Digital Lexicon Hub

A Google Ads Smart Bidding strategy that sets bids to reach a chosen average conversion value per unit of ad spend.

Target ROAS ties bidding to revenue or profit rather than conversion counts, which suits businesses whose orders or leads vary widely in value and that need ad spend to stay within a return threshold.

An online store earns $25,000 in conversion value from $5,000 in spend, a 500% ROAS. After 4 weeks of stable value reporting it sets a 450% target, then raises it in 10-point steps every 2 conversion cycles while watching volume.

It is only as good as the conversion values supplied; revenue-only values ignore margins and returns. Targets set too high limit traffic, and accounts with few valued conversions or long conversion delays give the model little to learn from.

Target ROAS equals conversion value divided by ad spend, multiplied by 100. At auction time, Smart Bidding predicts the value of each potential conversion using signals such as device, location, time and audience lists, then raises or lowers bids to meet the target on average. Most bid adjustments are ignored. Google relabeled Maximize conversion value with a target ROAS as Target ROAS in June 2026; the target links bidding to Return on Ad Spend (ROAS) and is used in Performance Max (PMax).