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Maximum CPC bid limit

A maximum CPC bid limit is the highest bid per click that an automated bid strategy is allowed to place in any auction.

How it works

An automated strategy sets the bid in every auction itself. The limit is a ceiling over those bids: whatever the strategy predicts, it bids no higher. Where winning a click takes a higher bid, the strategy loses that auction, so a limit cuts out expensive clicks and the volume they bring.

Where you can set it depends on the strategy. In Maximize clicks it is optional. In Maximize conversions and Maximize conversion value, with or without a target CPA or target ROAS, the Google Ads API lets you set it only in a portfolio bid strategy. Target impression share requires a limit.

Whether your store needs a limit at all is the subject of portfolio strategies and bid limits.

Example

Example store, not client data.

The tableware shop keeps 210 of gross profit on an average order (600 × 35%). It runs its Shopping campaigns in a Target ROAS portfolio with a bid limit of 8. On a query where 7.5% of clicks end in an order, a click is worth up to 210 × 0.075 = 15.75 before it stops paying for itself, yet no bid there goes above 8. On a query that converts at 1.5%, a click is worth at most 210 × 0.015 = 3.15, well below the ceiling of 8, so there the limit has nothing to cut.

Not to be confused with

  • Manual CPC — the bid you set yourself. A bid limit is only a ceiling: the strategy still chooses every bid below it.
  • Break-even CPC — the highest average price per click at which the ads still pay for themselves. A limit caps every single bid, including bids on clicks worth more than the average.

Right and wrong readings

  • Wrong: “Set the limit at break-even CPC, and no click will lose money.” Right: at the shop’s average conversion rate of 3.75%, break-even CPC is 210 × 0.0375 = 7.88. A limit of 7.88 cuts off bids above it on clicks worth 15.75 and still allows bids up to it on clicks worth 3.15. It caps the price of a click, whatever the click is worth.

Sources