Question: Franklin is creating a Google Search campaign using a conversion-based Smart bidding strategy. He's decided to use Target ROAS, which will meet his value-based objectives. What best practice can he use to set an initial ROAS target?
- He could provide a Target ROAS that's exactly 10x the highest keyword cost in the campaign.
- He could check on the campaign's historical conversion value per cost metric in Google Ads and rely on that as a guide.
- He could provide the system with the conversion cost that he's hoping to pay in his campaign.
- He could use an average of what he gauges all his competitors are paying for conversions.
Explanation
For an initial Target ROAS, Google Ads recommends using historical conversion value per cost as the starting point. Google Ads specifically says to set the target based on the historical conversion value per cost data for the ad groups or campaigns where the strategy will be applied, and to review the last four weeks as a general rule. It also advises that the target should be at or below historical ROAS, because a target set too high can restrict traffic volume. That makes past Conv. value / cost the best baseline for an initial value-based bidding target. Google Help+1
Why the other options are incorrect
A) Google Ads does not recommend calculating an initial Target ROAS from the highest keyword cost or any fixed keyword-cost multiple. Google Help+1
C) This refers to a desired cost-per-action, which aligns with Target CPA, not Target ROAS. Google Help+1
D) Google Ads guidance does not use competitor conversion costs as the basis for setting an initial Target ROAS. Google Help+1
Source for verification
https://support.google.com/google-ads/answer/6268637?hl=en
https://support.google.com/google-ads/answer/6309035?hl=en
The answer(s) to the question is highlighted in the BOLD text above. You can also find more questions and answers related to the exams on the "Google Ads Search Professional Certification" page.