Hold or Fold when ROAS is low?

The biggest stress the campaign manager experiences in managing the Performance Max campaign is the waiting period when the performance is under the target.

Do you hold or fold? We are offering two pieces of advice that might help you ease the stress:

Attribution of conversions by time

First, you need to understand how Google reports conversions. Google attributes conversions to the date of clicks by default and not the date of conversions.

This basically means that your most recent performance data may undercount conversions since the conversion has NOT happened yet for these clicks.

For example, if it takes 5 days for users to convert after the initial engagement, you can only get complete conversions data from 6 days ago. If you are looking at data fresher than 5 days, you would miss conversion data, therefore incorrect undercutting ROAS.

What is your conversion window?

This is how you can find your conversion window:

  1. Segment your conversions by days to conversion.
  2. Check the conversion data for each campaign by day.
  3. What are the max days that conversion still shows up? That is your conversion window.

Use conversion by time and conversion fields together.  

Google introduced a new field called conversion by time, based on conversion time. Use conversion by time to confirm that more recent conversions are still floating. For instance, during a high-traffic day like Black Friday sales, it is helpful to ensure you are receiving significant conversions based on conversion by time. 

Don’t make a drastic change to the learning phrase

This is the initial stage when you start a campaign, and your model is still learning.

There is not a lot you can do this time. Other than trusting the process and making sure your data is correct.

Waiting during the period when your model is still learning is to be expected. It is uncomfortable to watch a performance so unstable while your spending is up.  What you can do is:

  • Ensure your tracking data is accurate
  • Don’t make drastic changes
  • Be patient

 

Scaling phrase

During this phase, you have some steady performance and a good understanding of the click window, we can adjust the dynamic of budget and target to scale the campaign.

Budget VS Target

You adjust the budget to you adjust the total amount available to spend but your ability to spend depends on your target level. For example, if your target is too high, your spending ability is low. An increase in the budget won’t have an impact on spending in this case. If you are concerned about spending, you can raise the target rather than reduce the budget.

To scale your campaign, you typically go through this cycle:

  1. Frontloading: lower target to get more spending.
  2. Optimize the campaign to improve ROAS (for example, use the insight tab to improve audience signals and web assets)
  3. Raise the target back to normal and ensure the campaign can maintain the spending level
  4. repeat

 

IS YOUR CONVERSION SIGNAL TOO WEAK?

The algorithm needs to learn. You might see some crazy shift in performance at the beginning, especially if you don’t have enough conversions on regular basis. 

If your conversion behavior is a highly involved service (like selling a car or a house), try to use data points can serve as an indicator of the conversions to increase your signal strength (e.g., instead of looking for the converter, looking for the involved visitors) 

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