How does the metoda Ad Optimizer optimize bids?
- Bid optimization is taking into account the most recent performance data.
- Bid optimization compares the actual ACoS to the Target ACoS of the campaign.
- If ACoS > TACoS, bids are reduced.
- If ACoS < TACoS, bids might be increased (if budget allows).
- Optimization of bids is implemented every morning so that new bids are really reflected in the campaigns performance of that day.
- Only active campaigns (SPs & SBs) with TACoS can be managed via bid optimization.
Mechanism of optimization for different kinds of campaigns:
- Campaigns with no costs recently
- Assumption: campaigns bid is too low to be competitive
- Bids are increased steadily in order to generate clicks and test the potential of this campaign
- Campaigns with costs recently
- but no revenue
- Goal: reach campaign's TACoS
- In order to reach the TACoS, conversions are necessary, but these are not always reached immediately.
- Allow the campaigns to generate enough clicks, so that a conversion is likely
- If the conversions are not reached, bids are reduced again
- and also generated revenue
- Campaign has an ACoS, which can be higher or lower than its TACoS
- Bids are increased or decreased depending on whether TACoS has been reached or not
- but no revenue
Adding the available budget into the equation:
- If the budget is sufficient (indicated by a budget factor of 1), the campaigns are optimized based on their TACoS
- If the budget is not sufficient (indicated by a budget factor below 1), the campaigns are optimized based on their (TACoS * Budget factor) --> Ad Optimizer tries to be even more efficient than defined as a goal due to budget scarcity