Why a High ROAS Target Shrinks Google Ads Growth

Question 1

Why does chasing a higher ROAS target hurt Google Ads growth?

Accepted Answer

According to the article, chasing a higher ROAS target is a contraction strategy disguised by a flattering ratio. A target set too aggressively makes campaigns smaller by restricting auctions, producing a volume death spiral of fewer auctions, thinner conversion data, and worse predictions. The article states advertisers should treat ROAS as a floor to defend while pushing volume, not as a ceiling to raise.

Question 2

What does Smart Bidding actually do when I raise target ROAS?

Accepted Answer

The article states Smart Bidding does not try harder when the target is raised; it bids on fewer auctions. It only enters auctions where it predicts it can hit the required return, either bidding too low to win or not bidding at all otherwise.

Question 3

What happens if I raise target ROAS from 400% to 600%?

Accepted Answer

The article states that raising tROAS from 400% to 600% tells the algorithm to ignore every auction it predicts will return between 4x and 5.9x. Many of those auctions would have been profitable, and some would have returned more than predicted because predictions are probabilistic estimates. The result is lost volume, lost conversion data, worse prediction models, and more conservative bidding.

Question 4

Why does my account look more efficient right before growth stalls?

Accepted Answer

The article describes this as survivorship bias: the advertiser only sees the safest auctions the algorithm chose to enter, while discovery and new-customer campaigns are starved of budget. Accounts at an artificially high tROAS often show declining conversion volume alongside improving efficiency. The article cites the example of an advertiser at 900% ROAS with branded search making up 70% of conversions while competitors capture abandoned non-brand demand.

Question 5

Should I optimize for ROAS ratio or for total profit?

Accepted Answer

The article states that optimizing a ratio favors constraint over expansion, while growing a business requires absolute profit and volume. It compares Account A at 800% ROAS on $5,000 monthly spend generating $40,000 in revenue with Account B at 450% ROAS on $50,000 monthly spend generating $225,000 in revenue. Account A has the better ratio, but Account B has nearly six times the revenue and likely far more absolute profit depending on margins.

Question 6

How do I set a ROAS floor instead of a ROAS ceiling?

Accepted Answer

The article recommends setting a ROAS floor representing breakeven or minimum acceptable margin, then pursuing maximum volume above it. A ROAS floor says do not go below 250%, but take every profitable auction above that, while a ROAS ceiling says only take auctions predicted to hit 600%+. In practice this means running Max Conversion Value with no tROAS modifier or with tROAS set at the minimum profitability threshold, while judging performance on absolute profit.