Promotion Bid Resolution
When using Promotions, you may be wondering how Merch Jar comes up with the bids for the newly promoted keywords.
This happens in one of two ways, depending on whether or not there have been any sales.
If there have been zero sales for that search term during the lookback period, then the newly promoted keyword will have a bid that is a simple average of the bids from the parents.
If there have been any sales for that search term during the lookback period, then the newly promotedkeyword will have a bid that is a weighted average of the bids from teh parents, weighted by the sales.
Finally, if you have an amount or percentage modifier set, this will change your resolved bid by a flat amount or by a percentage, respectively.
Let's think through a few examples to better illustrate. Imagine you have two campaigns running -
an auto campaign and
a manual campaign using Amazon's suggested keywords.
You then have a promotion setup to
promote search terms from both of these campaigns to a performance campaign (in turn giving you more control over your bid adjustments to find the optimal bid) and
negate the promoted search term from your auto and manual suggested keyword campaign to isolate keywords to a single campaign.
Let's say this promotion was triggered with a "funny tshirt" search term and that your auto campaign's bid was $0.20 and your manual suggested keyword campaign's bid was set to $0.30.
Example 1 - No Sales
The search term had been found in both your auto and manual suggested keyword campaigns, with no sales in either. The resolved bid will be the simple average of the parent bids, or the simple average of $0.20 and $0.30, giving you a resolved bid of $0.25.
Example 2 - With Sales
The search term had been found in both your auto and manual suggested keyword campaigns. Your auto campaign has $20 in sales, while your manual suggested campaign had $60 in sales. The resolved bid will be the weighted average of the parent bids, weighted by their sales.
So (($20 in sales * $0.20 bid) + ($60 in sales * $0.30 bid)) / ($80 in sales) = $0.28 bid.