Value-Based Bidding (VBB) tackles a long-standing challenge in the business world. While most companies traditionally optimize their ad spend for total conversions, VBB introduces a more refined approach. It allows marketers to go beyond the basics and consider factors like profit margins and customer types, enabling a more sophisticated budget allocation. Value-based bidding, Pmax campaigns and smart bidding, to name a few, have emerged as a result of the integration of AI and machine learning in ad automation.
Successfully implementing VBB can significantly boost Return on Advertising Spend (ROAS) by precisely identifying prospects and segments. Rather than just focusing on media performance, VBB aligns bids with tangible business outcomes.
Before adopting this strategy, advertisers struggled to allocate ad spend based on customer value, often overspending on low-value users, and underspending on high-value ones. With value-based bidding, the business value of a customer guides ad spend allocation.
In this blog, we will be discussing some frequently asked questions in relation to value based bidding including:
- What is value-based bidding?
- How does value-based bidding work?
- What are the benefits of value-based bidding?
- How does value-based bidding affect your ad spend?
- What campaigns can use value-based bidding?
- Why use value-based bidding?
- Who is value-based bidding for?