Optimization, Budgeting, and Bidding Strategy
What this domain tests
Optimization is the loop: harvest converting search terms into exact-match targets, negate wasteful terms, adjust bids by placement and performance, and reallocate budget toward efficient campaigns. Know bidding strategies (dynamic bids down only, up and down), placement multipliers, budget pacing, and dayparting where available. Understand portfolio/budget caps, campaign structure hygiene, and the trade-off between scale and efficiency (ACoS targets vs. growth goals).
Traps
- Cutting bids too aggressively kills impression share and learning.
- Budget caps can starve high-performing campaigns; check "out of budget" status.
- Negating a term that also converts in another match type can hurt - check before negating.
- Placement multipliers compound with bid changes; recalculate CPA after each change.
- Optimizing to a single ACoS target ignores NTB and halo value.
Worked example
A campaign has ACoS 40% against a 25% target. Pull the search term report: suppose 30% of spend is on non-converting terms. Negating those cuts spend ~30% with little sales loss → ACoS ≈ 28%. Then trim top-of-search multiplier from 50% to 25% to close the gap. Rule of thumb: fix waste (negatives) before cutting bids, because negatives improve efficiency without sacrificing reach.
Key concepts checklist
Harvesting, negatives, bid adjustments, placement multipliers, budget pacing, out-of-budget status, ACoS targets, NTB and halo.