Sponsored products works with a CPC (cost per click) model. This pricing model works on the basis of a second price auction system, where you and other advertisers bid for the advertisement space for your articles. You set the maximum amount you want to pay for a click on an advertisement. The more competitive your bid, the more likely your advertisement will be shown. The CPC usually increases for popular categories or expensive articles. The reverse also applies. A second price auction system means that if advertiser A bids 90 cents and advertiser B bids 1 euro, advertiser B wins the auction and ends up paying 91 cents per click.
The minimum click price differs per category. In your campaign you can see what the minimum bid is for each article. If your articles are not getting any views then your bid is too low. It may also be that you get lots of views and clicks and no sales. In that case, it is better to lower your bid slightly. Your ACoS gives a good indication of whether your advertisements are profitable.
Frequently Asked Questions
Can I change my CPC bid during the campaign?
You can set and edit bids for each article or keyword in the campaign dashboard. Unless you choose automatic bidding. Then the system determines the optimal bid for the campaign.
My bid is high. Why does my advertisement hardly ever appear in one of the categories and almost always appears in another?
Every time a customer visits a page of search results or product pages or category pages, the system looks to see which advertisement should be shown. The algorithm takes into account aspects such as relevance, price, page context, keywords and your bid price. In other words, even if you have the highest bid, your advertisements will not be shown if our algorithm does not find the place relevant. You should therefore ensure you use the right description and keywords on your product page. Also, do not forget to set a competitive bid.
What is the automatic bidding strategy?
With automatic bidding, the work is done for you. Bids are set automatically to generate as many conversions as possible. In ‘advanced’ you specify, using ACoS itself, approximately how much you want to pay for your sales.
How do I decide what bid to make?
When you put a campaign live, you see the average CPC in similar campaigns. This gives you a good benchmark. You also see what the minimum CPC is. This is determined by all advertisers. Is it your first campaign? Then start with the CPC you use for other channels, such as Google, or an automatic campaign.