What is Max. Keyword Spend?
Your maximum keyword spend is an arbitrary maximum amount of money or budget you are willing to spend on a keyword, if there are no sales before you then drop your bid to its minimum.
- You need to decide on how much money you are willing to lose on a keyword.
You can calculate what you think is the best amount for your Max Keyword Spend, but you can rely on Rules Wizard to calculate this for you.
The calculation is based on your profit margin/target max ACoS and product sale price: Product Sale price multiplied the sum of profit (%) margin + 10% - Depending on your product and your bidding strategy, your Max Keyword Spend can be:
- high as the sales price of your product, or as
- low as simply the dollar profit after deducting all the expenses of your product.
For Example:
If I’m selling a product that costs $20 and it costs me $21 to get a sale,
then this doesn’t make sense because I’m losing at least $1 for every sale, and not to mention whatever I have to pay to Amazon.
Examples
Seller's intention
Selling Price
Max. Keyword Spend ($)
I am launching a product and want to be aggressive.
$20
$20
I want to have a maintenance campaign with this product.
My product is ranked with a lot of reviews, which means I don’t need to be too aggressive.
profit of this product that I’m selling for $20
How much my dollar profit is on the product?
$10
Regardless of the number of clicks a Keyword or Target has, or even the minimum action clicks, as long as the Max Keyword Spend is reached, the bid is dropped immediately.
