Let’s say you’re Google and you’ve got a smart advertiser who is using a target ROAS bidding strategy.
The campaign is running smoothly, ROAS targets are crushed, and the campaign budget leaves room for a lot more spending.
What’s keeping you from setting a crazy high bid for that click in the next auction? Not much, right?
According to Google’s documentation, target ROAS bidding will
“set maximum cost-per-click (max. CPC) bids to maximize your conversion value while trying to achieve an average return on ad spend (ROAS) equal to your target.”
So, if the average ROAS is above target and the budget is not yet spent… guess what, extremely high CPCs are not an exception. We are all in it for the money, right?
Luckily for us, there is a slightly hidden secret to prevent this from happening: you can set a max CPC bid if you are using a portfolio version of the target ROAS smart bidding!
(It’s under “Settings > Advanced options” in your Portfolio bid strategy.)
– Nils
PS: Do you currently monitor for high actual CPCs in your account? If so, please let me know. I’d love to learn how you do it.