How much should you bid on Google Ads?

Setting the right Target ROAS (Return on Ad Spend) in Google Ads is one of the most important — and most misunderstood — decisions in ecommerce marketing. Most businesses set a number that feels right. This calculator works it out properly.

What is Target ROAS?

Target ROAS tells Google's bidding algorithm what return you want for every pound you spend on ads. A TROAS of 3 means you want £3 of reported revenue for every £1 spent. Google will automatically adjust your bids to try to hit that target.

Set it too low and you'll overspend relative to your margin. Set it too high and Google will restrict your ads to only the highest-intent searches, limiting your volume. The right number sits in a specific place — and it's almost never the number people first think of.

Why the obvious number is usually wrong

If your margin is 50%, you might think a TROAS of 2 is right — spend £1, get £2 back, break even on marketing. But that logic has three problems.

First, if your GA4 is recording revenue including VAT, the £2 Google reports contains 20% tax that was never yours to keep. Second, you need to account for carriage costs that come out of that revenue. Third, Google Ads suffers from diminishing returns — the last portion of your budget is always working harder than the average, so your target needs a buffer to stay profitable at the margin.

Enter your numbers below and the calculator will work through each of these adjustments.