Paid Search: Auction Mechanics, Structure and Bidding
Paid search in the CDMP exam focuses on how the ad auction actually works, how accounts are structured for control, and how bidding strategy follows the business goal. Expect questions that ask you to interpret performance data and choose the right optimisation lever rather than simply define acronyms.
The auction
Ad Rank determines position and eligibility, and is driven by the bid, ad quality and expected impact of formats and assets. Quality Score components are expected CTR, ad relevance and landing page experience. Higher quality lowers what you pay: actual CPC is roughly the Ad Rank of the ad below divided by your own Quality Score, plus a nominal amount. That is why a well-built campaign can outrank a higher bidder.
Structure and targeting
Account hierarchy runs campaign → ad group → keywords and ads. Match types: exact [keyword], phrase “keyword” and broad, all of which now include close variants, so broad match needs tight negative keyword lists and reliable conversion data. The search terms report is routine hygiene, not an occasional task: mine it weekly for irrelevant queries and add them as negatives. Layer audiences (in-market, remarketing, customer match) for bid adjustments and exclusions.
Bidding and budgets
Manual CPC for control and low data; maximise clicks for traffic; target CPA and target ROAS once conversion tracking is stable. Diagnose impression share lost to budget versus lost to rank - the first is a budget conversation, the second a quality and bid conversation.
Worked example
Campaign A: spend £2,000, 400 conversions, revenue £8,000. Campaign B: spend £1,500, 200 conversions, revenue £9,000. CPA: A = £5, B = £7.50. ROAS: A = 4.0, B = 6.0. If the stated target is profit-efficient revenue, B is the better performer despite the weaker CPA, and budget should shift toward B while testing whether A's volume can be bought more efficiently. If the target were maximum conversions within a CPA ceiling of £8, B would fail and A would win. Always optimise against the declared business metric.
Traps
- Reporting CTR as a business outcome rather than a diagnostic.
- Judging campaigns on CPA when the target is ROAS, or the reverse.
- Scaling broad match or smart bidding before conversion tracking is trustworthy.
- Ignoring search terms, so budget leaks into irrelevant queries.
- Forgetting that landing page experience is a Quality Score input, not a separate project.