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Using flexible bid strategies

traffic and conversions going down

9:46 pm on May 28, 2015 (gmt 0)

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joined:June 2, 2006
votes: 8

Recently I started using ROAS bid strategies (target return on ad spend), and I wonder about your experience. I'm around 10 days into it.

What I saw so far was a decrease in bids for many ad groups and keywords to the point where they get zero impressions. Bids were set to as low as 3 cents.
While the math may look correct where the conversion is almost 300%, that does not do much if the CPC is so low that I get 2 conversions per campaign for the whole day. The same campaign was making 20 conversion prior this.

Not that I'm here to blame the feature, but to ask for some advice and have you share your experience.

1:36 pm on May 29, 2015 (gmt 0)

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joined:June 22, 2010
posts: 63
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I personally don't like the idea of using flexible bid strategies. I feel like I'm giving over to much power to Google to manage my campaigns. This is just how I feel personally... I know my Google Reps are trying to shove flexible bid strategies down my throat right now, but I feel that give Google to much room to spend clients money anyway they please. In your case I have a feeling that you set your target ROAS to high. If you set your target ROAS to high then Google is only going to filter in traffic that it feels is going to bring you that target ROAS. You say that before you had a ROAS of 300%... well in order to get that average you had to get 50% of your conversions at a ROAS (I call this Value to Cost Ratio) lower then 300% (this could vary depending on a number of factors, but I'm stating 50% just to make a point here). Let's say that last month you had $9,000 in revenue with a cost of $3,000... that put's us at a 300% ROAS (Value to Cost Ratio = Revenue / Cost * 100). Assuming that 50% of your conversions converted at a ROAS of 250% and the other half converted at 350%...your average would be 300%. However, if you had your target ROAS Flexible Bid Strategy in place, and if your target ROAS is set to 300% or higher, you would have lost all of the conversions that converted at a ROAS lower than 300% because Google is only going to bid on keywords that it feels will meet this criteria... in order to do this they will lower your CPC to try and get the most traffic possible. I would be curious to hear what your conversion rates were post and prior. I probably the worst person to answer this question as I don't use flexible bid strategies, but what you are experiencing is part of the reason why. I would basically try lowering your target ROAS to the lowest possible percentage you would be willing to accept for a conversion, and not think of it as an "average" target ROAS. I don't know if I helped or made it worse, but this is my 2.

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