What is a potential risk of setting a bid cap too low?

Setting a bid cap too low can lead to the campaign not delivering as intended. When the bid cap is below the market rate for ad placements, there is a high likelihood that the ads will not receive enough impressions or clicks. This means the campaign may struggle to reach its target audience effectively. Advertisers set bid caps to control costs, but if the cap is unrealistically low, the algorithms may prioritize other advertisers who are willing to pay higher bids, leaving the low-bid campaign underexposed. Therefore, it is crucial to set a competitive bid cap to ensure that the ads can compete effectively in the auction environment.

The other options highlight different aspects that could be problematic but do not directly relate to the immediate impact of a low bid cap on ad delivery. Budget exhaustion and decreased ad quality may be influenced by other factors, while more ads being approved is typically unrelated to bid caps. The primary concern with a low bid cap is that it restricts the ad delivery needed to achieve campaign objectives.