About Target ROAS bidding

Before you begin

• Before you can apply a Target ROAS bid strategy to your campaigns, you’ll need to set values for the conversions you're tracking.
• You can apply conversion value rules to better express the value of conversions as they relate to your business, and optimize towards conversions from the types of users who are more valuable to you. Use conversion value rules to apply a multiplication factor to conversion values for higher value types of customers, devices, or locations.
• To use Target ROAS bidding, most campaign types need at least 15 conversions in the past 30 days.
  • Display campaigns: At least 15 conversions (with valid conversion values) in the past 30 days across all of your campaigns combined. New Display campaigns no longer require you to have a history of conversions to use Target ROAS bidding.
  • App campaigns: At least 10 conversions every day (or 300 conversions in 30 days).
  • Demand Gen campaigns: At least 50 conversions in the past 35 days (10 of these conversions must have occurred in the past 7 days) in the campaign, or 100 conversions in the past 35 days (across all Demand Gen campaigns in the customer account).
    • Note: Conversions must have a value greater than 0 to be counted as eligible. Campaigns that are eligible for Target ROAS will be automatically allowlisted.
  • Video Action Campaigns: At least 30 conversions in the past 30 days.
  • Hotel campaigns: At least 50 conversions per week at a campaign level.
  • Travel campaigns: At least 50 conversions in the past 7 days at a campaign level.
• For Search campaigns, if you recently started reporting conversion value or changed the way conversion value is reported, we recommend you include the new values in the "Conversions" column and wait for 4 weeks or 3 conversion cycles for your campaign to receive conversion values at a similar rate before adopting.
• We also recommend reviewing your budget settings to make sure you feel comfortable spending up to 2 times your average daily budget. Over a month-long billing cycle, you won't be charged more than your average daily budget would've allowed for over 30.4 days. For App campaigns, it's also recommended to run a Target Cost Per Action campaign type before running a Target ROAS campaign type to understand a baseline ROAS as you set your initial ROAS target. Failure to set a proper initial target ROAS can cause poor performance or low scale.

How it works

Google Ads predicts future conversions and associated values using your reported conversion values, which you report through conversion tracking. Then, Google Ads will set maximum cost-per-interaction (max. CPC) bids to maximize your conversion value, while trying to achieve an average return on ad spend (ROAS) equal to your target.

Some conversions may return a higher ROAS and some may return a lower ROAS, but altogether Google Ads will try to keep your conversion value per cost equal to the target ROAS you set. For example, if you set a target ROAS of 500%, Google Ads will adjust your bids to try to maximize your conversion value, while reaching this target ROAS (find details of the example below). To help improve your performance in the ad auction, this strategy adjusts bids using real-time signals such as device, browser, location, and time of day. It also uses AI to adjust bids based on whether or not someone is on one of your remarketing lists.

Google Ads will recommend a target ROAS value after you’ve created a new bid strategy or selected an optimization score recommendation, and selected which campaigns to apply it to. This recommendation is calculated based on your actual ROAS over the last few weeks. We’ll exclude performance from the last few days to account for conversions that may take more than a day to complete following an ad click or interaction (such as an engaged view). You can choose whether to use this recommended target ROAS value or to set your own.

When to use value bidding

Value based bidding is most helpful if various conversions have different value for your business or if you have a specific Return On Ads Spend (ROAS) target that you're trying to achieve.

The table below can help you find out which bidding strategy is best for your campaign.

Bid adjustments and Target ROAS

Bid adjustments allow you to show your ads more or less frequently based on where, when, and how people search. Because Target ROAS helps optimize your bids based on real-time data, your existing bid adjustments aren't used. There is one exception: You can still set device bid adjustments of -100%.

Implementation

Create a new bid strategy

You can create a Target ROAS bid strategy for a single campaign (standard strategy) or multiple campaigns (portfolio bid strategy) in the following ways:

• Create in a new campaign.
• Create or change from campaign settings.
• Create from the Shared library “Bid strategies” page.

To create a bid strategy, review Set up Smart Bidding.

Settings

Target ROAS

Your target ROAS is the average conversion value (for example, revenue) you'd like to get for each dollar you spend on ads. Keep in mind that the target ROAS you set may influence the conversion volume you get. For example, setting a target that's too high may limit the amount of traffic your ads may get.

Here are a few tips to help you set a target ROAS that’s right for you:

• Before transitioning to value-based bidding, ideally you will already be bidding to the desired conversion goal using a tCPA bid strategy. Be sure you report values across all relevant campaigns for 4 weeks or 3 conversion cycles (whichever is longer) before determining their ROAS target and activating value-based bidding. Learn more about changing biddable conversion goals.
• ROAS target should be at or below the ROAS compared to your historical performance.
  • To find this, select Modify Columns from the “Columns” drop-down and add the Conv. value/cost column from the list of "Conversions" columns. Then, multiply conversion value per cost metric by 100 to get your target ROAS percent.
• Ensure the time frame of ROAS evaluation excludes the most recent conversion delay period to get an accurate view of campaign performance.
• Target recommendations can also be found in the Recommendations tab, during campaign construction, within the bid simulator or while creating a strategy at the campaign or portfolio levels.

