📋 Overview
Every Sponsored Products campaign forces a choice between three bidding strategies, and most sellers pick one at launch and never revisit it. That setting decides whether Amazon is allowed to spend above your bid, below it, or exactly at it — which changes your cost per click, your placement mix, and how fast a campaign burns its budget. This article explains what each setting actually does, how it interacts with placement adjustments, and how to decide which one belongs on which campaign.
⚙️ What the Three Settings Do
All three are set at the campaign level, not the ad group or keyword level. You choose one per campaign, and it applies to every target inside it.
Dynamic bids – down only
Amazon lowers your bid in real time when it predicts a click is less likely to turn into a sale. It never raises it. Your bid is a ceiling you will rarely hit, and you will pay less than your stated bid on a meaningful share of auctions.
This is the default on new Sponsored Products campaigns, which is why so many accounts run entirely on down-only without anyone having chosen it. The trade-off is lost impressions: when Amazon shades your bid down, you often lose the auction entirely rather than winning it cheaper.
Dynamic bids – up and down
Amazon raises your bid when it predicts a click is more likely to convert, and lowers it when conversion looks unlikely. The documented increase is up to 100% for Top of Search placements and up to 50% for other placements. Confirm the current percentages in Amazon’s advertising help documentation before you build a budget around them.
The increase is not a flat uplift applied to every auction. It is applied selectively based on Amazon’s own conversion prediction, using shopper-level signals you cannot see in any report. That is the whole bargain: you hand over bid control in exchange for Amazon bidding harder on the clicks its model likes.
Fixed bids
Amazon uses your exact bid for every auction, with no conversion-based adjustment up or down. Placement adjustments still apply — fixed means fixed relative to conversion likelihood, not immune to every modifier.
Fixed bids typically produce more impressions than down-only at the same bid, because Amazon is not shading you out of weaker auctions. More impressions at a constant bid usually means a lower click-through rate and a higher ACoS unless you are actively pruning search terms. The payoff is clean data: when every click cost the same ceiling, keyword-level performance differences are easier to read.
🧮 How the Adjustment Stacks on Top of Your Bid
Sponsored Products supports bid adjustments on four placements — Top of Search, Rest of Search, Product Pages, and Amazon Business — set in the Bid adjustments tab inside the campaign, with a range of 0% to 900%.
The two modifiers are not alternatives. They compound. Amazon applies the placement adjustment to your base bid first, then dynamic bidding adjusts the already-modified bid.
Work it through with a $1.00 base bid and a 50% Top of Search adjustment:
- Fixed bids: $1.00 → $1.50 at Top of Search. That is your ceiling.
- Down only: $1.50 is the ceiling, and Amazon may bid anything below it.
- Up and down: $1.50 can be increased by up to 100% at Top of Search, so your real ceiling is $3.00 — triple the number you typed into the bid field.
This is where campaigns quietly outrun their expected cost per click. A seller sets a conservative bid, adds a healthy placement adjustment because Top of Search converts well, leaves the strategy on up-and-down, and then cannot work out why average CPC looks nothing like the bid. Nothing broke; the two multipliers simply stacked.
💡 Pro Tip: On up-and-down campaigns, set your base bid at the level you would be comfortable paying at the ceiling, not at the level you want to pay on average. If $3.00 for a Top of Search click would put you past break-even, the problem is the base bid, not the strategy.
⚖️ Matching the Setting to the Campaign’s Job
There is no strategy that wins across an account. The right answer depends on what the campaign is supposed to accomplish and how much you already know about the targets inside it.
Choose down only when protecting spend matters more than volume
- The campaign has thin or unproven conversion data — a new ASIN, a new category, or a product with few reviews.
- Your margin is tight enough that an unplanned CPC increase pushes the campaign underwater.
- You are running broad match or auto targeting where a share of the traffic is known to be loose.
- Budget is capped low and you would rather it last the full day than exhaust by mid-morning.
Choose up and down when you have proven targets and room in your margin
- Exact-match campaigns built from search terms you already know convert.
- Branded defense campaigns where losing the top slot to a competitor costs you more than the extra click cost.
- High-intent periods — a deal day, a seasonal peak — where incremental volume is worth paying up for.
- Your break-even ACoS leaves headroom for a click that costs twice your bid.
Choose fixed when you are measuring, not optimizing
- You are testing a new keyword set and want cost per click held constant so performance differences reflect the keyword, not Amazon’s prediction model.
- You want maximum impression coverage on a term you are trying to rank for, and you are willing to accept a worse ACoS during that push.
- You are rebuilding bid logic from scratch and need a clean baseline before layering adjustments back on.
One pattern worth noting: down-only is often treated as the safe default, but on a campaign full of proven exact-match converters it can suppress your presence in exactly the auctions you most want to win. “Safe” and “underexposed” look identical in an ACoS report.
🚩 Mistakes That Make the Bidding Strategy Look Like the Problem
Switching strategy and bid in the same session
If you move a campaign from down-only to up-and-down and cut the base bid at the same time, you cannot tell which change produced the result. Change one variable, let it run, then change the next. Give it enough days to collect a comparable number of clicks to the period you are comparing against — a weekend-heavy or weekday-heavy window will mislead you on its own.
Comparing ACoS without looking at where the clicks landed
Strategy changes shift your placement mix, not just your cost. A campaign that moves to up-and-down may now win more Top of Search impressions, which usually convert better and cost more. Pull the placement report under Measurement & Reporting > Sponsored ads reports and compare cost, orders, and conversion rate per placement across the two periods. Account-level ACoS alone hides the mechanism.
Running up and down on a listing that cannot convert
Up-and-down bids harder on clicks Amazon expects to convert. If your detail page, price, review count, or stock position is the limiting factor, you are paying a premium for traffic that still bounces. Fix conversion first; the same strategy behaves very differently once the listing holds its visitors.
Treating the setting as permanent
A launch campaign that justified down-only in month one may be sitting on six months of proven conversion data by month seven. Review the bidding strategy whenever a campaign’s purpose changes — when you promote harvested keywords into an exact-match campaign, when an ASIN goes from new to established, or when you shift from efficiency to growth.
❓ FAQs
Can I set different bidding strategies for different ad groups in one campaign?
No. The strategy is a campaign-level setting and applies to every ad group and target inside it. If you need different bidding behavior for different keyword sets, split them into separate campaigns — which is also what makes the resulting data readable.
Do these strategies apply to automatic targeting campaigns too?
Yes. Auto campaigns use the same three options. Auto targeting also lets you set separate bids for each matching type (close match, loose match, substitutes, complements), and your chosen strategy applies on top of those individual bids.
Does changing the bidding strategy reset my campaign’s performance history?
Amazon does not document a formal reset or relearning period for a strategy change — your historical data stays in the reports. What changes is delivery, immediately. Treat the data before and after the switch as two separate periods when you evaluate it, rather than reading a blended average.
With down only, can I ever pay more than my bid?
Down-only will not raise your bid based on conversion likelihood, but a placement bid adjustment will raise the ceiling for that placement. If you have a Top of Search adjustment applied, your maximum cost per click at that placement is the adjusted figure, not the base bid you entered.