Every seasoned marketer has a bit of a “controlling” streak. We like to see every keyword, adjust every bid, and hand pick every SKU. We’ve spent years learning the nuances of manual targeting because, for a long time, the “black box” of automation was synonymous with wasted spend.
But the landscape has shifted. On Amazon specifically, we are seeing more scenarios where the platform’s automatic targeting isn’t just “fine” but is actually crushing manual performance.
The challenge for modern brands isn’t finding the right manual bid; it’s learning how to set the right guardrails so the machine can find the customers you missed.
The Pivot: When Automation Wins
In a recent conversation with an e-commerce brand, Susan Wenograd, Sr. Director, Paid Media at Mixtape, highlighted a stark reality in their account: a massive performance gap between manual control and Amazon’s internal logic.
“So there’s a couple areas as of right now where automatic targeting is outperforming manual. That’s not necessarily unusual to see actually. The controlling marketer in me hates to admit when a black box just does better, but this is one of the times where I’m like, damn it, Amazon. Like even though you’re clunky and weird, you do certain things very well.”
In the example Susan spotted, one SKU was pulling a 3.5 ROAS on automatic settings compared to a meager 1.2 ROAS on manual. That is not a minor fluctuation; that is a signal that the manual strategy is actually limiting the brand’s growth.
When manual ROAS is that low, it usually means the marketer is being too specific or too restrictive. We often think we know exactly how a customer searches, but Amazon knows how they behave.
Moving Away from SKU-by-SKU Micromanagement
One of the biggest mistakes brands make when trying to scale on Amazon is treating every single SKU as a silo. We try to build hyper-specific manual campaigns for every variation, color, or pack size. While this feels like “good management,” it actually starves the Amazon algorithm of the data it needs to be effective.
If you have a broad category of products that all serve a similar intent (for example, party favors or gift sets), you don’t necessarily need to tell Amazon exactly which SKU to show for every search.
By grouping similar items and utilizing automatic targeting with a Target ROAS or a budget cap, you give Amazon “breathing room.” You are essentially telling the platform: “Here is a bucket of high quality products. Here is the return I need. Now, go find the best match for the shopper.”
The Concept of Guardrails
Using Amazon’s “black box” doesn’t mean giving up all control. It means shifting your control from the tactical level (bids and keywords) to the strategic level (guardrails).
What do these guardrails look like in practice?
Return Objectives: Setting a clear Target ROAS or ACOS within the automated settings ensures Amazon isn’t just chasing clicks at any cost.
Broad Categorization: Grouping SKUs that share a common use case or audience intent so the algorithm has a wider pool of data to draw from.
Negative Targeting: Even in an automated world, you must tell the machine where not to go. Excluding poor performing terms or irrelevant categories keeps the “breathing room” from becoming a “spending room.”
Why “Breathing Room” Leads to Scale
When you allow Amazon to figure out which SKUs perform best for certain broad intents, you uncover “hidden” conversions.
A shopper might search for a generic term like “birthday party ideas.” A manual campaign focused strictly on specific keywords might never bid on that term because it’s too broad. However, Amazon’s automatic targeting sees that your products have high conversion rates for shoppers with that intent.
By letting the machine find these connections, you find pockets of high ROAS traffic that your competitors, who are still stuck in manual micromanagement, will never see.
Trusting the Machine (With Adult Supervision)
The goal of a modern Amazon strategy isn’t to work harder; it’s to work smarter. If Amazon’s automation is outperforming your manual campaigns by nearly 3x, the answer isn’t to “try harder” at manual. The answer is to lean into the automation while providing the necessary guardrails to protect your margin.
At Mixtape Digital, we help brands move past the SKU by SKU manual grind. We focus on building the data infrastructure and the strategic guardrails that allow Amazon to do what it does best: find your next customer at the right price.
