Measuring and monitoring your return on ad spend (ROAS) is critical in maximizing its performance. No business wants to waste money on ads that fail to have good returns.

ROAS serves as a good metric when it comes to measuring the performance and financial return of your campaign, ads or digital advertising strategy.To make this even more precise, Google Ads has now enabled a bid simulator for Target ROAS as well as a budget simulator for maximize clicks and maximize conversion.

Previously this was only available for manual and target CPA bidding.

‍But how does this work?

‍The bid simulator works the same way as Target and Manual CPA bidding campaigns. The projection uses data from auctions that have taken place in the last seven days. It assumes that all other factors (landing pages, ads, competitor ads, bids) remain constant.

Therefore, the bid simulator ensures that one understands the potential performance of a campaign on different ad levels. By using the Target ROAS bid simulator you’ll get to comprehend the relationship between a ROAS target and your campaign’s key metrics.

This way as an advertiser you’ll know the impact of a higher target on your campaign performance.This also means that as an advertiser you have an efficient tool to allocate the right budget for campaigns.At this point, an advertiser can now make use of the budget simulator. Once you set a budget the Maximize clicks or Maximize conversions bid strategies aim to spend the entire budget with the sole purpose of maximizing daily clicks or conversions.

The best thing about using a budget simulator is that if you run out of budget before the day ends, it will indicate on the “status” column the impact that changing the daily budget would have on your campaign.

‍Make informed decisions

‍Effective advertising means more revenue. With the bid and budget simulators, you get tools to enhance smart bidding strategies that allow you to project the impact of the bid or budget changes in your campaigns. It also helps in coming up with the ideal budget across multiple campaigns.

However, you should not forget that although these projections help visualize the impact of a projected bid or budget adjustments, the actual performance may vary since the projection is based on historical data.