How Bidding Works in Sponsored Products
Sponsored Products runs on an auction. For each opportunity, your bid competes against other advertisers for the same placement.
What you pay depends on the following:
Your CPC bid. The cost per click (CPC) you enter on the line item. Depending on your optimization model, this is either exactly what you pay or a baseline the engine adjusts around.
The minimum bid, or floor. The lowest bid the retailer accepts for that category. You cannot bid below it.
Your Max CPC. A ceiling you set. The engine never bids above it.
This guide covers how to set each of them.
Where to Start Your Bid
On a standard CPC line item, your bid is a fixed price rather than a range the engine moves within. So your starting figure matters, and you can adjust from there.
If you have no performance history to work from, a practical starting point is roughly 20% above the retailer's minimum bid. Adjust gradually from there based on delivery and performance.
A bid set at the minimum wins only the auctions no other advertiser competed for, which limits both your delivery and the performance data you need for later decisions.
From there, work from the top down:
Adjust the line item CPC first.
Only then adjust individual product bids.
Only then apply page type multipliers.
Changing the line item bid affects everything beneath it, so it is the fastest way to shift performance. Adjusting individual product bids before the line item CPC has a much more limited effect.
Use Suggested Bids to Set Your Opening CPC
Suggested Bids gives you a competitive CPC range based on recent auction data for products like yours. Use it to set your first bid rather than estimating one.
Where to Find It
During line item setup, in the Bid step.
After launch, in the Bid Strategy Settings panel for any live line item, reached from the Bid Strategy column on the Line Items dashboard. The minimum bid is shown there too.
What It Is For
Avoiding an opening bid so low that you win no impressions.
Avoiding an opening bid so high that you overpay.
Setting a bid with confidence on a brand-new line item that has no history.
Benchmarking what similar advertisers are paying right now.
You can bid inside the range, above it, or below it, down to the minimum bid.
How the Suggested Bid Range Is Calculated
The range comes from real auction outcomes over the last 14 days, not a model or an estimate.
The lower bound is the 30th percentile of winning CPCs.
The upper bound is the 70th percentile.
That means the range describes what it typically took to win auctions in conditions like yours.
For a new line item with no history, the calculation uses the products you have added, their retailer taxonomy, and the inventory the line item could serve on. It then looks at billed CPCs from clicks on that inventory over the past 14 days.
For an existing line item, it uses that line item's own recent auctions:
Clicks Optimizer: auctions this line item competed in.
Revenue or Conversions Optimizer: auctions from this line item plus similar line items in the same campaign using the same strategy.
Because the window is 14 days and competition shifts, the range moves. Check the range again each time you revisit a bid, rather than reusing an earlier figure.
Set a Max CPC Cap
Your Max CPC is a ceiling, not a target. It caps how high the engine may bid. Most of your actual bids will be lower.
When you use the Conversions or Revenue Optimizer, the engine adjusts your bid around the CPC you entered. A Max CPC stops that adjustment running further than you want.
We recommend setting your Max CPC at least 30% above your entered bid. A smaller margin leaves the engine too little scope to optimize, and you lose most of the benefit of using an optimizer.
Match Your Strategy to Your Goal
Your goal | Optimizer | What you gain | What you give up |
|---|---|---|---|
Maximize efficiency | Revenue or Conversions | Higher ROAS, lower cost per order | Scale, coverage, share of impressions |
Maximize engagement | Clicks | Scale, competitiveness, higher click-through rate | Optimization toward ROAS or CPO |
Maximize sales revenue | Revenue | Greater total revenue | Some scale and competitiveness |
Maximize units sold | Conversions | More units, lower cost per order | Some scale and coverage |
The next four sections cover each in turn. Choose the one that matches what you are measured on.
Maximize Efficiency
The most common Sponsored Products strategy. It may reduce how often your ads appear, but it uses your budget more efficiently.
Set the optimizer to Revenue for the highest ROAS, or Conversions for the lowest cost per order.
Set a Max CPC at least 30% above your entered bid, so the engine has scope to optimize.
Set bids competitively enough to balance scale against your performance target.
If your cost per order is running high, lower the CPC slightly. If you want more volume, raise it.
Maximize Engagement
Best when your priority is reach rather than efficiency: new product launches, challenger brands, highly competitive categories, or supporting a promotion.
Set the optimizer to Clicks.
Set bids competitively so your ads deliver. This strategy depends on winning impressions.
Adjust CPC against your ROAS target, but keep bids high enough to scale. Lower slightly for efficiency, raise if you are not reaching enough shoppers.
The engine will not optimize toward ROAS or cost per order here. You are buying reach and clicks, and we recommend measuring it that way.
Maximize Sales Revenue
Expect fewer impressions in exchange for higher total revenue.
Set the optimizer to Revenue.
Set bids to stay competitive while holding above your performance thresholds.
Set a Max CPC at least 30% above your entered bid.
Adjust progressively, and preferably at product level: sort your top products by spend, then reduce bids slightly on those with a ROAS below your threshold.
Lower the CPC slightly to improve efficiency, or raise it to increase win rates and sell more stock.
Maximize Units Sold
Use this when unit volume matters more than total revenue.
Set the optimizer to Conversions.
Set bids to support visibility without dropping below your performance targets.
Set a Max CPC at least 30% above your entered bid.
Adjust at product level: lower the CPC slightly for efficiency, or raise it to scale faster.
Adjust Bids Gradually
Bid changes take time to show their effect, and a large change makes that effect difficult to interpret.
We recommend changing bids by no more than 10 to 15% at a time.
If you are using the Conversions or Revenue Optimizer, leave bids alone for the first 21 days, as this is the learning phase. To learn more, please see Choose an Optimization Model for Sponsored Products.
Set Your Max CPC for Adaptive CPC Line Items
Your bid strategy and your optimization model are two separate choices. Standard CPC and Adaptive CPC both work with all three optimization models, so choosing Adaptive CPC does not change what the engine optimizes toward. It changes how your bid is set, and it lets the engine manage pacing. To learn more, please see Choose an Optimization Model for Sponsored Products.
With Adaptive CPC, you set a Max CPC and nothing else. No product bid overrides, no page type multipliers, and no keyword bid overrides.
That last one has a consequence for conquesting. If you want to conquest from within a combined line item, the recommended approach is to bid up the conquesting keywords specifically using keyword bid overrides, which Adaptive CPC cannot do. Either use Standard bidding, or run conquesting as its own line item with a higher Max CPC. To learn more, please see Reach Competitor Shoppers With Search Conquesting.
We recommend setting it to the top of the suggested bid range, where one is shown. This allows the engine to bid competitively, while keeping your ceiling based on current auction data.
If the line item is new and no useful range is available, start around 25% to 30% above your historical average CPC, while staying above the retailer's minimum bid.
Your Max CPC is a ceiling. Setting it at the upper bound allows the engine to:
Bid competitively when auctions become more contested.
Maintain pacing when traffic or win rates fluctuate.
Continue entering auctions, rather than being limited by a restrictive ceiling.
Most actual bids will still be below it, because the engine adjusts continuously against competition and pacing.
Two common questions:
Will I always pay the Max CPC if I set it at the top of the range? No. The Max CPC is an absolute cap but the engine bids below it most of the time.
What if I set it at the lower end instead? You are likely to restrict delivery. The engine may not be able to bid high enough to stay competitive, particularly as competition increases.
If you are moving an existing Standard bidding line item to Adaptive CPC, review the suggested bid range first. It is shown for all Standard bidding line items when you create or edit them.