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How do I use the Max Bid setting for the Bids by Badger algorithm?

What is a Max Bid? Why should I use it? How do I set it? How do I adjust it? Why is my Average CPC higher than my Max Bid?

You turned on Bids by Badger, set your target ACOS for your campaigns, but you don't know what your max bids should be. You may not even know what a max bid is or the purpose of it. Well, all of this information is provided in this article!

What is a Max Bid?

A max bid is the maximum amount that the Bids by Badger algorithm will set your bid to with each keyword or product target.

Why Set a Max Bid?

Ad Badger's Bid Algorithm, Bids by Badger™️, offers the following checks before assigning a new bid to a keyword or product target.

  • It calculates a new bid (let's say $7.00 for a very profitable keyword).
  • Before it sets the new bid, it checks your max bid.
  • If you have a max bid of $2.00, then The Badger will not increase your bid over $2.00, and it will be "capped" at $2.00.
  • Ad Badger will still calculate a new bid daily. If that new calculated bid is over your cap, it will hold at your max bid.

How To Set & Adjust Your Max Bid

Setting a max bid is quick and easy. You can set your max bid at the campaign, ad group, and target levels.

1. Navigate to the Ad Manager

2. Find the entity you wish to edit and either:

  • Click on The Badger Icon
  • Check the checkbox and select "Update Bid Limits" in the action bar

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3. Depending on which option you chose above, one of two popups will appear. Don't worry, it doesn't matter which way you do it!

Fill in the input field for Max Bid (and for Min Bid, if you need to adjust that as well) and click 'Update'.

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Once you change your max bid, Bids by Badger will take this number into consideration as it makes its daily calculations to make sure you reach your target ACOS while maintaining traffic and conversions.

Why is my Average CPC higher than my Max Bid?

Let's start with some definitions:

  • Average CPC: Your total amount of ad spend over the number of clicks for a certain scope and timeframe. You can look at the average CPC at the campaign level, account level, ad group level, product level, and of course keyword level.
  • Max Bid: The highest Ad Badger will set your CPC Bid for a single keyword.

Let's say you have a keyword or campaign that generated clicks at an average CPC of $2.00 for the past 30 days.

Then you came to Ad Badger and set a Max Bid of $1.50. Therefore, all of your future clicks will not be higher than $1.50.

However, if you're viewing your average CPC for the past 30 days, you will likely have an average for the month to be close to $2.00. Your average for the day-- see the difference-- will not be over your Max Bid because you're just looking at the cost and clicks for a single day when the max bid was activated.

Another scenario where your bid might be higher than your Max Bid is when you look at your ad group default bids. Ad Badger does not optimize your ad group default bids because when you have an active keyword bid in Amazon, Amazon uses your keyword bid, not your ad group bid.

Questions?

If you have any additional questions, contact us at thebadger@adbadger.com.