Value based bidding strategies

About value based bidding strategies

Value based bidding considers the value that different Floodlight activities may have for your business. Use value based bidding strategies to optimize your bids to achieve more value, rather than simply a higher number of conversions. 

Value based bidding uses two bid strategies:

• Maximize conversion value: Allows you to maximize the total conversion value of your line item within a specified budget. Display & Video 360 will automatically set bids that are based on a predicted conversion value. You can assign a static value in your Floodlight activity to guide the bidding systems toward higher value conversions (i.e. apply different weights to each Floodlight activity). 
• Target ROAS: Specify a specific return on ad spend goal, based on the sales revenue collected through your Floodlight activities. Line items will seek to acquire users who are likely to have this set return within the selected conversion window. 

Before you get started 

There are a few set-up steps before you get started with value based bidding: 

1. Enable Floodlight optimization for YouTube and Demand Gen: Floodlight optimization for YouTube and Demand Gen must be enabled for your advertiser to use value based bidding. These bid strategies are not available to YouTube line items that use YouTube-enabled Floodlight activities. 
2. Navigate to the Floodlight activities you want to optimize toward in the Floodlight Group tab > YouTube Value based bidding and select the conversion value type to use for conversion tracking. The value passed each time a Floodlight activity is triggered represents the value of each transaction. 
   • Use sales value passed in this Floodlight tag to optimize towards true conversion value & ROAS. If you use Sales Floodlight activities, a Revenue parameter is automatically available in the tag to collect the value. This option is available only for sales Floodlight tags.
   • Use weight defined below to manually assign an approximate value or weight to conversions. Weighted values must be a whole number (no decimals). This option is available for both sales and counter Floodlight tags. Only one option (conversion weights or sales values) can be selected and applied at a given time.

Use value based bidding strategies for a YouTube video action and Demand Gen line item

1. Create a YouTube video action line item using Floodlight optimization, or a Demand Gen line item initially using target CPA or maximize conversions as the bidding strategy. 
   • If you plan to use target ROAS as your value based bidding strategy, start your line item as target CPA first.
   • If you plan to use Maximize Conversion Value as your value based bidding strategy, start your line item with Maximize Conversions.

     When selecting Floodlight activities to optimize towards, ensure you select two or more when using Floodlight activities that leverage conversion weights, so the bidding algorithm can optimize towards delivering the highest value.

     It may be more beneficial to use Maximize Conversions bidding if you’re using only one Floodlight with a conversion weight.

2. Monitor your line item until it is eligible to use value based bidding strategies. To be eligible the YouTube video action line item must drive at least 30 conversions with a sales or weighted value within the last 30 days (distributed across at least 2 days in this period). 

3. Once you’ve collected enough conversions, update the YouTube video action line item to use value based bidding. 
   1. Navigate to your existing insertion order. Click the name of the YouTube video action or Demand Gen line item. 
   2. Click Line item details.
   3. In the Bid strategy section select your value based bid strategy:
      • Target ROAS: To determine your target, review the line item's ROAS over the previous month as reported in the YouTube Conversions report. Your initial tROAS goal should not be higher than your historical ROAS achieved within the set conversion window. Do not consider any time period prior to having Floodlight optimization enabled. 
      • Maximize Conversion Value: Set your budget. Make sure that you have enough budget to acquire 10 conversions per day in your line item to achieve optimal results. You can use your historical average CPA reported in the YouTube Conversions report. Do not consider any time period prior to having Floodlight optimization enabled.

After your line item is set up, you can evaluate your line item performance by analyzing your Conversion Value or ROAS.