Flexible Bid Strategy: Target Return on Ad Spend

Google AdWords announced Target Return on Ad Spend (ROAS), a new bid strategy, as a part of broader initiative to provide greater flexibility and control over performance targets and better overall return from your Ad spend.

Target ROAS helps you maximize revenue by automatically adjusting your keyword, ad group, and campaign-level bids to meet a custom target return on ad spend. Your target ROAS represents how much revenue you want to earn for each dollar you spend on AdWords. For example, if your goal is to earn $7 for each $1 you spend on AdWords, your target ROAS would be 700%.

Harnessing the same real-time bidding technology behind Target CPA and Enhanced CPC, target ROAS takes into account signals such as location, browser, time of day, operating system and more to adjust your bids based on your ad’s predicted performance.

Grow sales and hit your ROAS goals with ease

Here’s an example to demonstrate the power of target ROAS –

Let’s say you’re an advertiser whose conversion values vary from product to product. Ideally, you would love to bid higher on keywords that lead to larger orders, and lower for keywords that lead to smaller ones, however, this would be time consuming and complex to do manually.

You can use Target ROAS to help you dynamically select the right bid for each auction. Here’s what you can do:

1. Set up conversion values in Conversion Tracking so that AdWords understands the value of orders placed on your site.
2. Choose the ROAS percentage that matches your business goals.
3. Create a new “Target ROAS” bid strategy in the Shared Library. (see image below)
4. Enter your target ROAS into your newly created flexible bid strategy.

Apply the new bid strategy to keywords, ad groups or campaigns.

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