Have you heard about “the idiot tax”? When I published my article about the Amazon advertising structures, I mentioned this term on the 3rd level of optimization.

What is the “idiot tax,” and why do we call it that way?

This is how we call the 4 Amazon targeting groups in the automated campaigns. It comes from the fact that sellers are often unaware that they can optimize the bids on these groups.

Optimizing bids give you the chance to set up and reach different campaign goals.

Let’s take a closer look at each targeting group:

• When customers use search terms that closely match your products this is a close match.
• The opposite is true for loose match. They are targeted to people who use search terms that loosely match your products.
• Substitutes are targeted to consumers who view the detail pages of products similar to yours.
• Complements are shown to the detail pages of products that complement yours.

When Amazon created the opportunity to run automated campaigns, you couldn’t divide the targeting groups and optimize them separately.

Now, you can optimize them for each of the 4 target groups based on the data you get from your reports.

For example, if you decide to decrease the bids for the loose match group, this could affect traffic. But you can consider lowering the bid if it doesn’t convert well.

On the 3rd level of optimization, all the targeting groups are separated. It means you have even more control over them. You have the information about the search terms for each of your targeting groups, and it helps you determine their performance.