When optimizing bids for search, social, and display ads, it’s important to account for headroom.

The headroom is the difference between what you bid (Max. CPC) and what you pay (the delivered Avg. CPC). You can view your current headroom at the Strategy level by adding the Headroom column from the View Builder.

The Automated Headroom Adjustment feature adjusts calculated keyword bids by a CPC to Bid Adjustment to inherently account for headroom. When using this feature, advertisers no longer need to leverage the Strategy Boost setting to account for Headroom. Strategy boost should be set to zero when using the Automate Headroom Adjustment feature unless boost is being used for a reason other than accounting for headroom, such as handling a sale or seasonality.

Understanding The CPC To Bid Adjustment Calculation

Headroom is defined using the following formula:

[(Avg. Bid – Avg. CPC) / (Avg. Bid)] 

The CPC to Bid Adjustment is calculated as the click-weighted average of this formula over all biddables in the Strategy including keywords, placements, product targets, and creatives.

Note: Keywords on bid and position override are excluded from the calculation.

When The CPC To Bid Adjustment Is Updated

The CPC to Bid Adjustment is re-calculated every seven days by default, as well as when any of the following events occur:

• When campaigns are added to or removed from a Strategy.
• When a Strategy is turned from ‘Off’ to either ‘Preview’ or ‘Traffic’.
• When a Strategy is copied.

The frequency of calculation can be modified to a different interval than the seven day default. Please reach out to your account manager to have this setting modified.

Where To Find The Calculated CPC To Bid Adjustment In The platform

You can see the current calculated adjustment for a given Strategy in the CPC to Bid Adjustment % column in the Strategy grid.

This adjustment is also now shown within the Boost section of the Bid Details page for all objects within a Strategy.