The Bid Modifier is a crucial tool in the bidding process that dictates the level of aggressiveness for placing bids. It functions in relation to the ACOS limit, indicating how close the bidder is willing to approach this limit to achieve performance objectives. For external campaigns, users need to manually adjust the Bid Modifier to control performance, ensuring it aligns with their strategic goals. In contrast, smart campaigns benefit from AI-driven adjustments to the Bid Modifier, which are automatically calibrated based on the campaign's specified goals. However, users retain the flexibility to temporarily override this automation if necessary, providing a balance between automated efficiency and manual control.

The ACOS Limit represents the maximum Advertising Cost of Sales (ACOS) an ad group can achieve before surpassing the break-even point for the products within that group. By setting this value, the bidder knows the exact ACOS threshold to avoid exceeding, ensuring the ad campaign does not operate at a loss.

The Bid Modifier further refines this process by indicating how close you want your bids to be to the ACOS limit. A bid modifier of 100% tells the bidder to aim for an ACOS that is precisely at the break-even point. A bid modifier below 100% suggests a desire to perform under the limit, thereby making a profit on your ads. Conversely, a bid modifier above 100% indicates a willingness to bid more aggressively, even at the risk of incurring a loss, to boost the visibility and promotion of your ad.

Here are some examples for ACOS Limit and Bid Modifier working together:

One of the key advantages of using Smart Campaigns is the automated management of your bid modifiers. Predictive AI continuously adjusts your bid modifiers to ensure optimal performance, based on your set goals. This eliminates the need for manual adjustments and trial-and-error to determine the best settings, as the AI handles it all for you, providing an efficient and hassle-free advertising experience.