Should you switch to Target ROAS bidding?

By: Jyll Saskin Gales, Google Ads Coach

Have you been running your Google Ads campaigns for a while now, but feel like you've hit a plateau in terms of conversions? It might be time to consider switching to Target ROAS bidding. While manual bidding can be effective enough, who wants "effective enough" campaigns? Target ROAS can help you scale and achieve even better results.

Let's explore what Target ROAS bidding is, how it works, and whether it's the right choice for your campaigns. Here's what we'll cover:

• Understanding Target ROAS bidding
• Benefits of using Target ROAS
• When to use Target ROAS (and when to stick with manual bidding)
• How to set up Target ROAS bidding in your campaigns

What is Target ROAS Bidding in Google Ads?

Target ROAS (Return on Ad Spend) is a smart bidding strategy that helps you achieve a specific return on your ad spend.  Think of it like this: you tell Google Ads your desired ROAS, and the system automatically sets your bids to try and achieve that target.

For example, if you want to achieve a 3x ROAS (meaning you want to generate $3 in revenue for every $1 spent on ads), you would set your Target ROAS to 300%. Google Ads will then use its machine learning algorithms to optimize your bids and try to get you as close to that target as possible, given your conversion rate and value per conversion.

Why Use Target ROAS bidding in Google Ads?

Target ROAS offers several advantages over manual bidding:

• Increased efficiency: Google's algorithms analyze a vast amount of data to optimize your bids in real-time, which can lead to more efficient use of your budget.
• Improved ROAS: By focusing on your desired return, Target ROAS can help you achieve a higher overall ROAS for your campaigns.
• Simplified campaign management: Once you set your target, Google Ads takes care of the rest, freeing up your time for other tasks.

Is Target ROAS Right for You?

While Target ROAS can be a powerful tool, it's not suitable for every campaign. Here's a general guideline:

• Sufficient conversion data: Target ROAS needs enough conversion data to learn and optimize effectively. Aim for at least 50 conversions in the past 30 days.
• Stable ROAS: Your historical ROAS should be relatively stable to give the system a reliable baseline.
• Clearly defined ROAS goals: You need to have a clear idea of your desired ROAS to set an appropriate target.

If your campaigns don't meet these criteria, you might be better off sticking with Maximize Conversions or Maximize Conversion Value.

How to set up Target ROAS bidding in Google Ads

Setting up Target ROAS is straightforward, with one HUGE potential pitfall.

1. Navigate to your campaign's settings.
2. Select "Target ROAS" as your bidding strategy. This can be a box you check as part of a Maximize Conversion Value bid strategy, or it can be a separate bid strategy, depending on the campaign type. It works the same either way
3. Set your target ROAS as a percent. If you want a target ROAS of 2, be sure to type "200%" and not "2," as that would be interpreted as a 2% ROAS target, aka a ROAS of 0.02. Yikes!

Target ROAS can be a valuable tool for scaling your Google Ads campaigns and achieving your desired return on ad spend. By understanding how it works and following best practices, you can reach new levels of success and drive better results for your business.