The Max CPC (Maximum Cost-Per-Click) feature shows you the highest possible amount you could be charged for a single click on your ad.
It helps you understand the absolute upper limit of your potential costs by combining your all of your highest bid modifiers with your base bid.
Your Max CPC is not what you will always be charged; it's the highest possible charge. It is calculated by applying your highest percentage-based modifiers to your base bid multiplicatively.
The formula is:
Let's break that down:
Base Bid: The default maximum amount you've set to pay for a click.
Placement Modifier: A percentage increase you've set for premium ad locations (e.g., a 200% increase for top-of-search).
Dayparting Modifier: A percentage increase you've set for highly competitive time slots (e.g., a 50% increase for weekday evening hours).
Business Placement Modifier: A percentage increase for placements on Amazon Business
Dynamic Up & Down: And additional +100% increase is applied if campaign is using Dynamic Up & Down
Example Scenario:
Base Bid: $1.00
Highest *Placement Modifier* is: +200% (for a prime location)
Highest *Dayparting Modifier* is: +50% (for a peak time slot)
Your Max CPC is calculated as:
$1.00 × (1 + 2.00) × (1 + 0.50) = $1.00 × 3.00 × 1.50 = $4.50
This means if your ad runs in that prime location (+200%) during that peak time slot (+50%) and receives a click, you could be charged up to $4.50.
Budget Transparency: It provides a clear, upfront view of how your combined bid settings can impact your costs, preventing surprise charges.
Informed Bidding: Understanding your maximum potential cost allows you to set your base bid and modifiers with more confidence, ensuring your overall strategy remains profitable.
Cost Control: By knowing the max potential cost, you can decide if your highest modifiers are appropriately set for their value.
