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Bidding Strategies: Target ROAS

Google always have fantastic bidding strategies to make PPC account managers’ lives a little easier. One of the many bidding strategies they currently have is Target Return On Ad Spend. This attempts to get as much revenue by adjusting bids automatically in real time to work to achieve your target return on ad spend.
This strategy is for E-Commerce clients only, as you need to put in place the amount of revenue you want to earn back from each pound you spend.

Target ROAS
via Flickr

An example for using Target ROAS, for every £1 you spend you want back £8 your target Return On Ad Spend is 800%.
What Target ROAS should I use?
When you are trying to determine the right target return for your campaign it is vital that you look at your historical conversion data.
The best statistics to look at is conv.value/cost. This is a field you can add by going to Columns -> Modify columns -> Conversions.
You should look to take the conv.value/cost and times it by 100 to get your target ROAS for you campaign or ad group.
Google provide you an average targets but it is worth checking your own data and making the call yourself on the correct one to use.
How to set up 

  1. Firstly you do need conversion tracking implemented with a value assigned to it
  2. Work out what your Target ROAS is
  3. Shared Library -> Bid Strategies -> Create Target ROAS ->Set your Target ROAS and apply to your campaigns ad group or keywords


Target ROAS
Advice from Google

Requirement of using Target ROAS

  • Some form of conversion tracking setup with value assigned to it
  • 30 conversions in 30 days

I personally use ROAS and have seen ROI for clients improve and I have not needed to adjust bids once.
If you see you are consistently hitting your ROAS on a monthly basis, look to increase them and see how far you can increase them. For example if your target is 500% see if you can increase that to 520% to improve performance further and so on.

  • ppc
  • Target ROAS
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