GMV, ROAS, and Autobid

What is GMV?

GMV (Gross Merchandise Value) is the total revenue generated by an advertiser from selling products attributed to ad interactions, such as impressions, clicks, or conversions, over a period of time. With Kevel, you have the flexibility to choose how you want to attribute GMV to your ad campaigns. GMV is often referred to as ad revenue, conversion value, transaction value, or similar terms.

How do I start tracking GMV?

You can track GMV on impressions, clicks, conversions, and custom events. To attribute GMV to a specific event, you need to append the query parameter gmv to the event tracking URL retrieved from the Decision API response. The value of the gmv parameter should be set as the GMV for that event. For example, adding &gmv=1.64 to the URL sets the GMV as $1.64 for the event. For more details, see this section on modifying revenue.

The recorded GMV will be included in the data shipping logs for that event, allowing you to track and analyze it. Additionally, GMV information will be accessible through the Real-Time Reporting API and in reports, providing you with comprehensive visibility into your GMV metrics.

What is ROAS?

ROAS (Return on Advertising Spend) is a metric used by advertisers to evaluate the effectiveness of their ad campaigns. It is calculated using the formula: ROAS = (Gross Merchandise Value / Advertising Spend) * 100.

To illustrate, let's consider an example: If an advertiser invested $1,000 in advertising spend (represented as Revenue in Kevel) to promote the purchase of a product, and the resulting gross merchandise value attributed to that ad spend amounts to $5,000, the ROAS would be calculated as ($5,000 / $1,000) * 100 = 500%.

ROAS provides insights into the revenue generated relative to the advertising investment and serves as a measure of campaign profitability.

How do I start tracking ROAS?

Since ROAS is a function of GMV/Revenue, as long as you are tracking both GMV and Revenue in Kevel you will see ROAS populate for Real-Time Reporting and Scheduled Reporting as well as within the Kevel UI on the Campaigns, Flights, Ads, and Advertisers screens.

Is this right for my use case?

Tracking ROAS (Return on Advertising Spend) and GMV (Gross Merchandise Value) is crucial for e-commerce and retail media use cases, where advertisers aim to directly influence conversions, purchases, or transactions. In Kevel, the Revenue metric tracks the advertiser's advertising expenses within a specific flight, while GMV helps assess the ad revenue attributed to the ads in that flight. ROAS provides a standardized metric to quantify the impact of advertising and allows for easy comparison across platforms.

Although ROAS and GMV are commonly associated with e-commerce and retail, they are applicable to any use case where the value of a conversion is tracked. For example, in a B2B scenario, an advertiser may run ads to promote event registrations. If the advertiser spends $50,000 on advertising and the total GMV from event registrations amounts to $100,000, the ROAS for promoting the event would be 200%.

Tracking ROAS and GMV provides valuable insights into the effectiveness and profitability of advertising efforts, regardless of the specific use case.

What is Autobid?

Autobid is Kevel's advanced automated bidding strategy for achieving your ROAS goals.

Set your budget, maximum CPC/CPA, and target ROAS. Autobid takes it from there, optimizing your bids to reach your targeted ROAS goals.

Autobid dynamically adjusts bids based on GMV, capturing more impressions during high-value periods and reducing bids during low-value periods.

Autobid settings can be accessed under the flight settings in the UI or via the Management API.

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Setting up Autobid via the API

To activate Autobid for a flight via the API, you will need to include the parameter TargetROAS with a float data type for the value. When a targeted ROAS goal is included the decision engine will automatically adjust the CPC bid to try to achieve the goal set. Acceptable values are expressed as a decimal between 0.01–99.99. This is equivalent to 1%–9,999%.

The value entered for the parameter Price will act as the maximum CPC bid.

During burn-in, the bid price starts out low to optimise the ROAS. This is done as there is usually a lag between clicks and conversions at the beginning that can result in delayed GMV data. It can also be more difficult to catch up with ROAS target at a later stage as lower bids may cause the ads to win fewer auctions.

Is my target ROAS goal guaranteed with Autobid?

Please note that the target ROAS goal serves as a benchmark and should not be considered a guarantee.

Achieving the target ROAS depends on factors such as available inventory and the distribution of competing bids. In some cases, it may not be feasible to reach the exact target ROAS. However, rest assured that our system will optimize your spend within these limitations. This means that while your ads may not hit the ROAS target precisely, they will still deliver value by allocating impressions in a way that gets as close to the target as possible. Our goal is to maximize the effectiveness of your ad campaigns while working within the constraints of the advertising ecosystem.

Are there any prerequisites to using Autobid?

Since ROAS is calculated based on GMV / Revenue, please be sure you are tracking both values for the flights you would like to use Autobid with. For more information on tracking values, please visit our associated documentation.

Are there any recommendations for what the target ROAS goal should be?

This can vary greatly across customers, advertisers, and items promoted. Please reach out to your Kevel contact to discuss best practices that fit your business needs. Generally though, if this is your first time tracking ROAS for your advertisers, Kevel recommends starting with a CPC/CPA bid strategy to track average expected ROAS for your advertiser first. Once you have an idea of average ROAS for the advertiser and the product category, you can make a more informed decision as to what to set as your target ROAS goal.