On Thursday, Google announced a new flexible bid strategy in AdWords to target return on ad spend (ROAS). Google is launching this, along with previous flexible bid strategies, as part of its initiative to provide more flexibility and control to advertisers over their performance targets. Advertisers will see the target ROAS bid strategy rolling out to their accounts over the next few weeks.
This new bid strategy will be useful for advertisers since it allows them to target ROAS on the campaign, ad group and keyword-level bids. This type of automation is great for advertisers who track revenue and have different products with different conversion values. An advertiser’s target ROAS is the revenue that they want to earn for each dollar. So let’s say your goal is to earn $5 for each $1 you spend. In this example your target ROAS would be 500%.
With ROAS targeting, AdWords will predict the likelihood that a click will lead to a high-value sale. The system will use your target ROAS to set a unique bid for each click. Some real-time details that flexible bidding takes into account include device, browser, location and time of day. These details are used to optimize bids to make them more efficient.
Once target ROAS rolls out to your account, here are the actions you need to take to get it running:
1) Set up conversion values in conversion tracking for AdWords to understand the value of orders placed on your site.
2) Pick the ROAS percentage that matches your business goals.
3) Go to the shared library and create a new target ROAS bid strategy.
4) Enter your target ROAS into the flexible bid strategy you just created.
5) Pick the campaigns, ad groups, and keywords you would like to apply the strategy to.
Image Source: Return of the Ad Spend