Definition: A PPC bid (or keyword bid) commonly used in Google Adwords, is a bid placed in a pay-per-click auction to help secure ad placement at the top of search results. Online businesses bid on specific keywords or keyword groups in an attempt to secure ad space for important terms relative to their business.

Bids play a major role in PPC ad placement

Bids for placement on the Internet are especially popular with search engines and marketers. Here is some background on the bidding process:

  • The prominence of the link determines how much the advertising business is willing to pay.
  • The bidding process can become a bit controversial at times as it favors online businesses that are willing to place high bids.
  • Online businesses that desire to market a specific product, service or website that is highly relevant to specific search terms sometimes find that placing high bids is not a prudent use of their marketing budget.

Bid modifiers

Bid modifiers represent a certain percentage of the amount of the bid in terms of location, electronic device and scheduling. Consider the following example:

  • Company A's maximum bid for a keyword is $2, yet the ads will only be displayed on computers.
  • If company B only wants to pay a maximum of $1 for its advertisements to appear on web-enabled mobile devices, it can do so by establishing its bid modifier at -50%.

This feature makes for efficient use of an online business's limited marketing dollars. Such bid modifiers are available through Bing Ads and Google AdWords. These modifiers can be applied to specific geographic areas that a particular business would like to target. They can even be applied to specific times or electronic devices that the business has pinpointed as "optimal" for its target audience.

Real-time Bidding

Often referred to with the acronym of “RTB,” real-time bidding is a means of buying and selling marketing space. This space is auctioned off on a “per impression” basis. The auction takes place in an automatic fashion, similar to the electronic trades made to buy and sell investments on financial markets. If the bid wins, the buyer's advertisement is placed on the publisher's website.

This style of bidding empowers advertisers to easily streamline ads across numerous networks. The most significant difference between real-time bidding and traditional static auctions is that real-time bidding is conducted on a per-impression basis. Alternatively, static auctions contain groups that can include thousands of impressions.

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