Target ROAS (tROAS)

What It Is

Target ROAS (tROAS) is a Smart Bidding strategy in Google Ads and Meta Ads where you tell the platform the average return you want to earn for every dollar of ad spend, and the platform automatically adjusts bids to hit that target. It only works once the account is tracking the revenue value of each conversion, not just the count.

Formula

Target ROAS = Conversion Value / Ad Spend × 100%

A 400% Target ROAS means you want $4 in tracked revenue back for every $1 spent. A 200% target means $2 back per $1. Conversion Value is the revenue you assign to each conversion, and Ad Spend is the total cost of the campaign over the same window.

Why It Matters

For a local business, tROAS lets you bid on profit, not just leads. A plumber whose average job is $600 and whose close rate is 40 percent can tell the algorithm exactly how much each click is worth and let it spend more on the searches likely to produce paying customers and less on the noise.

Common Misconception

Owners often pick a target like 800 percent because higher sounds better. In reality, an unrealistically high target makes the platform throttle delivery to almost nothing, because few auctions can clear that bar. A workable Target ROAS is set just slightly above what the account is already producing organically.

FAQ

What is the difference between tROAS and Target CPA?

Target CPA tells the algorithm to hit a cost per conversion. Target ROAS tells it to hit a ratio of revenue to spend. tROAS only works when each conversion has a dollar value attached. If all your conversions are worth the same, use Target CPA.

How many conversions do I need before Target ROAS works?

Google generally recommends at least 50 conversions in the past 30 days at the campaign level before tROAS has enough data to optimize reliably. With fewer than that, the algorithm tends to under-deliver or chase the wrong signals.