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As part of the improvements to GDN targeting, Google has introduced group-level settings to control the reach of your ads, which are now supported in the Platform.For the targeting criteria (Placements, Audiences, Topics, etc.) in each group, you can select either Target and Bid or Bid Only. This setting will determine if matching targets need to overlap or can be targeted alone. You can also select a Custom Bid Type that determines which criteria’s URL and bid will be used.
Note: This feature is currently in beta and the Advanced Settings button on the Group Settings page will only be shown if you have opted into the Google Remarketing Lists feature.
This is the default setting. It restricts the ads to only be shown for the group when all of the criteria in the group are matched . For example, you may choose to only show ads on placements with pages containing certain keywords. The Target and Bid setting would ensure ads are only shown on pages that contain the specified keywords (the blue section):
The Bid Only setting will increase the reach of the ads in a group, as it allows ads to be shown when only one of the criteria is matched. For example, you want to show ads on any sites that have content matching your list of keywords, but you also want to show ads anywhere on a list of sites relevant to the product. To do this, you would set Placements to Bid Only:
Note: Display Keywords are always targeted as Broad match and cannot be set to Bid Only.
The Custom Bid Type setting determines which of the matching criteria’s URL and bid should be used. Only one criteria in the group can have a bid. The other criteria have a bid adjustment % calculated from the chosen criteria’s bid. For example, you set Keyword as the Custom Bid Type, so the bid and URL of the keyword will be used. You can then set a bid adjustment % for each placement depending on each placement’s performance.
Below are a couple of external links that offer some insight into this topic: