Are you applying tROAS or tCPA in your Google Ads campaigns and noticing a drop in conversions?

Find out why this could be happening, and how you can avoid the issue. Regina Bellows, executive director of StarterPPC, will take you through an informative example that demonstrates how these bidding strategies affect your impressions, clicks, and budget—so don’t miss out on her valuable insight!

Don't let conversion issues stand between you and success. Tune into our engaging video for some actionable tips to optimize your campaigns and get those numbers climbing again.

Listen to this episode now for all of Regina's advice on boosting conversions with tROAS or tCPA!

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0:00 Why Applying tROAS or tCPA Hurt Conversions

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#googleads #googleadsbestpractices #googleadsagency

Hi everyone, Regina here at Starter PPC.

2

Today we're talking about the bid

settings called TCPA and TROAS.

3

That stands for target cost per

acquisition and target row as if

4

anyone has tried to use these settings

and you notice that your impressions

5

and your clicks plummet along with

your budget, Being spent 100 percent

6

when the T ROAS or T CPA is applied.

7

I'm going to explain why that happens.

8

But first, let's just look at

an example so everyone knows

9

what we're talking about.

10

We're all on the same page here.

11

So this is one of our clients and

what I'm going to do is head over to

12

the change history here on the left.

13

And I'm just going to look back in time

through a couple of months because I want

14

to find an example of when we applied

the target ROAS or target CPA settings.

15

Now for those of you who aren't familiar

with these settings, it's, one of many

16

ways of telling the algorithm how to

bid right within the auction what kinds

17

of cost per clicks you're willing to

pay and what kind of a return you need.

18

So if you set a TROAS setting, you're

saying, Hey, algorithm, I want you to get

19

me a ROAS of whatever your setting is.

20

Let's say you set it at 200%.

21

You're like, I really need this return.

22

Where I spend a dollar and

I get 2 in return, right?

23

That's a 200 percent return.

24

you're kind of automating.

25

Whatever the algorithm does and saying

you can bid whatever you want, wherever

26

you want, however you want, as long as you

get me an average of 200 percent return.

27

that's the intent behind a TROAS setting.

28

does it always work out that way?

29

here we go.

30

Performance Max shopping only.

31

that's just a Performance Max campaign

where we don't really give it any assets.

32

We only give it the shopping feed.

33

So it kind of runs like a

smart shopping campaign.

34

So on April 19th, we applied a Target

ROAS setting of a hundred percent.

35

And on April 28th, we removed

that Target ROAS setting.

36

So let's go and look at this

campaign between these two

37

dates, the 19th and the 20th.

38

This was April 19th through April 28th,

and let's just compare it with the

39

previous period so we can say, we can see

how the numbers changed during that time

40

period compared to the previous period.

41

Okay, so first thing that we can

see for this PMAX Shopping Only

42

campaign, that's the one here on the

top, is cost went down 74%, right?

43

So it was spending 600 per

day, now it's spending 166.

44

Impressions went down 76%, wow.

45

Clicks also went down 75%.

46

The average cost per click

actually went up a tiny bit.

47

However, click through

rate went up a tiny bit.

48

That's good.

49

Conversion rate went up a ton, 500

percent increase in conversion rate.

50

And best of all, our return,

return on ad spend, right?

51

Which we all know.

52

ROAS isn't exactly accurate because we're

probably missing a lot of conversions

53

in here due to privacy restrictions and

Google's inability to track appropriately.

54

However the ROAS that we can see is

still relevant in comparison to the

55

ROAS before in the time period before

we can see that this went up quite

56

a bit, actually almost 50 percent

increase from 72 percent to 106%.

57

And what do we tell it to

get with the TROAS setting?

58

100, right?

59

So we were getting 72 in this campaign

and we said, we'd like you to get us 100.

60

you might be looking at this going,

well, that's not a very high ROAS,

61

but again Is shrinking every day.

62

You guys, this is a video for

another time, but with privacy laws

63

and Google's inability to track

appropriately, if you're seeing a

64

hundred percent inside of your Google

ads campaign, check your, check your

65

total return for the total business.

66

I'd be willing to bet you that

it's a 200 or a 300 percent.

67

That's how bad ROAS is right now.

68

It just looks worse than it is.

69

here's what happened.

70

On April let's see, April 19th through

the 28th, we applied a tROAS setting.

71

We told it we wanted 100.

72

Google's algorithm

said, Great, no problem.

73

I can get you 100.

74

But what was the cost of that?

