Google has quietly changed how Target ROAS works

Google has quietly changed how Target ROAS works, and if you used to employ a ‘set and forget’ approach to this bidding strategy, you need to read this.

Target ROAS is one of the most common bidding settings in Google Ads. You tell Google how much revenue you want back for every £1 spent, and it adjusts bids to try to hit that number. A target of 450% means asking for £4.50 in sales per £1 spent.

Historically, that target worked more like a guardrail than an instruction. A campaign set to 450% could happily deliver 600% or more, and Google would keep chasing the better return if it could find it. A lot of founders and marketing leads set a target, watched it get comfortably beaten and never looked at it again.

That's changing. For campaigns limited by budget, Google is now much more likely to optimise towards the actual number you've set rather than exceeding it. A campaign averaging 600% against a 450% target can no longer be relied on to keep performing at 600%. Google may let it drift down towards 450% in exchange for more volume.

Google is now more likely to give you exactly what you asked for, and that might not be what you actually wanted.

There's a commercial angle worth being honest about too. Google makes more money when advertisers spend more, and a campaign sitting well above target represents spend it isn't capturing. Optimising harder towards the target you've set gives it more room to chase extra volume, even if that means giving up some efficiency along the way.

If you haven't looked at the Target ROAS sitting in your campaigns for a while, because Google has always beaten it comfortably, this is the moment to check. The right number depends on your margins, average order value and customer lifetime value, not on whatever the campaign happened to deliver last quarter.

Get a full breakdown - budgets, targets and Q4 scaling - is in this week's newsletter.