Manual Bidding vs. "AI-Driven" Target ROAS: How Samsung Achieved 43% Higher ROI with Google Ads

In the ever-evolving world of digital advertising, achieving a high Return on Investment (ROI) is the ultimate goal for marketers. With platforms like Google Ads offering advanced tools and strategies, businesses have the opportunity to optimize their ad spend and maximize returns. One standout example of this is Samsung Electronics, which successfully leveraged Google Ads’ Target ROAS (Return on Ad Spend) strategy to significantly boost sales for its Galaxy Z Flip 4 and Fold 4. This case study not only highlights the power of AI-driven bidding but also serves as a benchmark for other businesses aiming to enhance their digital advertising performance.

Samsung’s experiment with Target ROAS yielded impressive results: a 49% higher conversion value, a 43% increase in ROAS, and a 28% improvement in conversion rates. These outcomes underscore the effectiveness of Google’s AI-powered Smart Bidding in optimizing ad spend and driving sales. In this article, we’ll delve into the details of Samsung’s strategy, explore the benefits of Target ROAS, and provide actionable insights for businesses looking to replicate this success.

I. Understanding Target ROAS and Its Benefits

A. What is Target ROAS?

Target ROAS is a Smart Bidding strategy in Google Advertising that allows advertisers to set a specific return on ad spend goal. Unlike traditional bidding methods like Enhanced CPC (Cost Per Click), which focus on maximizing clicks or conversions, Target ROAS uses AI to predict the likelihood of a conversion and its potential value. Based on this prediction, the system automatically adjusts bids in real-time to maximize the return on ad spend.

B. The Role of AI in Smart Bidding

Google’s AI technology plays a pivotal role in Target ROAS. By analyzing vast amounts of data, including user behavior, search intent, and historical performance, the AI can accurately predict which searches are most likely to result in high-value conversions. This enables the system to allocate budget more efficiently, ensuring that Google Ads are shown to the right audience at the right time.

C. Advantages of Target ROAS

Target ROAS offers several significant advantages for businesses leveraging Google Advertising. First, it focuses on the expected value of conversions, directing ad spend towards high-value customers. This results in a higher overall return on ad spend (ROAS) on Google Ads, enhancing the conversion value. Second, by automating the bidding process, it streamlines operations. This reduces the need for manual adjustments, saving both time and minimizing the risk of human error, thereby improving efficiency. Finally, Target ROAS is highly scalable. It’s especially effective for businesses with large product catalogs or complex customer journeys, as it can simultaneously manage multiple variables, enabling seamless operation across diverse business landscapes.

II. Samsung’s Strategy: A Deep Dive

A. Background and Objectives

Samsung Electronics aimed to maximize sales of its newly launched Galaxy Z Flip 4 and Fold 4 on its own e-commerce platform, Samsung.com. The company’s e-Store Group sought to achieve higher online sales while maintaining a certain level of ROAS efficiency. To test the effectiveness of Target ROAS, Samsung conducted a five-week experiment comparing it with the Enhanced CPC strategy it had previously used.

B. Experimental Approach

Samsung ran two parallel campaigns: one using Enhanced CPC and the other using Target ROAS. The Enhanced CPC campaign relied on manual bidding, while the Target ROAS campaign leveraged Google’s AI to automatically adjust bids based on the predicted conversion value. Both campaigns were optimized for online sales on Samsung.com.

C. Results

The Target ROAS campaign outperformed the Enhanced CPC campaign across all crucial metrics. It generated 49% higher conversion value, leading to significantly more revenue from conversions. The return on ad spend for the Target ROAS campaign was 43% higher—almost 50% above that of the Enhanced CPC campaign—demonstrating a far more efficient use of the advertising budget. Additionally, the Google Ads Target ROAS campaign improved the conversion rate by 28%. This led to more conversions, further contributing to overall sales growth.

D. Key Takeaways

Samsung’s success with Target ROAS highlights the importance of leveraging AI-driven bidding strategies. By automating the bidding process and focusing on conversion value, businesses can achieve higher returns with the same ad spend. This is particularly relevant for Direct-to-Consumer (D2C) models, where maximizing sales on owned platforms is critical.

III. Lessons for Businesses

A. Adopting Target ROAS

To implement Target ROAS effectively within Google Advertising, you first need a clear understanding of your business goals and conversion values. Start by setting realistic ROAS targets. Use historical data from Google Ads to determine a goal that aligns with your business objectives. Next, optimize conversion tracking. Make sure it’s accurate and captures all relevant data, including offline conversions. This ensures that Target ROAS operates with comprehensive information. Although Target ROAS is an automated system, it’s crucial to monitor its performance. Regularly assess how well the campaign is performing and make adjustments as required. This combination of proper setup, accurate data collection, and ongoing monitoring enables successful implementation of Target ROAS.

B. Direct-to-Consumer (D2C) Strategy

Samsung’s success underscores the benefits of a D2C strategy, where brands sell directly to consumers without intermediaries. By leveraging Target ROAS, D2C brands can maximize sales on their own platforms while maintaining control over the customer experience. Examples of brands successfully using D2C and Google Ads include Carwow and Nestlé, both of which have seen significant growth through data-driven strategies.

C. Importance of First-Party Data

First-party data is critical for optimizing Target ROAS campaigns. By using data from your own interactions with customers, you can improve conversion tracking and bidding accuracy. Carwow’s Enhanced Conversions for Leads (ECL) strategy is a prime example of how first-party data can be used to enhance measurement and drive growth.

For instance, Topkee’s TTO tools can help businesses optimize their ad delivery by reducing unnecessary impressions and focusing on high-value conversions, thereby minimizing energy consumption. By leveraging advanced Topkee’s tools like TTO and TM, brands able to segment users based on their behaviors and preferences, delivering personalized remarketing campaigns that have increased conversion rates by over 70%.

IV. Broader Applications and Industry Insights

A. Beyond Retail: Automotive and FMCG Sectors

The lessons from Samsung’s strategy are not limited to retail. In the automotive sector, Carwow has successfully used data-driven strategies to navigate complex customer journeys and drive growth. Similarly, Nestlé has leveraged first-party data and privacy-preserving technologies to enhance its global marketing strategy.

B. Sustainability in Digital Advertising

As sustainability becomes a growing concern, businesses are also looking for ways to reduce their carbon footprint in digital advertising. Google’s Sustainability Marketing Playbook provides valuable insights into how marketers can align their campaigns with sustainability goals while maintaining ROI.

For instance, Topkee’s comprehensive website assessment and analysis tools can help identify key performance metrics and optimize conversion tracking. Accurate data collection, including offline conversions, is essential for Target ROAS to operate with precision. Regularly evaluate campaign performance using Topkee’s advertising report analysis, which provides insights into budget control, click-through rates, and conversion quality. Topkee’s keyword research tools also play a vital role, identifying core keywords and integrating smart bidding strategies to improve ad relevance and reach.

Conclusion

Samsung’s success with Target ROAS demonstrates the power of AI-driven bidding strategies in maximizing ROI. By automating the bidding process and focusing on conversion value, businesses can achieve higher returns with the same ad spend. Additionally, the importance of first-party data and D2C strategies cannot be overstated. As the digital advertising landscape continues to evolve, businesses that embrace these trends will be well-positioned for long-term success.

If you’re looking to enhance your Google Ads performance, consider experimenting with Target ROAS and exploring Google’s advanced features. For personalized guidance, don’t hesitate to reach out to a professional consultant.

Appendix

1. Enhanced Conversions for Leads (ECL)
2. Google’s Sustainability Marketing Playbook
3. Nestlé’s Global Marketing Strategy