Maximize Conversion Value vs Target ROAS: How Google Ads Bid Strategies Work

By: Jyll Saskin Gales, Google Ads Coach

Let's talk about Target ROAS (Return on Ad Spend) in Google Ads. It's a powerful bid strategy, but I've noticed some people making a common mistake that can really limit their results. They think setting a super low Target ROAS is the same as using the "Maximize conversion value" bidding strategy.

Trust me, it's not!

Target ROAS vs. Maximize Conversion Value: What's the Difference?

Imagine you're running a campaign and decide to set a 1% Target ROAS. You're essentially telling Google Ads, "Hey, for every $100 I spend, I'm happy with just $1 back." Sounds a bit crazy, right? But that's exactly how Target ROAS works - you tell Google the ROI you're looking for.

Now, compare that to the "Maximize conversion value" strategy. With this approach, you're saying, "Google, go get me as much revenue as possible with this budget!" It's all about driving conversions and increasing your overall sales, regardless of return.

Target ROAS vs Maximize Conversion Value: An Example

Say you're selling widgets for $200 each, and your daily ad budget is $100. If you set a 1% Target ROAS, you're basically saying you're okay with spending $10,000 to sell just one widget. Doesn't make much business sense, does it?

But with "Maximize conversion value," Google Ads will work its magic to get you as many widget sales as possible within your budget. It might even encourage customers to buy more expensive widgets or multiple units at a time. That's what we want, right? More sales, more revenue!

Target ROAS can be a great bid strategy, as long as you set a realistic ROAS target.

Which bid strategy should you choose?

If your goal is to grow your revenue, "Maximize conversion value" is usually the best place to start. It gives Google Ads the freedom to bring in those sales.

If your goal is to hit a certain efficiency, or to prepare your campaigns to scale, Target ROAS is perfect for you. Make sure you set realistic targets, though - not too low, and definitely not too high. Think about your profit margins and what kind of return you actually need to achieve your business goals.