Blog post contributed by Lisa Ho, Senior Customer Success Manager

Bidding is a fundamental aspect of media buying across search, display, and video. It ensures advertisers pay only for what delivers value to their business. Traditional bidding strategies focus on maximizing conversions, clicks, or viewable impressions. However, as businesses evolve, advertisers seek more precise ways to align their ad spend with actual business outcomes.

The solution? 

Bid-to-value—a strategy that leverages first-party data and other critical business insights to optimize bidding decisions. By feeding this data into the system, advertisers can train it to bid toward specific business goals, improving return on investment (ROI).

In this article, we’ll first explore the value of custom bidding and its benefits. In the second part, we’ll share hypothetical use cases, showcasing how you can implement custom bidding based on marketing funnel stages.

Part 1 - Introduction to Custom Bidding and its Benefits

Custom bidding in Display & Video 360 (DV360) allows advertisers to define their own bidding goals based on proprietary business insights. Instead of relying solely on standard KPIs like CTR or CPA, advertisers can optimize toward meaningful business objectives such as customer lifetime value, purchase intent, or engagement quality.

By integrating your own business data like Floodlight conversions, user funnel data, and Google’s AI, custom bidding ensures campaigns bid efficiently in every auction.

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According to Google’s internal data (2023, Global), advertisers using custom bidding have seen a 7x increase in conversions and a 79% decrease in CPA, proving its effectiveness in driving performance.

Key Benefits of Custom Bidding

  • More Control: Advertisers define what success means based on their unique business goals.
  • Improved ROI: Bidding is optimized toward high-value conversions, ensuring better allocation of ad spend.
  • Advanced Machine Learning: Google AI leverages 40+ signals—such as device type, creative dimensions, geo, GA conversions, and Floodlight conversions—to automate bids based on which impressions are most important to you.
  • Custom KPIs: Businesses can go beyond traditional metrics and optimize for outcomes such as loyal customer growth, total cart value, or ad engagement.

Custom bidding is not about building a new bidding algorithm. Instead, advertisers define the impression value using their own data and formulas, configuring   the system to learn and bid according to the business’ specific objectives. For example, if a higher score is placed on a hard conversion event like a purchase, the system will bid aggressively—but only if it determines that impression is likely to drive a purchase. This approach allows advertisers to customize impression valuation, enabling smarter bidding decisions to achieve the desired ROI.

Here are some sample data sources advertisers can leverage in Custom Bidding:

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Part 2 - Leverage Custom Bidding Strategies Across the Marketing Funnel

Successful digital marketing isn’t just about the final conversion; it’s about understanding the value of every interaction along the customer journey. Custom bidding aligns bid strategies with business goals at each funnel stage, ensuring that ad spend is optimized to drive awareness, engagement, and conversions effectively.

Upper Funnel: Capturing Attention for Brand Awareness

In the awareness phase, businesses aim to maximize visibility and audience engagement with high-quality impressions. Standard automated bid strategies might focus on impression quality metrics such as viewability and engagement signals, but custom bidding refines this approach by allowing advertisers to define attention based on their unique preferences. For example, advertisers can set up goals or scripts to value impressions based on a combination of audibility, viewability, site/domain quality, device, and geo-location.

Illustrative Use Case: Maximizing Brand Awareness with Attention-Based Custom Bidding

A global confectionery brand sought to boost brand awareness through display campaigns while keeping impression costs manageable. As an upper-funnel initiative, the goal was to maximize high-quality exposure rather than immediate conversions. However, rising CPMs posed a challenge, especially compared to more cost-efficient video formats.

To optimize reach and visibility, the brand adopted an attention-based custom bidding strategy. 

