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 that you're tracking.
• You can apply conversion value rules to better express the value of conversions as they relate to your business, and optimise 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 seven 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.
• For Search campaigns, if you recently started reporting conversion value or changed the way conversion value is reported, we recommend that you include the new values in the 'Conversions' column and wait for four weeks or three 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 that you feel comfortable spending up to two 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.

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.

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 maximise 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 that you set. For example, if you set a target ROAS of 500%, Google Ads will adjust your bids to try to maximise 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 optimisation 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.

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 optimise 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%.

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 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) that you'd like to get for each pound that you spend on ads. Bear in mind that the target ROAS that you set may influence the conversion volume that you get. For example, setting a target that's too high may limit the amount of traffic that your ads may get.

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

• When available, use the target recommended in places like the Recommendations page in your account. Targets recommended are based on your historical performance, while accounting for conversion delays.
• Try setting a target ROAS based on the historical data of conversion value per cost for the campaigns that you'd like to apply this strategy to. This will help you maximise your conversion value, while reaching the same return on ad spend that your campaigns have been getting. You should also account for conversion delays.
• To find your historical conversion value per cost data, you'll need to 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. Make sure that the time frame of your ROAS evaluation is in line with your in-app action’s conversion window so that you get the most accurate view of campaign performance.

Bid limits

Setting bid limits for target ROAS isn't recommended because it restricts Google Ads from optimising 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 that 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 optimised 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 optimised for. It averages the changes that 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 optimised for over that period. Bear 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 that you 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 optimised for over that period. Bear 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.

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