Why Does My Spend Dip When I Use Target ROAS?

Watch this video to learn why target ROAS lowers your spend and controls your campaign activity and how you can optimize it.

Have you been using target ROAS and seen a dramatic drop in spend? 
When you start to use target ROAS and increase your goal, Google will give you exactly what you need. But there's a catch: your cost and volume may drop! 

In this video, John explains how the algorithm behind target ROAS works, how to optimize it to grow your business, and gives you some practical takeaways so you can start to use it right away.

Track and calculate your ROAS for FREE! 

0:00 Intro
0:48 Diving right in: Target ROAS
5:58 What happens when you add ad spend
9:23 Useful tips to manage your ad spend

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[yassinelam]

Watched this video multiple times, I've been looking for this information for years, no body ever explained it like this, this makes a lot of sense. Thank you so much.

[this_is_fabri]

Hi John, thanks for the video.
One question: when you mention the scaling up phase, you mean turning off the target Roas so Google can build up new data and then we can check the Roas if the products and set the target Roas again?
And can you explain to me again the point on Minute 8:15? Sorry I'm Italian and i have a bit of difficulty following that part of sum up the values.
Thanks

[homany]

Thanks John, your content is always the best. So I have few questions and hope you can help. Thanks a lot!
1. Since I continuously add new products to my store every week, do you suggest to add those products to the existing smart shopping (using target ROAS) or create another smart shopping to test new product with no target ROAS?
2. You guys previously suggest not to touch the new smart shopping for 45days, so if I continuously add or remove the product every week, will it hurt both campaigns?
3. If later we move the products from the testing campaign (no tROAS) to original campaign (tROAS) see the result, can it bring all the sales data back to the original campaign provided that we have GTIN for each products?

[Decoy-]

This was actually very needed, Thank you so much for always sharing valuable information!

[studio]

I like how Kasim pops up and does the outro at the end. Keep rocking Solutions8!

[scotthughes]

Will the spend slowly increase over time if you target an aggressively high roas too soon? Will it eventually target a wider audeince over time?

Let's say I had a Perf Max Shopping camapign on MAx Conv for about a month, it gets about 200% ROAS during that time. I then switch to target roas but bump it to 500% ROAS.

It starts to spend less but will it stay like that forever? Or will it gain more audience over time?

[bigmoney]

Hey, I use contact email clicks, call clicks, whatsapp clicks as conversions in my Adwords. These are conversions along with the ecommerce conversions. For an ecommerce brand. Do you think I should just put ecommerce as conversions? No doubt call and other lead to purchases. I think its a shame most people focus on analytics ecommerce direct conversions because so much happens in between the sales funnel. RIght?

[puneetholidaylinks]

Hi John, You explained very well .... My question is when we set biding TROAS, , meaning starting of the campaign or should wait one or two week then go for this bid

[Matthew-zyyb]

Hi, I'm trying to set up my search campaign using Target ROAS. While doing it, I realized that the suggested tROAS is 17000%. I thought it was a bug, but when checking the conversions and their values ​​I noticed that my website was sending the values ​​to google without putting the commas in the right places. For example, a conversion worth €29.00 was marked in Google Ads as €2, 900.00, so multiplied by 100.
So, taking into account that my daily budget is €30, with those conv. Values ​​the tROAS is obviously skyrocketing.
My question is, could I leverage this error and use it to my advantage?

[katharinah.]

Very well explained, very valuable information. I also watched the video several times. Thanks. I immediately subscribed to your channel.

[ramanjitkaur]

is it possible to calculate ROAS after 3 months based on the current ROAS?

[just-be-]

Can you tell me when i should start with smart shopping ads? I have a general shopping campaign with 450+ products and it took 1 week to see impressions and clicks. In the last days i got the first clicks and its starts getting better.

[softandy]

So for a novice where would you begin your ROAS climb. 200% or higher? My business has products from $20 to $5000?

[TrollGator]

Hey John! Thanks for the great content and detailed explanation. I have a question, i have been running a testing smart campaign for about 2 weeks at $100 budget without making any changes. My roas is about 276% without any tros set. Google now suggests to set a troas of 284% with increased budget of $150 budget or keep same budget. My question is if i am already getting a 280% roas then what is the point of setting a similar troas? Or is it because Google is suggesting me that because i ll have a higher spend of $150 with a similar roas? My goal is to incrementally increase my roas from 276% to whatever i can achieve without increasing the budget a whole lot. Do you have any tips on that? Thank you!

[perfumepalaceindia]

Shall I increase my target roas when my actual roas is way more that current target roas in past 28 days??

[danielapardo]

Hi John, if I set a target ROAS, would my campaign get back to the learning phase?

[TabiZzFR]

How are you guys doing to keep a decent ROAS (250%+) while spending more money and increasing my volume then?

[felipecaceres]

Love your team and working with you guys has been great so far. Really love all of this content too.

[manuelregidor]

Awesome video John.

Does the same principle apply for tCPA?

I work with a big marketplace in a Pmax feed only (thousands of products).

We limit bids via tCPA, because we are continually adding new products and assets groups and we don't want to overspend. Should we remove tCPA when we add new products and then limit again after some days?