Description of a Bidding Decision Model

3 important questions on Description of a Bidding Decision Model

What are the six variables for acquisition costs per conversion and number of conversions in the framework for linking bid and profit?

  • Conversion rate
  • Clickthrough rate
  • Number of searches
  • Rank
  • Bid
  • Ad quality

What are the two main points in the intuition on optimizing bids in search engine advertising for lower ranked advertisements?

  • High prices -----> low bids

What is the effect on optimized bids when clickthrough  rates within ranks are increasing?

  • High amount of clicks ------> High bids

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