What is Target ROAS Conversion Bid Strategy?

Target ROAS is one of four modes that Outbrain offers for auto-optimizing towards conversions within Conversion Bid Strategy (CBS).

Target ROAS bid strategy is a great tool for marketers that have a business goal of maximizing the purchase value from each conversion or mobile app install.

What is ROAS?

ROAS stands for return on ad spend and is a marketing metric that measures how much revenue you make, or expect to make, in comparison to your advertising spend. In other words, it answers the question, “If I spend x amount of money on advertising, how much will I make back in sales?”

Your Target ROAS will be shown as a percentage. For instance, if your Target ROAS is 150%, you expect to make $150 back for every $100 you spend on advertising with Outbrain.

What is Target ROAS mode?

This CBS mode is designed to serve content where your desired ROAS can be reached, based on the total conversion or order value you’d like to receive for each dollar you spend on Outbrain. To do this, we not only bring traffic to top-converting publisher sections that meet your desired ROAS, but we also dynamically change your campaign CPC to deliver a return value that meets your target ROAS over the duration of the campaign.

Who should use Target ROAS mode?

Marketers focused on driving online sales and have the ability to pass back conversion value data
E-commerce clients
Marketers with different values per conversion
App marketers with in-app purchase objectives

Who shouldn’t use Target ROAS?

You shouldn’t consider Target ROAS if you are:

a marketer that is running campaigns with low conversion volume for your sales/purchase (less than 8 conversions a week).
a marketer that wants to maintain full control over CPCs. Consider using Semi Manual mode instead.
a marketer whose priority is a specific CPA goal. Consider using Target CPA instead.

How do I enable Target ROAS mode?

Select “App Installs” or “Conversions” as your Campaign Objective.

In the Budget & Bidding section, select “Target ROAS” from the Optimization mode selection menu:

Specify the conversion* that you wish to optimize towards and define the ROAS value and campaign budget. Remember that ROAS is a percentage, so if ROAS goal is 150%, that means you would expect to spend $100 and get a return of $150.
For CBS setup best practices, please refer to this article.

*Keep in mind: implementing a conversion event with Target ROAS mode is mandatory. If you’re looking for information about conversions and pixel implementation, click here.

To ensure the accuracy of your ROAS calculation, make sure you’re dynamically passing back conversion sales data. Refer to the “How do I implement dynamic values?” Help Center article to learn more.

How do I optimize my campaign with Target ROAS enabled?

Once you’ve turned on your campaign and confirmed progress towards your goals after the initial learning period, very little manual campaign management is needed.

However, there are some guidelines that can help you scale your campaign if you’re happy with the performance or make adjustments if you’re not reaching your goals.

During Learning period:

Once live, wait at least 48 hours before making any adjustments.
If you’re optimizing towards a conversion lower in the funnel (0.5 – 3% conversion rate), consider adding another conversion (with 10-20% conversion rate) to expedite the learning period.

After learning period:

If you’re looking to scale your campaigns:

Increase the campaign budget and wait a few days between changes.
If you are using a Bid Cap limit, and the scale is limited by that Bid Cap, you will see a “Maxed” indication in the CPC reporting column. In this case, navigate to campaign settings and increase the Bid Cap value to enable more scale.

If you’re are looking to improve performance:

Double-check your conversion set up to make sure it’s working properly*.
Make sure you’ve set up a realistic ROAS target. Setting unrealistic goals will cause the system to decrease your CPCs in order to not spend the budget if it’s not able to meet your goal. Refer to this article to learn more.
Try out testing new ad combinations that could yield higher CTRs.
Decrease the campaign budget by maximum 30% and wait a few days between changes.

*Successful conversion tracking is one of the most important pillars of every conversion optimized campaign. Please check the following campaign details to ensure that we can collect enough data to optimize towards your target ROAS:

Is the pixel implemented correctly? For pixel implementation guidance, please check out this article.
Are values being passed back correctly? For assistance with Dynamic Values, please reference this article.
Is the pixel firing correctly on all platforms?

Working with Bid Cap:

To hit your target ROAS while maintaining the highest number of conversions within that ROAS, the system will automatically adjust the CPC for each serving based on multiple data points.
You are able to set a Bid Cap that will act as the maximum CPC amount you’re willing to pay for auctions with higher expected conversion rate. For best results, we suggest removing the Bid Cap or setting it as high as you’re willing to pay for high converting audiences.

There are cases where the system can get more conversions within your ROAS goal – in those cases, the system will increase the CPC. When the CPC reaches the Maximum CPC threshold (as defined by the Bid Cap), the system will no longer be able to raise bid higher. In that case, you will see a “Maxed” indication in the CPC column of your campaigns. To enable more scale and get more conversions with your target ROAS, either remove the Bid Cap limit, or raise it in campaign settings so the algorithm can continue optimizing and maximizing the number of conversions.

Still not sure about how to best use Target ROAS Conversion Bid Strategy? Check out our suggested best practices here.