GMV, ROAS, and Autobid

What is GMV?

GMV is the Gross Merchandise Value that can be associated with an ad interaction over time. Put another way, it is the revenue an advertiser makes from selling products due to a Kevel event (impression, click, conversion, etc.). Kevel gives you the flexibility to decide how you want to attribute GMV to your ad campaigns. To put more context behind it, you may have heard GMV called ad revenue, conversion value, transaction value, etc.

How do I start tracking GMV?

GMV can be tracked on impressions, clicks, conversions, and custom events. Once you’ve decided on the event that you want to attribute GMV to, you will need to append the query parameter gmv to the event tracking URL from the Decision API response (the URL associated with the event id) with the event’s GMV as the value. For example, ?gmv=1.64 sets a GMV of $1.64 for the event.

The GMV will then be recorded in the data shipping logs for that event. GMV will also be returned via the Real Time Reporting API and in reports.

What is ROAS?

ROAS is one way advertisers measure the efficacy of their ad campaigns. The formula for ROAS = (Gross Merchandise Value / Revenue)*100. For example, if an advertiser spent $1,000 in advertising spend (represented by Revenue in the Kevel) to promote the purchase of an item, and at the end of the campaign the gross merchandise value that can be attributed back to ad spend is $5,000, ROAS would simply be represented as ($5,000 / $1,000)*100 = 500%. This can be interpreted as for every $1 of ad spend, your advertiser earned $5.

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 and GMV are essential for e-Commerce and Retail Media use cases where an advertiser is using advertising to directly influence a conversion/purchase/transaction. Kevel’s Revenue metric tracks how much the advertiser has spent in a particular flight, GMV helps the advertiser understand the ad revenue attributed to the ads in the flight, and ROAS quantifies the impact of advertising into a standard metric that is comparable across platforms.

Although typically associated with e-Commerce and Retail, tracking ROAS and GMV are both applicable to any use case where the value of a conversion is tracked. For example, for B2B customers an advertiser may be running ads to promote event registrations. If the advertiser spent $50,000 in advertising and total event registrations brought in $100,000 in GMV, ROAS for promoting the event would equal 200%.

What is Autobid?

Autobid is Kevel’s automated bidding strategy that takes into account ROAS goals when deciding on CPC bids. Advertisers set a budget, max CPC, and target ROAS goal, Kevel’s ad server will then adjust CPC bids to optimize to the ROAS goal. When a ROAS target is configured on a flight, the ads’ maximum bids are automatically adjusted such that the advertiser bids higher to capture more impressions at times when GMV is higher, and bids lower to capture fewer impressions when the GMV is lower. The target ROAS is a benchmark to measure performance against.

Is my target ROAS goal guaranteed with Autobid?

The target ROAS goal is a benchmark and not a guarantee.

Depending on the available inventory and the distribution of competing bids it may not be possible to achieve the target ROAS, but spend will still be optimized within these constraints. In other words, ads may not hit the ROAS target, but will still provide value to the advertiser by allocating impressions so as to get as close to the target as possible.

Are there any prerequisites to using Autobid?

Autobid is not enabled by default, please reach out to your Sales contact, CSM, or [email protected] to enable this bidding strategy.

Also, 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 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.

What’s Next?

Upcoming work will enable ROAS targeting / bidding, if this is something you’re interested in, reach out to your Customer Success Manager or [email protected] to let us know.