Value-based bidding is a subset of Google Smart Bidding that allows customers to optimize campaigns based on the value brought to their business, maximizing conversion value within a given budget and Target ROAS, which is optional. It differs from conversion-based bidding (Maximize Conversions with an optional Target CPA), which aims to maximize conversion volume.
Value-based bidding includes Maximize conversion value with or without a Target ROAS
- Use Maximize conversion value without a target ROAS if you want to generate as much value as possible within your daily budget. This is best for campaigns that consistently spend the daily budget.
- Use Maximize conversion value with a target ROAS if you want to Maximize conversion value within set efficiency constraints. This is best with uncapped budgets.
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On this page
- What you need to use value-based bidding implementing
- Best Practices for value based bidding
- Activating value-based bidding
- Managing value-based bidding performance
What you need to use value-based bidding
Consider the following criteria to determine whether value based bidding would work well for you
- Objective: Ensure that a value-based bidding strategy aligns with your marketing objectives. Do you want to differentiate campaign performance for customers, products, or services based on the values they bring to your business? If you care more about driving conversion volume, consider Maximize conversions bidding with an optional target CPA instead.
- Unique values: Ensure that you are reporting two or more unique values for your conversion goals
- Set expectations: Value-based bidding will maximize the conversion value within the constraints of a given campaign (budget and ROAS target where applicable). This means that based on those factors, higher value customers will be prioritized. Keep this in mind when comparing tCPA performance, which optimizes for conversion volume irrespective of value. When using value-based bidding, evaluate performance based on the conversion value your campaign is generating relative to the conversion values you measure and report.
Best Practices for value-based bidding
This section covers best practices specifically as it relates to conversion goals for value based bidding. It’s recommended that you choose a single stage in your lead-to-sale journey to use for bid optimization.
- Conversion delay: When selecting your conversion goal, consider both accuracy and delay. For example, your final purchase might have the most accurate values. If the delay is too long for you to manage, consider selecting a goal earlier in the consumer journey, like a qualified lead.
- Volume: Your conversion goal should have at least 15 conversions in the last 30 days at the account level. Less conversion volume can make for noisier data when assessing performance.
- Value Reporting:
- You must report two or more different values to your conversion goals. These can be real economic values, like revenue or proxy values, like a lead score. You can measure multiple values for a single conversion goal (dynamic values) or the same conversion value for two or more unique conversion goals (static values).
- Feed conversion data to Google as soon as it’s available. Sending conversions regularly gives the bidder constant information from which to learn and optimize as opposed to large, one-off batches.
- Shorter conversion delays (less than 7 days) are recommended. The conversion delay refers to the time between the user’s click and the time the conversion is reported to Google. Learn how to Find out how long it takes for your customers to convert.
- Note that for offline conversions, daily offline uploads are optimal. Be careful about backfilling your value data with offline uploads if they are delayed since Smart Bidding performance will be impacted by any delays in uploading conversions. Read the Offline conversion imports FAQs for more details.
- Depending on the measurement configuration, consider the below scenarios:
- If you have a percentage of conversion data available prior to 7 days post-click, it’s acceptable if your average conversion delay is longer than 7 days. Regular inflow of data facilitates efficient ramp up.
- If no conversion data is uploaded for 7 days post-click, or if it takes 7+ days for 100% of conversions to be uploaded to Ads, the initial ramp up period for value-based bidding may take several months.
- You must report two or more different values to your conversion goals. These can be real economic values, like revenue or proxy values, like a lead score. You can measure multiple values for a single conversion goal (dynamic values) or the same conversion value for two or more unique conversion goals (static values).
You may observe conversions occurring with varied delays up to 7 days after users click on an ad. Instead of waiting for 7 days after the click to report all conversions to Google, report them immediately if they occur online or daily if using an offline feed. Maintain this pattern consistently to ensure good performance.
Activate value-based bidding
Before you enable value-based bidding for your campaigns, ensure that you have checked your goals.
- Determine your goal: Does your conversion goal need to change? If so, begin optimizing to the new conversion goal before bidding to value. For example, if you’re bidding to Lead Form Submits on target CPA and want to bid to Qualified Leads on Target ROAS, transition to Qualified Leads on CPA first. You can begin passing the values while bidding to CPA prior to enabling value-based bidding. Learn more about Changing conversion goals and actions used for Smart Bidding for more information on how to transition smoothly.
- Upload values once you’re bidding to your desired conversion goal, upload values for 4 weeks or 3 conversion cycles, whichever is longer, before activating value-based bidding. Avoid backfilling historical value data.
- Set reasonable targets: If you have a limited budget, it’s best to use Maximize conversion value bidding without a Target ROAS. If you have an unconstrained budget and you prefer to set a target, review your historical 30 day ROAS performance data, and use it as a benchmark to set a conservative target.
- Adjust Targets: When using value-based bidding, change target ROAS as business needs dictate keeping the below in mind:
- If you want to increase total conversion value, consider reducing the target ROAS (for example, from 300% to 200%). Reducing the target ROAS allows the bid strategy to be more competitive in auctions and likely generate more conversion volume and value.
- Alternatively, if you want to increase your efficiency (such as, achieve a higher ROAS), you may raise the target ROAS (for example, 200% to 300%). Note: This could restrict the number of auctions you may enter and may result in less total conversion value.
- Bid Simulator: To understand how different ROAS targets will affect your performance, use Bid Simulator. For example, if you’re using Target ROAS bidding and want more conversion volume and more total conversion value, use Bid Simulator to see how you can lower your ROAS target to get the desired results. Learn to use bid simulators.
Keep in Mind: While we encourage you to change targets as your business needs dictate, please note that making changes within a conversion cycle may make it harder to assess bidding performance. It’s recommended that you wait 1-2 full conversion cycles before comparing average target ROAS to the actual ROAS performance using the Bid Strategy Report. Learn more about How to make target adjustments with Search Smart Bidding.
Unless there is a true business need, avoid making multiple ROAS target changes within a single conversion cycle. Changing the target before 100% of conversions have been reported may make it more difficult to follow best practices for accurate performance assessment. Additionally, changing the target often mid-conversion cycle could impede performance. This is because the bidder receives multiple desired outcomes (targets) which may cause it to take longer to hit your actual goal.
If you want to test value bidding with a campaign experiment, refer to About Value based bidding campaign experiments article for a list of steps and best practices. It’s important to set up the trial arm for success and follow the strict ramp up timelines.
- Ensure that ROAS targets and changes are in line with CPA targets and changes in the control arm. Not doing so can lead to an unfair test.
- If the experiment arm is slow to ramp up, lower ROAS targets are needed to increase auction eligibility.
Managing value-based bidding performance
Once you activate value-based bidding, there are a number of tools and best practices to keep in mind to ensure your campaign performance stays on track. Read these tips on measuring Target ROAS performance for details on the following:
