Last week, Google Ads Liason answered common questions and misconceptions about value-based bidding.
Ginny Marvin joined LinkedIn and Twitter platforms for a week-long series of posts explaining the pros and cons of value-based bidding.
Last week, Marvin wrapped up the series by answering common questions from advertisers he got along the way.
Read on to learn more about Google’s take on value-based bidding.
Day 1: Value-based bidding basics
Marvin laid the groundwork for value-based bidding on the first day of publications.
What is Value Based Bidding (VBB)?
VBB seeks to maximize conversion value within your budget and optional ROAS target
It is optimized for the intended auctions to deliver a high conversion value
It is designed to return a higher total conversion value, but a lower conversion volume compared to the Maximize Conversions/Target CPA (tCP)A bid.
Who should use value-based bidding?
In Marvin’s experience, Google has seen VBB success for businesses of all sizes and conversion cycles:
Lead Generation Online Sales Brick and Mortar
Marvin also said:
The key to using VBB is setting values for the conversions you’re tracking and entering the appropriate custom data into Google Ads. Define the value you want to maximize, such as sales revenue, profit margins, lifetime value, etc.
To round out Day 1, Marvin answered some questions about conversions and their impact on VBB usage.
To use VBB, most campaigns need at least 15 conversions in the last 30 days.
Google also recommends optimizing lower funnel conversions if conversion value is maximized.
Value-based bidding configuration values
The second day of the week-long series was all about tickets and campaign setup. Marvin answered the following questions.
Can VBB optimize value and volume?
If you have value targets, you should use VBB. ROAS goals are your lever to make your ads more or less likely to enter the auction. The higher your target, the less likely auctions your ads will participate in.
You can use bid simulators to see the impact that setting lower ROAS targets can have on increasing reach and volume.
How can I minimize volume loss when switching to Target ROAS (tROAS)?
Marvin stated that advertisers switching to tROAS should expect lower volume initially when switching from conversion-based bidding.
Lower volume is expected because the algorithm is optimizing for the most valuable customers instead of the most conversions within your goals.
A tip from Marvin on changing your bidding strategy:
Make sure the bidding system has learned from your values and that your ROAS is in line with historical performance to ensure conversion quality.
Day 3: Report and evaluate performance
Day 3 focused on answering questions about how Google uses your data to inform real-time offers.
Does Google not know the meaning of the values I pass to bid?
Marvin clarified that Google only interprets your values as a scale to inform decisions to help achieve your goals.
He also mentioned that Google continues to innovate ways to share data, such as improved lead conversions in a secure manner.
Is my conversion value data being used to help my competitors?
Google’s bidding algorithm models are trained on highly aggregated advertiser data to continuously learn and improve predictions.
Google will never share your conversion values or volume with other advertisers.
How long should I wait to measure tROAS performance?
Marvin recommended giving the bid strategy two weeks or three conversion cycles before evaluating it to give the strategy enough time to learn and adapt. It may take more time to make sure you have enough conversion data to evaluate.
Day 4: Answer the advertisers’ questions
The week-long series of value-based offers showed high engagement on both LinkedIn and Twitter.
Many advertisers responded with their questions, which Marvin intended to answer the most common questions.
What are the best practices for using multiple conversion actions with different values?
You can use multiple conversion actions with different values. Google’s best practice is to upload actual conversion values aligned with your business goals.
Any conversion actions included in the conversions column are used to report Maximize Conversion Value/tROAS bids.
What is the best practice for assigning values to offline conversions for lead generation?
Marvin answered this question with the following quote:
If your goal is to differentiate conversions based on their value to your business, measure them against your business results if possible.
Can I optimize for profit or another KPI using tROAS?
Yes, that’s why Google allows advertisers to use tracking values aligned with their business goals, such as profit values.
Advertisers can import LTV data, profit margins, gross merchandise value, etc. into Google Ads to optimize the metrics that matter most to your business.
Summary
Ginny Marvin did a great job engaging with advertisers last week about value-based bidding. Not only did he clarify how the strategies work, but he also answered many common questions that marketers still had.
Find the entire threads of the weekly series LinkedIn or Twitter.
Featured image: Tetiana Yurchenko/Shutterstock
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