The bidding has to be performed on certain keywords and the selection of the keywords depends on you. Calculations are performed by Google at that time when for bidding on certain keywords, a search query is run by a user. For a certain keyword, the most relevant ads are grouped together by Google. After that, the highest bid ads are determined by it. The ad auction is usually won by the highest bid as well as the most relevant ad. “Budgets and bids” is a category of recommendations of Google Ads which will help in optimizing the strategy of bidding.

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