Target ROAS best practices
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Target return on ad spend, or “Target ROAS,” is a type of flexible bidding strategy that automates bidding across multiple campaigns, ad groups, and keywords to help achieve an average return on ad spend (ROAS) equal to the target you set.
Before you use the Target ROAS bidding strategy, you need to meet the following requirements:
- You've set values for conversions you're tracking.
- A conversion history of 15+ conversions in the last 30 days, plus at least 30 days of consistently reported conversions.
- The keyword, ad group, or campaign has received conversion values at a similar rate for at least a few days.
ROAS best practices
Once you’ve met all the requirements, use the following best practices to make the most out of your bidding campaigns.
Best practice 1: Increase conversions to meet target ROAS quickly
Ideal for: Hotel groups with high conversion traffic
Convergence time is the amount of time it takes for the auto bidder (the algorithm used to generate bids) to identify the best bid amount to use in order to meet a given hotel group’s target bid price.
The auto bidder starts by selecting an initial bid using a prediction model, which is unlikely to hit the target ROAS value. As more clicks and conversions are observed, the auto bidder will use this data to increase or decrease the bid amount to get closer to the target ROAS. Once the observed ROAS matches the target ROAS, the auto bidder has converged on a bid.
To shorten convergence times and meet your target ROAS quickly, aim to have 20 or more conversions per day in the selected group.
Best practice 2: Group properties by performance to meet target ROAS amounts
Ideal for: Hotel groups with low conversion traffic
The optimal way to meet target ROAS bids is to separate your hotels according to performance. Doing this allows you to monitor groups that have comparable attributes and will likely respond similarly to changes in bid amounts. You can also separate your hotels by ROAS, by margin (high, medium, low), star ratings or brand.
If you don’t have a lot of conversion data on your properties, group hotels with different ROAS amounts into a single group with a general ROAS to increase traffic to these properties. Over time, hotels with very different ROAS amounts can be moved to more homogenic groups.
Read more about Target ROAS bidding.