Hi everyone, Regina here at Starter PPC. Today we're talking about the bid settings called TCPA and TROAS. That stands for target cost per acquisition and target row as if anyone has tried to use these settings and you notice that your impressions and your clicks plummet along with your budget, Being spent 100 percent when the T ROAS or T CPA is applied. I'm going to explain why that happens. But first, let's just look at an example so everyone knows what we're talking about. We're all on the same page here. So this is one of our clients and what I'm going to do is head over to the change history here on the left. And I'm just going to look back in time through a couple of months because I want to find an example of when we applied the target ROAS or target CPA settings. Now for those of you who aren't familiar with these settings, it's, one of many ways of telling the algorithm how to bid right within the auction what kinds of cost per clicks you're willing to pay and what kind of a return you need. So if you set a TROAS setting, you're saying, Hey, algorithm, I want you to get me a ROAS of whatever your setting is. Let's say you set it at 200%. You're like, I really need this return. Where I spend a dollar and I get 2 in return, right? That's a 200 percent return. you're kind of automating. Whatever the algorithm does and saying you can bid whatever you want, wherever you want, however you want, as long as you get me an average of 200 percent return. that's the intent behind a TROAS setting. does it always work out that way? here we go. Performance Max shopping only. that's just a Performance Max campaign where we don't really give it any assets. We only give it the shopping feed. So it kind of runs like a smart shopping campaign. So on April 19th, we applied a Target ROAS setting of a hundred percent. And on April 28th, we removed that Target ROAS setting. So let's go and look at this campaign between these two dates, the 19th and the 20th. This was April 19th through April 28th, and let's just compare it with the previous period so we can say, we can see how the numbers changed during that time period compared to the previous period. Okay, so first thing that we can see for this PMAX Shopping Only campaign, that's the one here on the top, is cost went down 74%, right? So it was spending 600 per day, now it's spending 166. Impressions went down 76%, wow. Clicks also went down 75%. The average cost per click actually went up a tiny bit. However, click through rate went up a tiny bit. That's good. Conversion rate went up a ton, 500 percent increase in conversion rate. And best of all, our return, return on ad spend, right? Which we all know. ROAS isn't exactly accurate because we're probably missing a lot of conversions in here due to privacy restrictions and Google's inability to track appropriately. However the ROAS that we can see is still relevant in comparison to the ROAS before in the time period before we can see that this went up quite a bit, actually almost 50 percent increase from 72 percent to 106%. And what do we tell it to get with the TROAS setting? 100, right? So we were getting 72 in this campaign and we said, we'd like you to get us 100. you might be looking at this going, well, that's not a very high ROAS, but again Is shrinking every day. You guys, this is a video for another time, but with privacy laws and Google's inability to track appropriately, if you're seeing a hundred percent inside of your Google ads campaign, check your, check your total return for the total business. I'd be willing to bet you that it's a 200 or a 300 percent. That's how bad ROAS is right now. It just looks worse than it is. here's what happened. On April let's see, April 19th through the 28th, we applied a tROAS setting. We told it we wanted 100. Google's algorithm said, Great, no problem. I can get you 100. But what was the cost of that? It got way less conversions, you guys, actually, I don't even have the conversions column pulled up, but if I pulled it up, I can tell you with certainty, actually, let's go and pull it up. I'm going to click on columns, modify columns, search for conversions. Conversions. I like conversions by time. Conversions went up. Interesting. it spent less. Impressions went down a lot. Clicks went down a lot, but somehow conversions went up. That's unusual. Usually the conversions will go down and you'll just get less conversions. I wonder what would happen if we looked at conversion value. A lot of businesses, especially those that are just starting out have limited budgets. And so because of this, they're turned away by most ad agencies because most ad agencies have minimum budget thresholds that they're willing to work with. So what happens is the business owners end up learning Google ads themselves. Okay. Conversion value went down. So that's really the only thing that mattered. Wow. Conversion value went down 62%. So it looks like it's continuing to get conversions, but it's just going after people that don't have a high average order value. I think there's an average order value column that we could pull up. Of AOV, which is probably a custom column I just pulled it up, but I guess I didn't. Let me try again. Average order value. Oh, there we go. Now it's pulled up. Average order value went down 76%. So in this case, the algorithm said, sure thing, I can get you that 100 percent return. I can get your ROAS to go up. But in doing that, you're going to lose conversion value. In fact, I'm going to make that happen by just going after the low hanging fruit of people that have a lower average order value because I know that the conversion rate on those is much higher. Conversion rate is 500 percent higher. That's crazy. So why does this happen? Let's talk about this a little bit. the way the algorithm kind of thinks is, is in terms of like pockets of the market, right? So it might go, well, I have this pocket over here. Who's interested in this type of a product. And they have this pocket over here who actually went to the website and proved that they're interested in this particular product, it might have a 200 different little pockets that it's looking at. And within those pockets, it kind of knows. These people average this AOV, this kind of conversion rate. I can bid pay this much cost per click. So if you tell it I really need to hit my goals. I really need to pay my bills. I would like to get a higher return. It's going to say, okay, I know what I'll do. I, I have 200 pockets of the market, but only a couple of them over here at the top. Those are the ones that are actually getting a 100 percent return. So I'm just going to get rid of the rest. I'm not going to bid on those anymore. And I'm just going to go after the, the most profitable in terms of return. And it'll get you what you want, right? But it might not spend the daily budget. In this case, the cost went down a whole whopping 75%. Unfortunately, this t res setting, which is so enticing, and it's the same with TCPA, you want to use it, you want to apply it, because you know that you have to hit that return, and you have to get the algorithm to get That profitability up for every sale. Unfortunately, it's just hard to scale that way. The algorithm now is kind of focused on goal hitting. It's not really just it's, you know, it's not going after all the other pockets of the market that it kind of discarded because right now it's just looking at the tippy top, most profitable ones for you. And so businesses come to us often saying, I don't know why, but I can't scale every time I add budget, doesn't spend, or every time I add budget, my ROAS goes down. That's because that TROAS setting is not a setting for scaling. It's good to use temporarily. But you have to allow the algorithm to go through what we like to call mini learning phases, right? Where you don't have that setting turned on and you just let it you let it do its thing. You let it observe new pockets of the market. And in fact, you have to push it through to tough times too, where during those times when the T row has isn't applied, you add a tiny bit more budget and you let it learn a whole new pocket of the market where you might discover. That, oh, this is actually the pocket of the market that's gonna help us do our next scale period. be wary of that tROAS setting, only use it sparingly. We actually have a maximum time limit that we're willing to apply it each month. So that's how we've kind of like contained the temptation to use tROAS over here. We have a lot of processes in place like that. best of luck to you. If you need help scaling, we're here for you.