Value based bidding (VBB) enables you to maximise the total value of conversions generated by your Demand Gen campaigns.
Value based bidding uses two bidding strategies:
- Max conversion value bidding allows you to maximise the total conversion value of your campaign within a specified budget. You can define the value that you want to maximise, such as sales revenue, profit margins or to assign weight to a specific conversion type when you set up conversion tracking for your account.
- Target ROAS (tROAS) bidding has additional efficiency control and lets you tap into value-based bidding by setting a tROAS for your campaign. Campaigns will then look to acquire users who are likely to have this set return within the selected conversion window that you have indicated.
Benefits
- Optimise your bids to achieve your end goals when you want to target multiple conversion actions or same conversion actions with different values. This could be page views along with purchases, different values of purchases based on location, audience and device, among others.
- If you have a product feed with diverse prices or shopping basket sizes that drastically vary, bids will adjust based on the value driven by a specific conversion.
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 ROAS target that you're trying to achieve.
The table below can help you find out which bidding strategy is best for your campaign.
| Max conversion value | Target ROAS | Max conversions | Target CPA | |
|---|---|---|---|---|
| Goal | Maximise conversion values for budget. This is the preferred option unless you want to have a target bid. | Maximise conversions within your tROAS | Maximise conversions for budget | Maximise conversions within tCPA |
| When |
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Before you begin
- You'll need to accumulate sufficient conversions with value on Demand Gen campaigns, through MaxConversions or tCPA bidding strategy first.
- To qualify for value bidding, you must meet one of the following criteria:
- Option 1: Your campaign must have at least 50 conversions with value within the past 35 days, including a minimum of 10 conversions with value within the past seven days.
- Option 2: Your account must have at least 100 conversions with value across all Demand Gen campaigns within the past 35 days.
Conversions with value means that a conversion with a value of 0 or a negative value wouldn't contribute to the eligibility criteria.
Example: If you had 50 conversions with value in the past 5 days, then you can switch over to tROAS or MCV. If you have 50 conversions from a campaign that ran a year ago, it wouldn't be eligible.
- Use Google Ads conversion tracking with conversion values. Learn more about tracking transaction-specific conversion values.
- We recommend that you don’t make any bid or creative changes for the first 14 days of the campaign in order to ensure stable model training for Google AI.
Best practices
- Keep your campaign unchanged in the first 14 days after you switch to value bidding.
- Set your conversion window as you see fit, but don't change it throughout campaign testing if not urgently needed.
- Use the bid strategy report to evaluate performance.
- Set tROAS 20% lower than your historical average ROAS to initiate your campaign.
Tip:
To determine which ROAS you should set, review the campaign's ROAS (conv. value/cost) over the previous month and use that as your benchmark. We recommend setting a lower than required ROAS to allow the campaign time to ramp up and adjust to the bidding method change.
For example, if the campaign delivered a ROAS of 500% (conv. value/cost = 5), set the target ROAS to 400% to give the campaign some room to adjust to the bidding strategy change.
Instructions
- Select an existing Demand Gen campaign using tCPA or Max conversion as the bidding strategy. Verify that it has collected 50 conversions with value in the last 35 days and 10 conversions with value from the previous 7 days.
- If you don’t have an existing campaign, create a new Demand Gen campaign initially using tCPA or Max conversion as the bidding strategy with value passing.
Note: If you have 100 or more conversions with value in the last 35 days across all Demand Gen campaigns, you can skip this step and set up a campaign that uses value based bidding strategies initially.
- If you don’t have an existing campaign, create a new Demand Gen campaign initially using tCPA or Max conversion as the bidding strategy with value passing.
- Set 'Conversion value' as your campaign goal.
- Set your budget for Max conversion value.
- A tROAS target isn't needed for Max conversion value. Make sure that you have enough budget to acquire 10 conversions per day in your campaign to achieve optimal results. You can use your historical average CPA to set an accurate budget.
Note: If you’ve selected tROAS as your bidding strategy, enter your preferred tROAS. Your initial tROAS goal shouldn't be higher than your historical ROAS achieved within the set conversion window. We recommend that you set it 20% lower to kickstart your campaign. Your target is what optimises scale or campaign ROI.
- A tROAS target isn't needed for Max conversion value. Make sure that you have enough budget to acquire 10 conversions per day in your campaign to achieve optimal results. You can use your historical average CPA to set an accurate budget.
- Evaluate your performance correctly. After your campaign is set up, you can evaluate your campaign performance by going to 'Conversions' and clicking the box for Conv. value/cost.
Note: We recommend that your campaign run for at least three weeks to provide the most accurate data. Account for your average conversion delay when evaluating your campaign. For example, if most of your conversions come in after four days, don't look at the past four days (exclude days from reporting) when evaluating your campaign performance.
