Google Ads Smart Bidding Introduces Target ROAS Tolerance Feature
· 54m ago · Originally reported by PPC Land
Google Ads' Smart Bidding now includes a 'Target ROAS tolerance' setting, allowing campaigns to fall short of the set return-on-ad-spend target by a certain percentage. This feature is designed to help the algorithm test new queries and optimize performance. The approach has sparked some debate among advertisers.
Why it matters
Understanding how much leeway automated bidding strategies have is crucial for advertisers aiming to control costs and maximize returns. This change could impact campaign outcomes and budget planning.
Explain it like I’m new here
It's like telling a robot shopper it's okay to spend a little more or less than planned so it can try new stores and find better deals.
Terms in this story
ROAS (return on ad spend)
ROAS (return on ad spend) is the revenue generated by advertising divided by the money spent on that advertising, usually shown as a ratio like 4:1 or 400%.
Campaign
A campaign is an organised set of ads with a shared goal, budget, audience and time period, run across one or more channels and measured against defined KPIs.
Advertiser
An advertiser is the company, organisation or person that pays to place ads in order to sell products, build a brand, recruit, or spread a message.
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