  • The algorithm prioritized impressions using key signals:
    • Viewability – Ensuring ads appeared in highly visible placements
    • Placement context – Selecting environments suited for brand awareness
    • Engagement likelihood – Focusing on inventory with higher user interaction potential
  • Bids were optimized for impressions more likely to be seen and remembered
  • Helped reinforce brand presence while avoiding unnecessary overspending

By refining how impressions were valued, the brand was able to scale its reach effectively while maintaining ad quality. Additionally, this approach supported a privacy-conscious advertising environment, aligning with evolving industry standards.

Mid Funnel: Driving Product Consideration and Lead Conversions

At the mid-funnel stage, engagement deepens as potential customers research and evaluate products. However, not all conversions hold the same weight. Custom bidding helps advertisers differentiate conversions based on their unique value, ensuring bids reflect the importance of each interaction.

For example, advertisers can prioritize bidding toward the most valuable Floodlight activities by assigning:

  • A higher value to lower-funnel impressions, such as a completed sale.
  • A lower value to upper-funnel impressions, such as page views.

Custom bidding can also be used with:

  • Floodlight Sales tags, to define a revenue parameter to optimize toward.
  • Custom Floodlight variables, to optimize based on basket size, product type, or impressions that increase brand loyalty.

Illustrative Use Case: Optimizing Multi-Touchpoint Conversions with Custom Bidding

A leading automotive brand wanted to improve online engagement while driving in-person sales. Their challenge was balancing multiple conversion goals—such as completed vehicle configurations and financing inquiries—within a single campaign. Standard bidding strategies struggled to weigh these goals effectively, leading to inefficiencies in budget allocation.

The brand and its agency implemented a custom bidding strategy to optimize conversions.

  • Different values were assigned to each conversion touchpoint based on importance.
  • The algorithm prioritized actions that showed higher purchase intent.
  • Bids were optimized dynamically across various engagement stages.
  • This ensured efficient budget allocation, improving both lead quality and campaign effectiveness.

This approach allowed the brand to better align its digital efforts with real-world business objectives, improving the impact of its upper- and mid-funnel marketing initiatives.

Lower Funnel: Maximizing ROAS Through Purchase-Driven Bidding

In the final conversion stage, the goal shifts toward revenue generation. Custom bidding enables advertisers to customize and define how an impression should be scored to achieve ROAS targets. Beyond weighted values and Floodlight tags, advertisers can also use shared conversion data from Google Analytics to inform bidding strategies.

For example, a business can optimize bids based on session engagement by prioritizing impressions from users who click through more than five pages per session and spend at least 10 minutes on-site.

Illustrative Use Case: Driving Conversions with Custom Bidding During Peak Sales Events

A global footwear brand wanted to maximize revenue during high-competition retail events like Black Friday and Singles’ Day. The challenge was identifying and bidding on users with the highest purchase intent rather than relying on basic engagement metrics.

Implementing a custom bidding algorithm that prioritized high-quality sessions and purchase intent.

  • Integrated Google Analytics 360 (GA360) with DV360 to access deeper session insights.
  • Developed a Custom Bidding algorithm to prioritize high-quality sessions and users likely to convert.
  • Assigned higher bid values to signals indicating strong purchase intent, such as:
    • Users who engaged with product pages for extended periods.
    • Those who added items to their cart but hadn’t checked out yet.
    • Repeat visitors showing signs of high interest.
  • Optimized bids dynamically to focus on revenue-driving actions rather than generic engagement.

By aligning bidding with real purchase behaviors, the brand ensured its budget was spent efficiently on users most likely to complete a sale—securing a competitive edge during peak shopping periods.

By optimizing bids toward actual revenue-driving actions, Skechers secured a competitive advantage during peak sales periods.

Conclusion

Custom bidding provides a tailored approach to bidding strategies across the marketing funnel, ensuring advertisers can optimize towards the business outcomes that matter most. Whether the goal is awareness, engagement, or conversions, leveraging first-party data and machine learning enables businesses to drive better performance at every stage. Advertisers who embrace custom bidding gain a significant advantage in efficiency, cost control, and overall ROI.