PPC PPC Bidding Strategies 2 — Questions and Answers
Question 1: What is bid shading in programmatic advertising?
- Artificially inflating bids to win impressions
- An algorithm that lowers winning bids in first-price auctions to avoid overpaying (Correct answer)
- A technique to hide bids from competitors
- A manual process of reducing bids on low-performing placements
Correct answer: An algorithm that lowers winning bids in first-price auctions to avoid overpaying
Bid shading is a DSP algorithm used in first-price auctions that reduces the submitted bid to a predicted clearing price, preventing advertisers from overpaying by the full bid amount.
Question 2: What minimum amount of conversion data does Google recommend having before switching to a Target CPA bidding strategy?
- 5 conversions in the last 7 days
- 15 conversions in the last 14 days
- 30 conversions in the last 30 days (Correct answer)
- 100 conversions in the last 30 days
Correct answer: 30 conversions in the last 30 days
Google recommends accumulating at least 30 conversions in the past 30 days before switching to Target CPA so the algorithm has sufficient data to optimize bids effectively.
Question 3: What happens during the 'learning period' after switching to a smart bidding strategy?
- Ads are paused while Google collects data
- The algorithm experiments with different bids, which may cause performance fluctuations (Correct answer)
- Bids revert to manual CPC until learning completes
- Google charges a higher CPC to gather auction data
Correct answer: The algorithm experiments with different bids, which may cause performance fluctuations
During the learning period, Google's algorithm tests bid levels to understand how they affect conversions, often resulting in temporary performance volatility.
Question 4: What is 'auction-time bidding' as used by Google Smart Bidding?
- Setting bids manually right before ad auctions occur
- Adjusting bids in real time for each individual auction using contextual signals (Correct answer)
- Scheduling bid changes at specific hours of the day
- Allowing competitors to view your bid strategy
Correct answer: Adjusting bids in real time for each individual auction using contextual signals
Auction-time bidding evaluates dozens of contextual signals (device, location, time, user behavior) for every single auction to set the optimal bid in real time.
Question 5: In Google Ads, what is the difference between 'target CPA' and 'maximize conversions'?
- Target CPA focuses on clicks; maximize conversions focuses on impressions
- Target CPA sets a cost-per-conversion goal; maximize conversions spends the full budget regardless of CPA (Correct answer)
- Target CPA is for Display only; maximize conversions is for Search only
- Target CPA requires manual bids; maximize conversions is fully automated
Correct answer: Target CPA sets a cost-per-conversion goal; maximize conversions spends the full budget regardless of CPA
Target CPA tries to achieve a specific cost per conversion, while Maximize Conversions gets as many conversions as possible by spending the full budget without a CPA constraint.
Question 6: Why might an advertiser use a bid cap with a Maximize Conversions strategy?
- To increase impression share on branded terms
- To prevent the algorithm from bidding excessively high amounts on individual auctions (Correct answer)
- To force the strategy to use only exact match keywords
- To limit the number of ad impressions per day
Correct answer: To prevent the algorithm from bidding excessively high amounts on individual auctions
A bid cap (maximum CPC limit) within Maximize Conversions prevents Google from placing unreasonably high individual bids while still trying to spend the full budget.
PPC PPC Bidding Strategies 2
What is bid shading in programmatic advertising?