Google Premier Partner
Meta Business PartnerWhat is target ROAS?
Target ROAS is a Smart Bidding setting in which you state how much conversion value you want per euro of ad costs. Google Ads bids toward it in each auction. In Google Ads, ROAS is often shown as a percentage: 500 percent is the same as 5. It is a target, not a guarantee.
Why is target ROAS important?
- Steering on value: useful when orders differ a lot in value, such as €20 and €200.
- Automated bidding: the system bids higher in auctions with more expected value.
- Needs correct values: the conversion value must be right, preferably with margin or actual order value.
Examples of target ROAS
- A sporting goods store sets a target ROAS of 400 percent: €4 revenue per €1 in ad costs.
- €2,000 in ad costs and €10,000 in revenue gives a ROAS of 5, or 500 percent.
- A target far above the current ROAS can limit impressions and orders.
How do you use target ROAS?
Make sure every conversion carries a correct value. Start with a target close to your current ROAS, let the learning phase finish and only then adjust in steps. Keep your margin in mind: a ROAS of 5 can still mean a loss on a low margin. Read more in Google Ads campaigns.