Target ROAS

Welcome to our introductory article to Target ROAS, NewsBreak’s newest bidding strategy. In this article, we will cover the basics, how to set these types of campaigns up, as well as Best Practices.

What is Target ROAS?

Target ROAS (Return on Ad Spend) is a smart bidding strategy that helps advertisers automatically adjust their bids to hit a specific revenue goal for every dollar spent on ads. In simple terms, if you want to spend $100 and generate $150 in revenue, you set your ROAS goal at 150%.

For example:

• 200% ROAS: You aim to make $2 for every $1 you spend.
• 300% ROAS: You aim to make $3 for every $1 you spend.
• 400% ROAS: You aim to make $4 for every $1 you spend.
• 500% ROAS: You aim to make $5 for every $1 you spend.

The higher your ROAS percentage, the more revenue you’re aiming to generate per dollar spent, making your campaign more aggressive.

Who Should Use Target ROAS?

This strategy is best for advertisers, especially in e-commerce, who want to control ad costs and maximize revenue. It ensures you're spending wisely and getting the most return on your investment. At this time, this bidding strategy is not supported for app events.

Top Benefits

• Cost control
• Maximize revenue
• Bid optimization

How to Create a Target ROAS Campaign

Before creating a Target ROAS campaign, your Events need to meet certain requirements:

In Tools > Event Tracking: A Target ROAS ad set must be tracking a complete_payment (or sale event if you use ClickBank) with Event value enabled. So please create complete_payment or sale event and enable the "Event value" toggle in Event Tracking, then use it in your Target ROAS ad sets. 

You will need to collect at least 20 complete_payment / sale with event_value at account level within the past 14 days to enable Target ROAS in your Ad Set, or you might see it disabled as shown below.

How to set up a Target ROAS campaign:

1. Campaign Objective: Set to "Website Conversions."
2. Optimization Goal: Choose "Conversion Value."
3. Bid Type: Select “Target ROAS.” 
4. ROAS goal: Set your ROAS goal in percentage

Conversion vs. Conversion Value

• Conversion: When someone completes a desired action, like purchasing a product.
• Conversion Value: The monetary amount tied to that action. If a customer buys a product for $100, the conversion value is $100.

✍️You cannot switch from Target ROAS to Max Conversions or Target CPA campaigns.

Best Practices for Target ROAS

1. Before You Start:
   • Double-check your Pixel/Postback is tracking the event value: complete_payment or sale.
     1. Please note that the “sale” event is only used for ClickBank, if you are not integrated with ClickBank, you need to use complete_payment.
2. Suggested Starting Point:
   • Start by using your average weekly ROAS goal to test, with 2-3 ad sets. Once these ad sets have passed through the Cold Start period, turn off the lower-performing ad sets and keep the top one live.
3. Budget Recommendations:
   • Set your daily budget to the CPA of your first 20 conversions.
4. Landing Page URL
   • This bidding strategy performs best for advertisers that drive users to a landing page that features multiple price points and products, such as listicles.
5. Review and Adjust:
   • Monitor your ROAS performance weekly and make adjustments to your bids and budgets accordingly. For example, if your campaign is not spending, reduce your Target ROAS, and vice versa.

Best Practices for Target ROAS by Advertiser Type

• Lead Generation Advertisers:
  • Goal: Optimize for higher-value leads if lead values differ.
  • Implementation: Use event tracking to capture and pass back lead value variations, helping Target ROAS optimize based on these values rather than a flat CPA.
• Listicle and Content-Based Advertisers:
  • Goal: Optimize for overall revenue per product rather than an average CPA.
  • Implementation: Pass back transaction amounts for each product in a listicle, enabling Target ROAS to optimize for total revenue by accounting for diverse product prices rather than a single average value.
• E-Commerce and Multi-Item Purchases:
  • Goal: Optimize for advertisers who handle multiple purchases, especially on platforms with upsells, such as ClickBank.
  • Implementation: By passing through each transaction amount, Target ROAS can handle complex purchase journeys, maximizing revenue potential from both initial and upsell purchases.

💡Pro Tip for New Campaigns

If you’ve just set up an event to test Target ROAS, it's recommended to also run a Target CPA or Max Conversion campaign in parallel. This helps your campaign optimize better, especially if you don’t have much historical data.