Google Offers Explainer On Worth Primarily based Bidding

Ginny Marvin, Google’s Ads Liaison, posted a Twitter thread with an explainer on Google Ads value-based bidding, VBB. Ginny wrote, “We’ve had lots of questions & heard some misconceptions about value-based bidding (VBB) recently. This week, I’ll be sharing info & resources about VBB & answering any questions you’ve got at the end of the week.”

So Ginny will be posting more, so I will just continue to update this thread with what she wrote, but here is part one:

(Q) What’s value-based bidding?

(A) VBB seeks to maximize conversion value within your budget & optional ROAS target. It optimizes for auctions predicted to deliver high conversion value. VBB is designed to return a higher total value of conversions but lower conversion volume vs. maximum conversion/tCPA bidding.

(Q) Who should use VBB?

(A) VBB works for lead generation, online sales & brick and mortar businesses of varied sizes and conversion cycles. The key to using VBB is setting values ​​for the conversions you’re tracking & feeding the right first-party data into Google Ads. You define the value you want to maximize, such as sales revenue, profit margins, lifetime value, etc. Here is more on using proxy values ​​next, but here’s more on conversion values ​​& how to set them.

(Q) What does setting a target ROAS do?

(A) If you set an optional Return on Ad Spend (ROAS) target, it will optimize towards getting as much conversion value as possible at that target. Target ROAS is available for single campaigns or a portfolio strategy across multiple campaigns.

(Q) Are there conversion minimums to use VBB?

(A) If you’re tracking conv values, you can use max conv value bidding. With tROAS, most campaign types need at least 15 conversions in the past 30 days. Check out the “Before you begin” section here.

(Q) What if I don’t have enough bottom-funnel conversions?

(A) Google recommends optimizing for your lowest-funnel conv action, but you can use a higher-funnel conv action if value measurement is an issue. Also, consider simplifying campaign structures, shared budgets & portfolio strategies.

There is more to come tomorrow, so I will keep adding more and more to this post as Ginny Marvin posted them on Twitter.

day two starts here:

(Q) Can I use VBB if I don’t know the value of conv actions in my sales funnel?

(A) Some companies have LTV, profit margins, gross merchandise value, etc., data that’s ready to be imported into Google Ads, but many businesses aren’t there yet. VBB can still work by using proxy values. This calculator can help you gauge the average value of stages in your sales funnel based on the values ​​you do know to get started. As you start experimenting, be patient. It can take time to establish the right proxy values ​​that drive meaningful value to the business. If you’re not switching conversion actions, you can use campaign experiments.

(Q) Can VBB optimize for value & volume?

(A) If you have value goals, you should use VBB. ROAS targets are your lever to make your ads more or less likely to enter the auction. The higher your target, the fewer auctions your ads are likely to enter.

You can use bid simulators to see the impact setting lower ROAS targets may have on increasing reach & volume.https://t.co/lHkicTKZIw

— AdsLiaison (@adsliaison) June 27, 2023

(Q) How do I minimize volume loss when switching to tROAS?

(A) You should expect lower volume when moving from conversion-based bidding. That’s because it’s optimizing for your most valuable customers instead of the most conversions within your targets. Be sure the bidding system has learned from your values ​​& that your tROAS is in line with historical performance to help ensure conversion quality.

(Q) What if I want to optimize for new customers with VBB?

(A) If you have value goals, but also need to acquire a specific number of new customers, consider VBB+NCA (new customer acquisition) bidding. Here’s more on using a NCA goal.

More tomorrow for day three…

Forum discussion at Twitter.