Term
Target ROAS (tROAS)
A Google Ads Smart Bidding strategy that adjusts bids so the return on ad spend lands on the target value the advertiser sets. Requires tracked conversion values.
Target ROAS — in more detail
Target ROAS (tROAS) is the value-based variant of tCPA: instead of a per-conversion price, the advertiser sets a percentage return on ad spend (e.g. “400%” = €4 revenue back per €1 of spend). Google adjusts real-time bids so the average value/spend ratio across the campaign meets that target. Prerequisite: conversions must carry values (order value, lead value, margin) — without values, tROAS is not technically possible. Rule of thumb on learning: at least 50 value-bearing conversions in 30 days.
Example / In practice
An e-commerce shop tracks order value as conversion value. Current campaign: 320% ROAS. The advertiser sets tROAS = 400%, since minimum profitability sits at 380% (with buffer). Google lowers bids on low-value queries and pushes more volume into high-revenue ones — typical outcome: click volume drops by 15%, revenue/spend climbs from 320% to 395%.
Distinction from similar terms
tCPA targets a constant CPA; tROAS a constant value/spend ratio. Maximize Conversion Value without a tROAS spends the budget for maximum value with no ROAS cap. POAS is profit-based (margin net of costs) and needs additional data enrichment.
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Smart Bidding
Umbrella term for the conversion- and value-based automated bid strategies in Google Ads: tCPA, tROAS, Maximize Conversions, Maximize Conversion Value. Driven by ML and real-time auction signals.
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