The Bid Simulator will allow advertisers to simulate what could have happened had they bid differently on the previous campaign week. Take note of the word “previous” for this feature can’t predict scenarios but it can re-calculate the number of impressions an ad could have shown. This is all based on the previous weeks’ data, if a different maximum CPC had been chosen.
According to Google AdWords’ Dan Friedman, “The feature provides increased transparency into the AdWords auction and gives you the insight to make more informed bidding decisions to meet your advertising objectives.”
With this feature the advertisers can make better judgments concerning which keywords to alter spending on. This gives a much better look of the trade-off between the cost and click-through volume.
According to Google, the Bid Simulator doesn’t work for all keywords. “The Bid Simulator requires historical information in order to provide click and cost data for different bids. If a keyword didn’t receive many clicks in the last seven days, it isn’t possible to simulate clicks and cost.”
