The amount an advertiser offers to pay for a specific ad placement or action, in an auction-based advertising system where multiple advertisers compete for the same inventory.
Why it matters
Bidding strategy directly affects both cost and volume — bidding too low may mean an ad rarely wins placement; bidding too aggressively can drive up costs across an entire market if many advertisers are competing for the same limited audience.
In a sentence
"We raised our bid on that keyword during peak season, accepting a higher CPC in exchange for more consistent placement."
Related terms
- Often confused with: Budget (a bid is the amount offered per auction or action; a budget is the total amount allocated to spend over a period — a campaign can have a high bid and a small budget, or vice versa).