Should you start with Maximize Conversions if your goal is Target ROAS?

By: Jyll Saskin Gales, Google Ads Coach

Are you launching a new Google Ads campaign and wondering which bidding strategy to use? Should you opt for Maximize Conversions, even if you have plenty of historical conversion data in your account? Let's explore the best choice.

The Power of Smart Bidding

Google Ads' Smart Bidding strategies are Maximize Conversions, Maximize Conversion Value, Target CPA and Target ROAS. Unlike other bid strategies, they leverage artificial intelligence to optimize your bids for better results. While some advertisers hesitate to use Smart Bidding, especially for new campaigns, there are compelling reasons to consider it.

Smart Bidding is better than Manual Bidding or plain old Automated Bidding

Regardless of whether or not you have historical conversion data in your account, starting a new campaign with Smart Bidding is worth it. Here's why:

• Auction-Time Bidding: Smart Bidding considers a vast array of signals present at the time of each auction, including device, location, time of day, audience segments, and more. This real-time data can be invaluable for optimizing your bids, even more so if you have historical data to draw upon.
• Focus on what matters: All of the Smart Bidding strategies are focused on driving what matters to your business: sales.
• Adaptability: Smart Bidding algorithms are constantly learning and adapting to changes in the auction landscape. This means your campaigns can stay ahead of the curve and continue to deliver results, even as your competition and audience behavior evolve.

Transitioning to Target ROAS

If your ultimate goal is to use Target ROAS (return on ad spend), you should probably start with Maximize Conversions or Maximize Conversion Value. Once your campaign has accumulated enough conversion data (at least 50 conversions in 30 days), you can seamlessly transition to Target ROAS by setting your target to your actual ROAS. From there, you can gradually adjust your Target ROAS in 20% increments to optimize up for efficiency or down for reach.

Budget Considerations for Target ROAS

When using Target ROAS, ensure you have a sufficient budget to support your goals. Your budget should be at least two times your cost per acquisition (CPA), and ideally three to five times your CPA, to allow the algorithm enough room to optimize your bids effectively.

If you don't have sufficient budget, you can try Target ROAS, but you may or may not see good results. If not, stick with either Maximize Conversion Value or Target CPA, which require less conversion data to optimize.

The Case for Smart Bidding

Whether you're a new or established business, Smart Bidding can be a powerful tool in your Google Ads arsenal. While it's not perfect, Google's AI is far more advanced than most advertisers when it comes to setting bids and optimizing campaigns. By leveraging Smart Bidding, you can tap into the power of machine learning to drive better results and achieve your advertising goals.