Automatic vs Manual Targeting and Bid Strategies for Amazon Ads

Automatic Targeting: How It Works

With Automatic Targeting, you write the ad and set a budget, and Amazon’s ads bidding algorithm matches your product to relevant customer searches using listing data, category information, and historical purchase behavior. You don’t select keywords, Amazon decides which searches are relevant enough to trigger your ad.

Amazon further splits automatic campaigns into four matching types behind the scenes: close match, loose match, substitutes, and complements. Close and loose match target searches similar to your product; substitutes and complements place your ad on listings that are alternatives or commonly bought alongside your product.

When Automatic Targeting Makes Sense

Automatic Targeting earns its place in a few specific situations. New listings with no search term history benefit from it because it surfaces real customer search terms you wouldn’t have thought to target manually, data you can later mine and move into manual campaigns. It’s also useful for ongoing keyword discovery even on established listings, since shopper search behavior shifts over time and automatic campaigns keep surfacing new terms passively. And for sellers who genuinely don’t have the bandwidth for granular keyword research, it provides a reasonable baseline rather than no advertising at all.

The tradeoff is control. You’re trusting Amazon’s algorithm to decide relevance, and without disciplined negative keyword management, automatic campaigns can quietly spend on searches that generate impressions but never convert.

Manual Targeting: How It Works

Manual Targeting puts keyword and product selection in your hands. You choose the exact search terms (keyword targeting) or specific ASINs and categories (product targeting) you want your ad to appear against, and you set bids at the keyword or target level rather than letting Amazon decide.

This is where match types come into play broad, phrase, and exact, each giving you a different level of control over how closely a shopper’s search needs to match your chosen keyword before your ad is triggered.

When Manual Targeting Makes Sense

Manual Targeting is the right call once you have enough performance data to know which keywords actually convert for your product, usually harvested from an automatic campaign’s Search Term Report. It’s also essential for protecting margin on your highest-value keywords, since you can bid precisely rather than accepting whatever Amazon’s automatic matching decides is relevant. Established listings, competitive categories, and any campaign where ACoS control matters more than reach are better served by manual targeting.

The tradeoff here is time. Manual campaigns require ongoing bid management, regular Search Term Report reviews, and ongoing negative keyword additions, this isn’t a “set once” strategy.

Amazon’s Bidding Algorithm: Dynamic Bids Explained

Once you’ve chosen a targeting type, the second decision is how much freedom to give Amazon’s real-time bidding algorithm to adjust your bid at the moment of auction. This is where the actual algorithmic bidding happens, and it applies to both automatic and manual campaigns.

Amazon offers three bid strategy settings:

Dynamic Bids – Down Only

Amazon’s algorithm will lower your bid in real time when a click appears less likely to convert, but it will never raise it above what you set. This is the most conservative auto bidding strategy, it protects you from overpaying, but it also means you may miss high-intent placements where a slightly higher bid would have won a valuable sale.

Dynamic Bids – Up and Down

Amazon can both raise and lower your bid, increasing it by up to 100% for top-of-search placements when a conversion looks highly likely, and lowering it when it doesn’t. This is Amazon’s most fully automated bid strategy option, and it generally performs well for sellers who trust the algorithm and are optimizing for overall sales volume rather than bid-level precision.

Fixed Bids

Your bid stays exactly where you set it regardless of Amazon’s real-time conversion prediction. This gives you complete predictability, which matters most when you’re running tightly controlled campaigns against a strict target ACoS, but it also means you’re not benefiting from any of Amazon’s algorithmic adjustments, good or bad.

None of these three is universally “correct.” Down Only tends to suit newer campaigns and tighter margins; Up and Down tends to suit campaigns chasing visibility and volume; Fixed Bids tend to suit highly optimized, data-mature campaigns where you’ve already found your winning bid through testing.