How does SellerMetrics bid automation work?
Our general bid automation allows for daily bid adjustments based on the parameters set by the users. These parameters are:
- ACoS% Target. (ACoS aim of the optimal bid target)
- Bid Click Threshold (How many clicks on a keyword/target before bid adjustment should start?)
- Strategy (Moderate/Growth/Optimize). To see more on bid strategy, see the article here
The bid adjustments are made incrementally daily by 5% to 10% based on the strategy. The strategy dictates how aggressively you want our bid algorithm to get to the target optimal bid based on the ACoS% target.
To detail how the bid adjustment works see the below table. It is also important to note that the general bid algorithm is based on a 60-day look-back period.
Our bid algorithm is the following >> Optimal Bid = (Target ACoS%/Implied ACoS%)
Let's say the following parameters (bid automation settings) are set.
The "close-match" target with the ACoS% of 25 means the Optimal Bid is:
(25%/38.93%)*$0.77 = $0.49
Also, note that the clicks for this target is 363 since this is greater than the bid click threshold of 8, this will tell the algorithm to start the bid adjustments.
But since the strategy is "moderate" we do not bid the current $0.77 bid way down to $0.49 on the first day. We will make incremental adjustments of 5% on a daily basis until it reaches the optimal bid of $0.49
Day 1 Bid $0.77 ➡️ $0.73 [$0.77-($0.77*0.05)]
Day 2 Bid $0.73 ➡️ $0.69 [$0.73-($0.73*0.05)]
Day x Bid $0.51 ➡️ $0.49 [$0.51-($0.51*0.05)]