roas bid strategy[ Edited ]
December 2014 - last edited December 2014
hi the community..
Please, as i have no experience at all on the roas bid strategy , look for some marketers comments on that bidding method...
Is it worth trying ? if yes, how long for ?
For what kind of product this method is more suitable (foods, hifi ..) ?
Is there a sort of erosion like Cpa profitability when it comes for sometimes ?
Any thoughts greatly appreciated !
Re: roas bid strategy
ROAS bid strategy is an advanced type of flexible bid strategy inside AdWords, which requires more amount of historical data inside your campaign so that AdWords can target this effectively. There are certain requirements which have to be fulfilled before you target this flexible bidding strategy like ad groups/ campaigns attaining 15 conversions in the last 30 days, you have assigned some conversion value while implementing the code in your website etc...
I must say that it's worth trying if you have substantial amount of data inside AdWords in terms conversions.
This strategy might be a good pick for product based AdWords account, if we talk about how much value the account is gaining from each product used inside the account. That's what I feel. But it doesn't mean that we cannot try it for other type of businesses. Of course we can.
I would suggest you to read this reference for more insights on how you can implement this strategy: https://support.google.com/adwords/answer/2979071?hl=en
Re: roas bid strategy
Hi garguier, great question, I hope I can help.
The ROAS strategy can be very effective, but it has to be used carefully and works best in the following situations:
#1 - Your target Campaign/Group has a clearly defined profit margin
#2 - The Campaign/Group receives a good number of conversions and at a good frequency.
#3 - Your target ROAS is realistic
To expand upon these three elements:
#1 - There's little point in trying to use a single ROAS strategy if the element which it is applied contains products/services with a wide range of net profits or where it is possible for visitors to order multiple items. For example, if a single item purchase has a net value of $50, and typically costs $5 in advertising to achieve a sale, that's an ROAS of 10.0. However, if the visitor bought two of the item, the ROAS would be 20.0, so you'll need to consider whether your target element has a stable and consistent value per transaction.
#2 - All such flexible strategies require data to work well. Trying to optimise a Campaign that has 2 conversions a month is going to be impossible so you'll need at least 2 conversions a day and better still 20 a day, per Ad Group to get really good results.
#3 - Don't aim too high. It may seem logical to aim for the highest ROAS possible but if it's unrealistic you can actually harm your Campaign as CPCs drop too low for your Ads to appear in decent positions. Bear in mind that a lower ROAS at greater cost can return more net profit, so you need to balance your spend, CPCs and ROAS carefully and not just aim at the highest number. For example:
Spend $1000, ROAS 12.0, revenue = $12,000, net income $11,000.
Spend $3000, ROAS 6.0, revenue = $18,000, net income $15,000.
Personally I've found few Accounts where ROAS as a bidding strategy works well, mainly because of the variation in product values and profitability. ROAS would be an ideal strategy for a single product, usually only purchased in a set quantity, which receives 10 sales or more per day. This could, of course, apply to a range of products across multiple Ad Groups and Campaigns, where each has their own strategy.
Re: roas bid strategy
Isadora R 2h
I have been using ROAS bidding strategy with excellent results. I am talking about campaigns with lots of conversion. Around 80 conversions in last 30 days.
I tested many different TARGET ROAS like 100%, 150%, 200%, etc.
Of course, every time I set a higher TARGET ROAS, the quantity of traffic is less but the ROI is higher.
The question is, how much TARGET ROAS do I should set to get BEST earnings?
As an extreme example, 10% of TARGET ROAS of a BIG amount of campaign invest could be HIGER than 500% of a small campaign investment.
Actually, I have set a ROAS of 200%, but I really want to get the most earning of the campaigns investment. How can I know how much to set the TARGET ROAS in order te get most earnings as I can? Is there any way that Adwords knows the BEST value TARGET ROAS? Is there any balance tool?