Teikametrics introduced a new hourly bidding solution for merchants who advertise on Amazon that takes into account many factors – including the cost of sellers’ inventory to ensure profitability.
The new feature is part of a product called the Teikametrics Flywheel and combines advertising data, transaction data, and cost of goods sold in order to algorithmically optimize for Amazon Advertising.
The Flywheel Hourly Bidder examines each ad target sellers have (keyword, Product Attribute Targeting, etc.) and evaluates whether it has the best bid, multiple times a day. Each evaluation determines the optimal bid for that target by taking into account sellers’ margins for a sale and the likelihood of the buyer purchasing if they click.
Teikametrics said a seller doing $1 MM in annual sales is going to require, on average, 40,000 bid changes a month to keep their ad performance optimized. And sellers often have to change their advertising strategy for a variety of reasons, the company said – for example, flash sales; new multi-product bundles; price changes; and shipment delays.
From Teikametrics’ press release:
“The hourly bidding algorithm is powered by an econometrics and machine-learning data model that, for the first time, allows Amazon advertisers to automatically adjust bidding strategy quickly, minimize wasted ad spend, and adapt to changing marketplace dynamics. This powerful new capability takes advantage of Amazon’s recent ad policy that allows for significantly reduced lag time in reporting advertising performance data.
“Being able to calculate the most profitable bid on an hourly basis allows Teikametrics’ industry-leading ROP platform to proactively invest ad dollars where the algorithm predicts the highest return on investment. Keywords and ad groups with high traffic volumes and competitive auctions, such as consumer electronics, household items, and apparel, are among those that will benefit the most during the first few days of bidding, during which time wasted ad spend can be curtailed by up to 50 percent.
“Even sellers whose product keywords have fewer search activities and less dynamic ad data history will benefit substantially from Teikametrics’ hourly bidding capability, which offers them access to up-to-the-moment information about advertising performance. With this new feature, Teikametrics’ clients can also explore winning auctions and experiment with more aggressive bidding strategies to extract keyword performance information quickly.
““Amazon is quickly gaining ground on Facebook and Google as a leading online advertising channel,” said Alasdair McLean-Foreman, CEO and founder of Teikametrics. “In a marketplace as dynamic and competitive as Amazon, reaction time is critical. Teikametrics’ hourly bidding algorithm is the first solution to enable brands to react to statistically significant changes in their Amazon ads data with hourly granularity. This is another major milestone in our ongoing mission to help brands maximize profit on Amazon.”
“Teikametrics has managed more than $6 billion in retail sales for Amazon sellers to date. More than 2,000 clients have generated an average of 34 percent more revenue at constant marketing efficiency within 60 days of deploying Teikametrics’ ROP platform. Attendees at the Prosper Show are welcome to visit Teikametrics at booth 312 to learn more about its platform capabilities and users’ success stories.”
You can learn more about the new feature on Monday’s Teikametrics blog post by Chief Technology Officer Aatish Salvi.