The Bid Suggestion Engine Engine combines key metrics from your products including base values such as your Margins and COGS (Cost of Goods Sold) with historical performance data such as Clicks, Impressions, Ad Spend, Conversions, Sales to generate a Suggested Max CPC bid for your products in Shopping campaigns.
Bid Suggestions are used in two distinct ways:
Add Products: These initial suggestions are calculated based primarily on your Cost (COGS) and Margin. The bids are set at a level that is geared towards ensuring that products do not overspend in a select time frame
Update Bids: Suggestions when performing bid updates begin to factor in historical performance metrics to provide a suggested bid that may be less than or greater than the current bid based on expectations that the products may cause either a profitable return or net loss. The suggestion is also influenced by your selected, account-wide Date Range: