1–2 weeks to collect enough data for meaningful analysis.
• Use A/B testing to compare different bidding strategies for the same product or keyword. For example, run one campaign using fixed bidding and another using dynamic bidding, up and down. Track key metrics like impressions, clicks, conversions, ACoS, and ROAS.
• Check performance regularly and look for patterns. If you’re getting a lot of clicks but low conversions, try adjusting your bids or switching strategies. If you’re not getting enough visibility, consider increasing bids or using a more aggressive strategy.
• Tools like Amazon’s Campaign Manager, Search Term Reports, or third-party platforms can help you analyze and visualize data. Always test one variable at a time to know what’s working.

Optimization is an ongoing process of refining based on performance, budget, and business goals to get the best possible results from your bidding strategy. Here, you can opt for the Amazon optimization specialist to improve your bidding strategy game.

Common mistakes to avoid

• Not setting clear goals for your campaigns.
• Using the same bidding strategy for all products.
• Letting ads run without checking performance.
• Ignoring negative keywords.
• Overbidding on poor-performing keywords.
• Not testing different strategies.
• Running ads with weak product listings.
• Forgetting to update bids for seasonal events.
• Relying too much on automation without manual checks.

Final words

Choosing the right Amazon PPC bidding strategy, whether fixed, dynamic, or rule-based, can have a big impact on your ad performance, visibility, and overall return on investment. Each strategy offers different levels of control and flexibility, and knowing when to use each one helps you spend smarter and scale faster. But getting it right takes more than just setting bids; it requires testing, tracking, and constant optimization.

That’s where working with Amazon consulting experts can make a real difference. They help you choose the right bidding approach for your goals, avoid common mistakes, and use data to improve performance over time. Whether you’re launching a new product, managing a large catalog, or trying to lower your ACoS, expert guidance can help you get the most out of your ad spend.