Target ROAS is one of the four Conversion Bid Strategy (CBS) modes, alongside with Semi Automatic, Fully Automatic and Target CPA. Target ROAS is a great tool for marketers that have a business goal of maximizing the purchase value from each conversion or mobile app install.
What is ROAS?
For starters, ROAS stands for return on ad spend and is a marketing metric that measures how much revenue you make, or expect to make, in comparison to your advertising spend. In other words, it answers the question, “If I spend x amount of money on advertising, how much will I make back in sales?”
What is Target ROAS mode?
This CBS mode is designed to serve content where your desired ROAS can be reached, based on the total conversion or order value you’d like to receive for each dollar you spend on Outbrain. To do this, we not only bring traffic to top-converting publisher sections that meet your desired ROAS, but we also dynamically change your campaign CPC to deliver a return value that meets your target ROAS over the duration of the campaign.
Your Target ROAS will be shown as a percentage. For instance, if your Target ROAS is 150%, you expect to make $150 back for every $100 you spend on advertising with Outbrain.
Who should use Target ROAS mode?
Target ROAS gives you more control over the value that a campaign contributes to your business. Marketers that are focused on driving online sales and ideally have the ability to pass back conversion data to Outbrain are a great fit for Target ROAS. App clients with a goal of in-app purchases would benefit from Target ROAS as well.
Who shouldn’t use Target ROAS?
You shouldn’t consider Target ROAS as an option if you are:
- A marketer that has a low conversion volume for your sales/purchase (less than 8 conversions a week).
- A marketer that wants to maintain full control over your CPC
- A marketer whose priority is their CPA goal (in that case, Target CPA is the mode for you).
How do I enable Target ROAS mode?
During campaign setup, after selecting your Campaign Objective and your Creative Format, you will come upon a Budget section with four options from a drop-down menu within the Conversion Bid Strategy: Fully Automatic, Semi Automatic, Target CPA, and Target ROAS. Please note, Conversion Bid Strategy will only appear as an option if you select a Campaign Objective of Conversions or App Installs.
Go ahead and choose Target ROAS. Once selected, you must specify one conversion event to enable the mode. For more information about the conversion setup process, please visit this Help Center article. If you do not plan on passing back conversion sales data, you must enter a conversion value on the Conversions tab (top of the left-hand sidebar).
However, if you do plan on dynamically passing back conversion sales data, please refer to the “How do I implement dynamic values?” Help Center article. We suggest using dynamic values if you have multiple conversion values that you want your pixel to receive, as this will ensure accuracy of your ROAS calculation.
Next, enter the ROAS goal that you wish to obtain. Remember that ROAS is a percentage, so if ROAS goal is 150%, that means you would expect to spend $100 and get a return of $150.
How do I control my campaign on Target ROAS mode?
In general there is no optimization needed for Target ROAS. The Outbrain algorithm will do all the heavy lifting. However, if you are consistently hitting your ROAS goal, you can either increase the target ROAS or increase the budget to continue to drive optimal performance. Alternatively, if you’re not reaching your ROAS goal, you can decrease the target ROAS or lower the budget.
Why is my campaign not reaching my ROAS goal?
Have you noticed that your campaign’s actual ROAS is not reaching your target ROAS? This might be due to a lack of data for Outbrain’s algorithm to utilize. If so, you’ll see a notification under the Objective & Optimization section of the campaign screen of either “Learning” or “Low Conversion Data.” Another explanation for your ROAS falling short of your goal may be that the minimum ROAS bid is too high, preventing us from meeting this threshold to spend the campaign’s full budget.
What does “Learning” mean?
If you see that your campaign is “learning,” no worries – it just means that your campaign recently launched and the system is still gathering data for optimization. Please note that the Learning phase for Target ROAS may last about a week after launch.
What does “Low Conversion Data” mean?
If the system tells you that your campaign has “low conversion data,” this means that your campaign has recently slowed to a low number of conversions
Please check the following campaign details to ensure that we can collect enough data to optimize towards your target ROAS:
- Is the pixel implemented correctly? For pixel implementation guidance, please check out this article.
- Are values being passed back correctly? For assistance with Dynamic Values, please reference this article.
- Is the pixel firing correctly on all platforms?
- Is the Target ROAS a realistic goal?
Important to Note:
- You cannot enable Target ROAS on a campaign without selecting a conversion that passes Outbrain its value. To reiterate, this can be passed back dynamically or entered in the Amplify dashboard.
- To meet your ROAS goal while maintaining the highest number of conversions for that ROAS, the system will automatically adjust the CPC for each serving based on multiple data points, in addition to adjusting the campaign’s base CPC.
- There are cases where the system further maximize the number of conversions within your desired ROAS. In this case, the system will raise the CPC (you’ll see it as “Optimized CPC”). When the Optimized CPC reaches the Maximum CPC threshold, the system will no longer be able to raise the CPC. If you want to win more conversions with your target ROAS, you will need to raise the Entered CPC (we recommend raising it to be the same as the Optimized CPC) so that the algorithm can continue optimizing and maximizing the number of conversions.
- Still not sure about how to best use Target ROAS Conversion Bid Strategy? Check out our suggested best practices here.