Bid limits

Setting bid limits for Target ROAS isn't recommended because it restricts Google Ads from optimizing your bid using AI. It can also prevent Google Ads from adjusting your bids to the amount that best meets your target ROAS. Bid limits are available for Search and Shopping portfolio bid strategies. If you do set bid limits, they’ll be used in Search Network auctions only, and are only available for portfolio bid strategies.

• Max. bid limit: The highest CPC bid you want Google Ads to set when using Target ROAS.
• Min. bid limit: The minimum max. CPC bid you want Google Ads to set when using Target ROAS. Note that Google Ads might set a max. CPC bid that's below your minimum bid limit, generally due to smart pricing. This means that the bid limit you set here isn't the absolute lowest bid that could be set.

Ad group targets

You can apply Ad Group Targets for both Standard and Portfolio bidding strategies. With a portfolio strategy, your campaigns, ad groups, and keywords are optimized collectively for a single target. Alternatively, you can set individual targets for each ad group but this isn't recommended because it can restrict Smart Bidding.

Keep in mind, if you don’t need to set targets for individual ad groups, a portfolio strategy may be able to offer better performance.

Average target ROAS

Your average target ROAS is the traffic-weighted average ROAS that your bid strategy optimized for. It averages the changes you’ve made to your target ROAS for any given time period. For this reason, your average target ROAS may be different from the target ROAS that you set.

This metric lets you measure the ROAS that your bid strategy targeted for specific time periods. By changing the date range, you can learn what your strategy actually optimized for over that period. Keep in mind, you won’t have an average target ROAS for time periods without traffic.

You’ll find the average target ROAS metric in the performance table at the top of your “Campaigns” page, so that you can evaluate actual performance against target performance. Select “Avg. Target ROAS” from the “Performance” category when adding a new column, or by adding it to the performance chart.

It's recommended to monitor your campaign performance and average target over time.

Where you’ll find these metrics

The average target ROAS metric lets you measure the ROAS that your bid strategy targeted for specific time periods. By changing the date range, you can learn what your strategy is actually optimized for over that period. Keep in mind, you won’t have an average target ROAS for time periods without traffic.

You can add a column to view your average Target ROAS metric in the performance table so that you can evaluate actual performance against target performance. At the top of your “Campaigns” table, select the column icon under the “Performance” category, or by adding it to the performance chart. Select “Avg. target ROAS”, “Avg. target cost per install”, or “Avg. target cost per in-app action” from the “Performance” category when adding a new column.

You can also find this metric in your bid strategy report beside your “Actual ROAS”, which represents the actual ROAS that this strategy was able to achieve. Learn how to Find your bid strategy reports.

Average target ROAS is available for both standard and portfolio bid strategies.

Troubleshooting

Adjusting bids and budgets is the best way to control performance.

When using value-based bidding with a target ROAS, if you want to increase conversion volume, consider gradually reducing the target ROAS. This allows the bid strategy to enter more auctions and generate more volume. Alternatively, if you want to increase conversion value, you may raise the target ROAS. When you change targets, the bidder will react immediately but will need some time to hit the new target (give it 1-2 conversion cycles). Account for bid changes when assessing performance by assessing ROAS performance over time versus average target within the bid simulator. Learn How to make target adjustments with Search Smart Bidding.

Follow these troubleshooting tips to set a target ROAS that’s right for you:

• Before transitioning to value-based bidding, ideally you will be already bidding to the desired conversion goal using a tCPA bid strategy. Be sure to report values across all relevant campaigns for 4 weeks or 3 conversion cycles (whichever is longer) before determining your ROAS target and activating value-based bidding.
• Your ROAS target should be at or below the ROAS compared to your historical performance.
• To find this, select Modify columns from the “Columns” drop-down and add the Conv. value/cost column from the list of "Conversions" columns. Then, multiply your conversion value per cost metric by 100 to get your target ROAS percent.
• Ensure the time frame of your ROAS evaluation excludes the most recent conversion delay period to get an accurate view of campaign performance.
• Target recommendations can also be found in the Recommendations tab, during campaign construction, within the bid simulator or while creating a strategy at the campaign or portfolio levels.

Related links

• About Smart Bidding
• Set up Target ROAS bidding for Shopping campaigns
• About bidding in App campaigns
• About automated bidding
• About conversion value rules
• Value based bidding for video action campaigns
• Tips on measuring Target ROAS performance
• How to set up Target ROAS for Hotel Ads