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Target ROAS (return on ad spend) is a bidding strategy that allows you to set a profit value you want from your ad investment. Once set, google ads optimizes your ad to bring the most sales on each dollar spent, focusing on meeting your set ROAS.
Target ROAS is set in percentage. You can either calculate it by sales value ÷ ad spend × 100 or generate it through your previous campaigns.
To do that, head to your previous campaign and add the column Conv. value/cost. Under this column, select the value from your most performing ad.
Example
Let’s say your sales expectation is $100 for each $20 spent. So, you set your target ROAS as $1000/20 x 100 = 500% or pick a percentage from your old campaign. Google will optimize your ad bidding to bring in 500% returns in sales.
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Things to be mindful of in target ROAS
Tracking
Google needs your conversion tracking enabled to determine when it is bringing in conversions and when it needs to adjust your bids to better the outcome. Without it, your ROAS strategy will yield zero fruits on an exhausted budget.
Historical data
Google ads learn from your previous ads to better interpret customer and keyword performance signals. Without enough data from your last ads, google ads can’t provide the best returns in sales you hope for. It also helps you set a realistic ROAS.
To use this strategy your past campaign data should have at least 40 to 50 conversions within a month.
Realistic expectation
Setting a pretty high ROAS for your ad can yield poor returns. This is because such high expectation restricts google from doing its best to run your ads on terms that can bring in the most sales on a lower set value.
Start your ad campaign with a lower value than your historical best sales performance. So, if your top past sales return is $80, you want to start around $70 and optimize as you go.
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Frequently asked questions
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To effectively use the Target ROAS strategy in lead campaigns, set a desired conversion value to optimize outcomes. You can read more about how in detail here.
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Maximize Conversion automatically adjusts bids based on lead performance, ensuring optimal results for your budget. To delve deeper into this strategy, click here for more insights.
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Maximize clicks is an automated bidding strategy that helps businesses drive the most click-throughs on their ads call-to-action while spending their daily budget. Click here to explore strategies for boosting your sales.
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