75

It got way less conversions, you

guys, actually, I don't even have

76

the conversions column pulled

up, but if I pulled it up, I

77

can tell you with certainty,

actually, let's go and pull it up.

78

I'm going to click on columns, modify

columns, search for conversions.

79

Conversions.

80

I like conversions by time.

81

Conversions went up.

82

Interesting.

83

it spent less.

84

Impressions went down a lot.

85

Clicks went down a lot, but

somehow conversions went up.

86

That's unusual.

87

Usually the conversions will go down

and you'll just get less conversions.

88

I wonder what would happen if

we looked at conversion value.

89

A lot of businesses, especially

those that are just starting

90

out have limited budgets.

91

And so because of this, they're turned

away by most ad agencies because most ad

92

agencies have minimum budget thresholds

that they're willing to work with.

93

So what happens is the business owners

end up learning Google ads themselves.

94

Okay.

95

Conversion value went down.

96

So that's really the

only thing that mattered.

97

Wow.

98

Conversion value went down 62%.

99

So it looks like it's continuing

to get conversions, but it's just

100

going after people that don't

have a high average order value.

101

I think there's an average order

value column that we could pull up.

102

Of AOV, which is probably a custom column

I just pulled it up, but I guess I didn't.

103

Let me try again.

104

Average order value.

105

Oh, there we go.

106

Now it's pulled up.

107

Average order value went down 76%.

108

So in this case, the algorithm

said, sure thing, I can get

109

you that 100 percent return.

110

I can get your ROAS to go up.

111

But in doing that, you're

going to lose conversion value.

112

In fact, I'm going to make that happen

by just going after the low hanging

113

fruit of people that have a lower average

order value because I know that the

114

conversion rate on those is much higher.

115

Conversion rate is 500 percent higher.

116

That's crazy.

117

So why does this happen?

118

Let's talk about this a little bit.

119

the way the algorithm kind of

thinks is, is in terms of like

120

pockets of the market, right?

121

So it might go, well, I

have this pocket over here.

122

Who's interested in

this type of a product.

123

And they have this pocket over here who

actually went to the website and proved

124

that they're interested in this particular

product, it might have a 200 different

125

little pockets that it's looking at.

126

And within those pockets,

it kind of knows.

127

These people average this AOV,

this kind of conversion rate.

128

I can bid pay this much cost per click.

129

So if you tell it I really

need to hit my goals.

130

I really need to pay my bills.

131

I would like to get a higher return.

132

It's going to say, okay,

I know what I'll do.

133

I, I have 200 pockets of the

market, but only a couple of

134

them over here at the top.

135

Those are the ones that are actually

getting a 100 percent return.

136

So I'm just going to get rid of the rest.

137

I'm not going to bid on those anymore.

138

And I'm just going to go after the,

the most profitable in terms of return.

139

And it'll get you what you want, right?

140

But it might not spend the daily budget.

141

In this case, the cost went

down a whole whopping 75%.

142

Unfortunately, this t res setting,

which is so enticing, and it's the

143

same with TCPA, you want to use it,

you want to apply it, because you know

144

that you have to hit that return, and

you have to get the algorithm to get

145

That profitability up for every sale.

146

Unfortunately, it's just

hard to scale that way.

147

The algorithm now is kind

of focused on goal hitting.

148

It's not really just it's, you know, it's

not going after all the other pockets

149

of the market that it kind of discarded

because right now it's just looking at the

150

tippy top, most profitable ones for you.

151

And so businesses come to us often saying,

I don't know why, but I can't scale every

152

time I add budget, doesn't spend, or every

time I add budget, my ROAS goes down.

153

That's because that TROAS setting

is not a setting for scaling.

154

It's good to use temporarily.

155

But you have to allow the algorithm

to go through what we like to

156

call mini learning phases, right?

157

Where you don't have that

setting turned on and you just

158

let it you let it do its thing.

159

You let it observe new

pockets of the market.

160

And in fact, you have to push it through

to tough times too, where during those

161

times when the T row has isn't applied,

you add a tiny bit more budget and

162

you let it learn a whole new pocket of

the market where you might discover.

163

That, oh, this is actually the

pocket of the market that's gonna

164

help us do our next scale period.

165

be wary of that tROAS setting,

only use it sparingly.

166

We actually have a maximum time limit

that we're willing to apply it each month.

167

So that's how we've kind of like contained

the temptation to use tROAS over here.

168

We have a lot of processes

in place like that.

169

best of luck to you.

170

If you need help scaling,

we're here for you.