A decrease in the average target return on ad spend (ROAS) can potentially help improve the actual return on ad spend (TROAS) in some cases. Here’s how:
- Increased efficiency: Lowering your target ROAS can help you bid more aggressively on high-performing keywords and placements, which can drive more conversions and improve TROAS.
- Better targeting: Lowering your target ROAS can also help you reach a larger audience, as you’ll be able to afford to bid on more keywords and placements. This can help you reach more people who are likely to convert, which can improve TROAS.
- Remove unprofitable campaigns: By lowering your target ROAS, you will be able to identify campaigns that are not performing well and remove them which can improve TROAS.
- Cost savings: Lowering your target ROAS can also help you save money on ad spend, which can improve TROAS by allowing you to reallocate that budget to more profitable campaigns.
However, it is important to note that there is a trade-off between ROAS and volume, and lowering your target ROAS too much can result in a decrease in the volume of conversions and ultimately lead to lower TROAS. It is important to find the right balance and continuously monitor and adjust the target ROAS to optimize the TROAS.