How do you test and experiment with different ROAS and CPC scenarios and bids?

1 Set your goals and budget

Before you start testing and experimenting, you need to have a clear idea of what you want to achieve and how much you can afford to spend. Your goals and budget will determine your target ROAS and CPC, as well as the scope and duration of your tests. For example, if you want to increase conversions by 10% and your budget is $1,000, you can calculate your target ROAS and CPC based on your average conversion value and conversion rate.

2 Choose your testing method and platform

There are different ways to test and experiment with different ROAS and CPC scenarios and bids, depending on your objectives, resources, and preferences. One common method is split testing or A/B testing, where you compare two or more variations of your ads, landing pages, keywords, or bids to see which one performs better. Another method is multivariate testing, where you test multiple combinations of elements at once to find the optimal mix. You can use various platforms and tools to run your tests, such as Google Ads, Google Optimize, Microsoft Advertising, or third-party software.

3 Create your test scenarios and hypotheses

Once you have your goals, budget, testing method, and platform ready, you can create your test scenarios and hypotheses. A test scenario is a specific combination of ROAS and CPC values that you want to try out. A hypothesis is a prediction of what will happen if you apply that scenario to your campaign. For example, a test scenario could be increasing your ROAS from 4:1 to 5:1 and decreasing your CPC from $1 to $0.8. A hypothesis could be that this scenario will increase your conversions and revenue without affecting your traffic volume.

4 Run your tests and collect data

After you have your test scenarios and hypotheses, you can run your tests and collect data. Depending on your testing method and platform, you can set up your tests manually or automatically, and control the traffic allocation, duration, and frequency of your tests. You should also monitor your key performance indicators (KPIs), such as impressions, clicks, conversions, revenue, ROAS, and CPC, to see how your tests are affecting your campaign results.

5 Analyze your results and draw conclusions

When your tests are completed, you can analyze your results and draw conclusions. You should compare your test scenarios with your baseline or control scenario, and see which one achieved your goals and budget. You should also check if your hypotheses were confirmed or rejected, and why. For example, you might find that increasing your ROAS and decreasing your CPC improved your conversions and revenue, but also reduced your traffic volume and market share.

6 Implement your learnings and optimize your campaigns

The final step is to implement your learnings and optimize your campaigns. You should apply the best performing scenario to your campaign, and monitor its performance over time. You should also use the insights from your tests and experiments to improve your ad copy, landing pages, keywords, and bids. You can also repeat the testing and experimenting process with different variables and goals, to keep optimizing your ROAS and CPC.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?