Bid shading

Bid shading is a strategy used in online advertising auctions where advertisers intentionally submit bids lower than their true maximum willingness to pay. This technique helps them avoid paying the highest price for ad placements, reducing costs while still maintaining a competitive chance of winning the auction. Essentially, advertisers "shade" their bids downward to get desirable ad slots at a better rate, rather than bidding their full value, which can lead to more efficient spending without significantly sacrificing visibility.