A marketing strategist is interested in target ROAS bidding. How might their agency describe this bidding strategy?
This bidding strategy determines that if a user's search is likely to generate a conversion with low value, target ROAS will bid high on that search.
This bidding strategy determines that if a user's search is likely to generate a conversion with high value, target ROAS will bid low on that search.
This bidding strategy uses historical and uploaded data to set the value of a conversion every time a user searches for products or services that are being advertised. Then it automatically adjusts bids for these ads to maximize return.
This bidding strategy analyzes and intelligently predicts the value of a potential conversion every time a user searches for products or services that are being advertised. Then it automatically adjusts bids for these searches to maximize return.
Explanation
Analysis of Correct Answer(s)
The correct answer accurately describes Target ROAS (Return on Ad Spend), which is a Google Ads Smart Bidding strategy.
- It correctly states that the strategy uses machine learning to "analyze and intelligently predict the value of a potential conversion" in real-time for every search auction.
- This prediction is based on numerous signals, such as the user's device, location, time of day, and browsing history.
- The core function is to "automatically adjust bids... to maximize return." The system will bid higher for clicks it predicts will lead to high-value conversions and lower for clicks likely to result in low-value conversions, all while aiming to achieve your average ROAS goal.
Analysis of Incorrect Options
- The first option is subtly incorrect. While Target ROAS uses historical data, it doesn't "set the value of a conversion." The advertiser sets conversion values. The algorithm predicts the potential value of a specific auction.
- The second option states that the strategy will "bid high" on a search likely to generate a "low value" conversion. This is the opposite of how Target ROAS works; it would bid low to preserve the budget for more valuable opportunities.
- The third option claims the strategy will "bid low" on a search likely to generate a "high value" conversion. This is also incorrect. The algorithm would bid more aggressively (higher) for these high-potential auctions to maximize total conversion value.