While not widely discussed, there is a ‘hidden’ ROAS target that Performance Max campaigns attempt to achieve on a rolling 30-day basis if a ROAS target is not entered in campaign settings. Until recently, Google used a 100% ROAS target if no ROAS was provided. Signs are pointing toward an imminent removal of the “hidden” ROAS target for campaigns on Max Conversion Value.

Most affected will be PMax campaigns with a ROAS hitting around 100% return and relatively low spend. With the removal of the hidden target, these campaigns may see spend increase, and ROAS may drop. 

How to check if your campaigns are affected:

There are two primary ways to see if your campaigns are affected by this hidden target: through the Campaign Settings and in the Bid Strategies Report.

First Method: Through Campaign Settings:

1.) In Campaign Settings, if you do not see a Target ROAS % in the screenshot below (the box is unchecked), then:

2.) Check the box and add your Target ROAS:

3.) If no % pre-populates, there is a trick to get a recommended ROAS target:

4.) Click “Change bid strategy,” and you’ll see this box:

5.) Now, select the checkbox, and Google’s recommended PMax ROAS value will populate:

6.) Edit that number or keep it as-is and click Save.

Second Method: Through the Bid Strategies Report:

1.) Navigate to Tools and Settings > Shared Library > Bid Strategies > Account Strategies

2.) Scroll down to ‘Target ROAS campaign’

3.) Your data should look similar to this example:

How do I know what ROAS target to use in Performance Max campaigns?

Every industry, in fact, every competitor of yours, has unique ROAS targets for Performance Max campaigns that depend on their business objectives. While there is no overarching recommended ROAS target, a good starting point is to set a target ROAS of at least 200%. This means you want to generate $2 in revenue for every $1 you spend on paid ads.

To optimize and improve your ROAS with Performance Max campaigns, review your assets, swap out low-performing creative, fine-tune audience targeting, and upload Customer Match data. 

While ROAS is one of the most important metrics guiding the success of your Performance Max campaigns, also consider other metrics such as conversion rate, cost per conversion, and return on investment (ROI). Achieving a successful ROAS target is only possible if you track and measure the right conversions on your site and assign the proper values to those conversions. For an overview of ROAS and how to set and measure this important KPI, check out our guide: The Power of Return on Ad Spend (ROAS)

Feed optimizations, seasonal adjustments, and fine-tuning your ROAS target and other metrics over time will contribute to your success with Performance Max. Sounds confusing or too much work? We can help you with this if you like. Contact our team to learn more. 

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