Summary
Target ROAS is the bid strategy that gives the specific efficiency guardrail for a $5 return on every $1 spent. You enter it as 500% under Maximize conversion value in the campaign bidding settings. It only performs as expected when the conversion action passes real transaction values into the account.
Nitin Batra is Google Ads Search certified and manages value based Smart Bidding strategies, including Target ROAS, across live ecommerce and retail search accounts.
Last updated: August 22, 2026
- Maximize conversions
- Target ROAS
- Maximize clicks
- Target impression share
The correct answer is: Target ROAS
Key Takeaways
- – Target ROAS is the bid strategy that provides the efficiency guardrail for a $5 return on every $1 spent, entered as a 500% target.
- – You configure it under Settings, Bidding by selecting Maximize conversion value and then setting a target return on ad spend percentage.
- – Target ROAS needs conversion values in the account, so the conversion action must send dynamic transaction values, not a single fixed value.
- – Raising the target too high shrinks eligible auctions and volume drops, so most accounts move targets in 10 to 20 percent steps rather than jumping straight to an aspirational number.
How do I convert a $5 return per $1 spent into a target ROAS percentage?
Divide revenue by cost and multiply by 100. Five dollars of revenue against one dollar of spend is 5.0, which is 500% in the Google Ads field. Google Ads asks for the percentage, so entering 5 instead of 500 would tell the system you only want five cents back per dollar.
What is the difference between Target ROAS and Target CPA?
Target CPA optimises to a cost per conversion and treats every conversion as equal, which suits lead generation where each lead has roughly the same worth. Target ROAS optimises to the value of each conversion, so it will chase a high value sale even at a higher cost per acquisition. For ecommerce and luxury retail where basket sizes vary, Target ROAS is the correct fit.
Why does Maximize conversions not work for this profitability goal?
Maximize conversions spends the budget to get the highest count of conversions, with no view of what each one is worth. A campaign could hit a great conversion volume while selling only the cheapest items and still lose money for a luxury brand. It also has no field where you can state a required return, so there is no efficiency guardrail at all.
What happens if I set the target ROAS too high?
Google Ads will simply stop bidding in auctions it does not believe can hit the target, so impressions, clicks and spend all fall away. You often see this as a campaign that suddenly underspends its budget. Check the bid strategy report and the Search impression share lost to rank column, then lower the target in steps and let each change run at least two weeks before judging it.
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