This is an important and critical step while setting up your auto-campaigns on Amazon Advertising console/ Amazon seller central.
While creating sponsored products auto-campaigns ensure that you set your auto campaigns to target groups by selecting “Set bids by targeting group”
See screenshot below.
This ensures that you are not overpaying for placing your products on substitutes and complements both of which usually have lower conversions, higher click throughs and lower sales ultimately resulting in very high acos.
Select “Set bids by targeting group” and then change the bids for lower performing group and set it to low bids.
Unfortunately this highly optimal setting is neither the default option of Amazon and to top it off, it’s well hidden. This used to be the default option in 2019-20 and now the default option is the same bid across the group which results in extra expenditure for displaying ads which won’t deliver optimal results.
This was a very disappointing (but expected) move from Amazon as it’s doubling down on ads and trying to increase it’s revenues.
You can also not change the bidding type (as of Mar 2021) from the default bid to targeting by group once you have created the campaigns. Default bids are highly profitable for Amazon and heavily expensive for sellers.
Currently the only way is to stop, archive your auto campaigns and create it the right way with targets by individual groups.
When you are done creating the campaigns the right way, the campaign should look like the screenshot below in your Amazon Advertising console.
AiHello autopilot can now adjust the individual bids much more precisely and you can also control/switch off ads from appearing on places you don’t want to appear.
In some cases, some products perform well when run as a complement/substitute and in other cases close match gets the best result. Whatever the situation you can either manually tweak the bids or just put the campaign on AutoPilot and let it automatically optimize the bids.