How are the new bid adjustments calculated?

There are two methods to get suggestions for bid adjustments; Intelligent Suggest and Rule-Based.

  • Intelligent SuggestThis method uses machine learning and factors in a lot of attributes (including industry vertical) to make a bid recommendation.
  • Rule-BasedThis method lets you build your own rules and use your own formulas to set bid adjustments. We recommend using this only if you have a clear strategy that you want to use to set your bids. For example, you can choose to set bids using the CPA of a specific location. You'll also find some pre-defined strategies (Target Cost per Click, Target Cost per Conv. and Target Conv. Val. per Cost).

The pre-defined strategies can be tweaked by changing aggressiveness (low, medium, high).

Overall in the tool, the bid adjustment suggestions are made using the following formula:

Step 1: Bid Adjustment % = Aggressiveness*((Target CPA/Current CPA)-1)
Step 2: This bid adjustment % is stacked over the current Bid adjustment to find out the effective bid adjustment to be applied.

For example, let's say that for a certain campaign, you get a recommendation to adjust the bids by 32% for a region. This is how the suggestion is calculated:

Step 1.

Bid Adjustment Calculation: 30*((100/167.42)-1), which is -12%

Step 2.

The effective bid adjustment which will be applied will be calculated as
= Current Max CPC* (100-12)/100 * Current Bid Adjustment(50%)
= Current Max CPC * 0.88 * 1.5 = Current Max CPC * 1.32

As the new bid adjustment should be within Current Max CPC*1.32, the bid adjustment recommended by the tool is 32%

Why isn't Impression Share available in the metrics viewing column?

Impression Share data for Geo Bid Adjustments is not currently available from Google Ads for locations, which is why you won't see it among the options for column views. 

However, when choosing the goal inside the tool (increase clicks, conversions, ROAS, etc), the system takes into consideration the existing campaign performance for the geographic location target, and will then recommend bid adjustments based on factors such as Avg. CPC for the campaign's performance for a location on a vertical, as well as the campaign's performance itself. Based on this gathered information, the system will identify and recommend bid adjustments.

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