The rule that sets your bids in each auction. You can set bids yourself (Manual CPC) or let Google or Meta set them automatically towards a goal such as clicks, conversions, a target cost per conversion or a target return on ad spend.
Example
Meera began her Search campaign on Manual CPC to learn which keywords sell. Once it had a steady record of tracked orders, she tried Maximise conversions with the same ₹40,000 monthly budget.
How you'll hear it
“We'll move the campaign to Target ROAS once we have enough conversion data to trust it.”
What it helps you decide
How much control you keep versus hand to automation, and what you ask the platform to optimise for: volume, cost per result or return.
Where people misread it
Thinking the strategy with the most impressive-sounding target is best. A strict target such as a high Target ROAS can make the platform bid only on the surest auctions, so spend and total sales shrink.
The story
Meera's Search campaign earns ₹2,00,000 in tracked sales (100 orders of ₹2,000) from ₹40,000 a month, a ROAS of 5x. She switches to Target ROAS and sets 7x, hoping for more return on each rupee.
| Spend before | ₹40,000 |
| Tracked sales before | ₹2,00,000 |
| Gross profit before ads (70% of sales) | ₹1,40,000 |
| Profit after ad spend, before | ₹1,00,000 |
|---|---|
| Spend after | ₹15,000 |
| Tracked sales after | ₹90,000 |
| Gross profit before ads (70% of sales) | ₹63,000 |
| Profit after ad spend, after | ₹48,000 |
What looks right: ROAS climbed from 5x to 6x.
What it hides: the system stopped bidding on many auctions to protect the target. Spend fell and so did sales. Profit after ad spend dropped by ₹52,000.
What to look at instead: total profit after ad spend, not the ratio alone. Set targets near what the campaign already achieves, and change them in small steps.
Clothes cost 30% of selling price, so gross profit is 70% of sales; this ignores rent and salaries. All figures are fictional and for illustration only.
Don't confuse it with
- Bid: one amount for one auction; the strategy decides that amount every time.
- Campaign objective (Meta): what you want from the campaign; the bid strategy is how the platform pursues it.
Related terms
Want to use this at work? AI-led PPC Excellence is aFactor's 16-week program for paid ads.
Sources
- Determine a bid strategy based on your goals, Google Ads Help
- About Smart Bidding, Google Ads Help