How does value-based bidding work?
Value-based bidding is a Smart Bidding strategy that uses machine learning to drive the highest click-through rate possible, by bidding for conversions that drive business objectives.
Value-based bidding is a Smart Bidding strategy that uses machine learning to drive the highest impressions possible, by bidding for conversions that drive business objectives.
Value-based bidding is a Smart Bidding strategy that uses machine learning to drive the highest target impression share possible, by bidding for conversions that drive business objectives.
Value-based bidding is a Smart Bidding strategy that uses machine learning to drive the highest conversion value possible, by bidding for conversions that drive business objectives.
Explanation
Analysis of Correct Answer(s)
Value-based bidding is a Smart Bidding strategy that focuses on maximizing the total conversion value from your campaigns. The core principle is that not all conversions are created equal; some are more profitable for your business than others.
- It uses machine learning to analyze numerous real-time signals (like device, location, and time of day) to predict the potential value of a conversion from each auction.
- The system then automatically adjusts bids to prioritize auctions that are likely to result in higher-value conversions, thereby maximizing your return on ad spend (ROAS).
- Specific strategies that use this logic include Maximize conversion value and Target ROAS.
Analysis of Incorrect Options
- Highest target impression share: This goal is for visibility-focused strategies. The Target Impression Share bid strategy aims to place your ads at the top of the page or anywhere on the results page as often as possible, not to maximize value.
- Highest click-through rate (CTR): While a high CTR is often a positive signal, it is not the primary optimization goal of value-based bidding. Strategies like Maximize clicks focus on driving traffic, not the value of that traffic.
- Highest impressions: This is an awareness-focused metric. Bidding strategies like Viewable CPM (vCPM) prioritize getting your ad seen by as many people as possible, which is different from driving valuable actions.