Value-based bidding is a subset of Google Smart Bidding that allows customers to optimize campaigns based on the value brought to their business, maximizing conversion value within a given budget and Target ROAS, which is optional. It differs from conversion-based bidding (Maximize Conversions with an optional Target CPA), which aims to maximize conversion volume.
Value-based bidding includes Maximize conversion value with or without a Target ROAS
- Use Maximize conversion value without a target ROAS if you want to generate as much value as possible within your daily budget. This is best for campaigns that consistently spend the daily budget.
- Use Maximize conversion value with a target ROAS if you want to Maximize conversion value within set efficiency constraints. This is best with uncapped budgets.
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On this page
- What you need to use value-based bidding implementing
- Best Practices for value based bidding
- Activating value-based bidding
- Managing value-based bidding performance
What you need to use value-based bidding
Consider the following criteria to determine whether value based bidding would work well for you
- Objective: Ensure that a value-based bidding strategy aligns with your marketing objectives. Do you want to differentiate campaign performance for customers, products, or services based on the values they bring to your business? If you care more about driving conversion volume, consider Maximize conversions bidding with an optional target CPA instead.
- Unique values: Ensure that you are reporting two or more unique values for your conversion goals
- Set expectations: Value-based bidding will maximize the conversion value within the constraints of a given campaign (budget and ROAS target where applicable). This means that based on those factors, higher value customers will be prioritized. Keep this in mind when comparing tCPA performance, which optimizes for conversion volume irrespective of value. When using value-based bidding, evaluate performance based on the conversion value your campaign is generating relative to the conversion values you measure and report.
Best Practices for value-based bidding
This section covers best practices specifically as it relates to conversion goals for value based bidding. Pick a single point in your lead-to-sale journey to use for bid optimization.
- Conversion delay: When selecting your conversion goal, consider both accuracy and delay. For example, your final purchase might have the most accurate values. If the delay is too long for you to manage, consider selecting a goal earlier in the consumer journey, like a qualified lead.
- Volume: Your conversion goal should have at least 15 conversions in the last 30 days at the account level. Less conversion volume can make for noisier data when assessing performance.
- Value Reporting:
- You must report two or more different values to your conversion actions. These can be real economic values, like revenue or proxy values, like a lead score. You can measure multiple values for a single conversion goal (dynamic values) or the same conversion value for two or more unique conversion events (static values).
Example:
- Static proxy values: every phone call lead is worth $25 and every lead form submit is worth $50.
- Dynamic economic values: a unique revenue value is reported for every online sale.
- Feed conversion data to Google as soon as possible. Keep the following in mind:
- Shorter conversion delays (less than 7 days) are preferable.
- The conversion delay refers to the time between the user’s click and the time the conversion is reported to Google. Depending on the measurement configuration, consider the below scenarios:
- Conversion data is uploaded in a continuous stream (as opposed to a single batch), between 1 and 7 days after the click. When launching a new value-based bidding strategy, this regular inflow of data facilitates a quicker ramp up.
- Zero conversion data is uploaded until 7 or more days after the click. If it takes 7 or more days post-click for 100% of conversions to be uploaded to Ads, the initial ramp up period for value-based bidding may take several months.
- Report value data as soon as possible. It’s critical to do so consistently as conversions occur. Daily offline uploads are optimal, since they give the bidder constant information from which to learn and optimize. Read the Offline conversion imports FAQs.
- Smart bidding will be impacted by any delays in uploading conversions.
- Don’t backfill your value data. This can impact performance.
- You must report two or more different values to your conversion actions. These can be real economic values, like revenue or proxy values, like a lead score. You can measure multiple values for a single conversion goal (dynamic values) or the same conversion value for two or more unique conversion events (static values).
You may observe conversions occurring with varied delays up to 7 days after users click on an ad. Instead of waiting for 7 days after the click to report any conversions to Google, report them immediately if they occur online or at the end of the day if using an offline feed. Maintain this pattern consistently to ensure good performance.
Activate value-based bidding
Before you enable value-based bidding for your campaigns, ensure that you have checked your goals.
- Determine your goal: Does your conversion goal need to change? If so, begin optimizing to the new conversion action before bidding to value. For example, if you’re bidding to Lead Form Submits on target CPA and want to bid to Qualified Leads on Target ROAS, transition to Qualified Leads on CPA first. You can begin passing the values while bidding to CPA prior to enabling value-based bidding. Learn more about Changing conversion goals and actions used for Smart Bidding for more information on how to transition smoothly.
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Upload values once you’re bidding to your desired conversion goal, upload values for 4 weeks or 3 conversion cycles, whichever is longer, before activating value-based bidding. Avoid backfilling historical value data.
- Set reasonable targets: If you have a limited budget, it’s best to use Maximize conversion value bidding without a Target ROAS. If you have an unconstrained budget and you prefer to set a target, review your historical 30 day ROAS performance data, and use it as a benchmark to set a conservative target.
- If you want more conversion value or volume after opting in, use bid simulators to help you set a lower ROAS or higher budget target that is aligned with your goals.
If you want to test value bidding with a campaign experiment, refer to About Value based bidding campaign experiments article for a list of steps and best practices. It’s important to set up the trial arm for success and follow the strict ramp up timelines.
- Ensure that ROAS targets and changes are in line with CPA targets and changes in the control arm. Not doing so can lead to an unfair test.
- If the experiment arm is slow to ramp up, lower ROAS targets are needed to increase auction eligibility.
Managing value-based bidding performance
Once you activate value-based bidding, there are a number of tools and best practices to keep in mind to ensure your campaign performance stays on track. Read these tips on measuring Target ROAS performance for details on the following:
