how to set up and optimize target ROAS the right way

Learn what conversion value is, how Google’s Target ROAS bidding actually works, and the practical tactics that help you get the most out of it.

Target ROAS is the most advanced option in Google’s smart bidding lineup. If you’ve already worked with Maximize Conversions, Target CPA, or Maximize Conversion Value, this is the next step up.

What “conversion value” means in Google Ads

Before talking ROAS or bidding strategies, you need to understand conversion value.

For ecommerce, conversion value = revenue.
For lead gen, conversion value is whatever number you assign to a lead type based on its business impact. It’s not revenue, but a weighted value that reflects how important that lead is to you.

What ROAS means

ROAS stands for Return On Ad Spend. The formula is simple:
conversion value ÷ cost

Google displays this as “Conv. value / Cost.”
If that number is 2.46, it means every dollar spent brought back $2.46 in value.

How Target ROAS works

With Target ROAS, you tell Google how much return you expect from your spend.

If you want a ROAS of 3, you enter 300% as your target. Google’s system then adjusts bids and allocates your budget to try to average that return.

The algorithm evaluates countless signals user behavior, context, likelihood to convert, and predicted value to hit your target. Note the format difference: reports show ROAS as a number like 3.0, while the Target ROAS field uses percentages like 300%. Entering 3% would tank your results.

Target ROAS isn’t beginner-friendly. It’s built for advertisers who already have stable historical data, track conversion values consistently and want to scale while keeping a specific return threshold.

Eight expert tips for using Target ROAS correctly

1. You need real conversion volume. Aim for at least 50 conversions in the last 30 days. You can run with less, but the system will learn slower and perform inconsistently.

2. Track values or don’t use this strategy. If your conversions don’t have values, Target ROAS has nothing to optimize against. Use Target CPA or Maximize Conversions instead.

3. Start with a realistic target. Don’t jump to the ROAS you wish you had. Start with the ROAS your campaigns have already achieved in the last month. You can tighten it once the system stabilizes.

4. Avoid budget bottlenecks. Campaigns that constantly hit budget caps won’t perform well with Target ROAS. If you can’t increase the budget, slowly raise the ROAS target to limit impression volume instead.

5. Balance growth vs. efficiency. A high ROAS is not always a win. It often means you’re barely spending and only capturing low-hanging fruit. If you want new customers, expect a lower ROAS. Also factor in lifetime value short-term efficiency can be misleading.

6. Forget manual bid adjustments. Device, location, and audience bid modifiers don’t apply. Smart Bidding overrides them.

7. Don’t cap bids. Bid limits restrict the algorithm and usually hurt results. Avoid them unless you have a very specific reason.

8. Use campaign- or portfolio-level targets. Setting ROAS targets at the ad group level is messy. Stick to campaign-level or portfolio strategies for cleaner optimization.