Why Google's Bid Simulator is the WORST GAMBLE you shouldn’t take.

Imagine you are sitting at a Vegas roulette table and Google, of all people, happens to be your wing-man. Oh boy!

The dealer spins the wheel, and Google whispers in your ear, “Put it all on red—it’s the safe bet.” You hesitate, but the numbers look good, the logic seems sound, and you’re tempted to trust the “expert.” The wheel slows down… and lands on black.

Welcome to Google’s Bid Simulator: A game that rarely ever plays in your favor.

Google's gamble ??

Google would like you to believe their Bid Simulator is a fortune teller for your ads’ performance. Input a new ROAS or budget target, and it spits out projections on cost and conversion value. The problem? It’s not a crystal ball—it’s a mirror.

The simulator bases its projections on data from the past seven days, assuming the same trends will carry into the future.

This “snapshot approach” fails to account for shifting market dynamics, seasonality, or competitor activity. The margin of error can swing ±26%, with deviations as high as ±50%.

That’s the precision of a coin toss.

What Google gets horribly wrong

1. Short-term thinking Google’s recommendations focus on immediate gains, like increasing conversions or ad clicks, rather than building long-term profitability.
2. Siloed campaign focus Recommendations treat campaigns in isolation, ignoring the interplay between them. This leads to inefficient allocation, where one campaign overspends while another underperforms.
3. No strategic layer Google’s algorithms don’t know your profit margins, inventory levels, or strategic priorities. They rely solely on historical performance, which is not enough to steer toward future success.

A smarter way to steer budgets

Instead of gambling on Google’s advice, build a strategy rooted in clear metrics and strategic adjustments.

Here’s how to regain control:

?? Use Theoretical Revenue to guide decisions

Rather than taking Google’s word for it, you should calculate your own high-level benchmark to guide your critical marketing decisions.

Daily Budget × Target ROAS = Theoretical Revenue

This simple formula gives you a directional indicator of whether your campaigns are aligning with your profitability goals:

• If your daily budget is €800 and your target ROAS is 4, then your Theoretical Revenue should be €3,200.
• If actual revenue is falling short, you now know for sure you need to adjust either your budget, ROAS targets, or both.

This way, you’re tying ad spend directly to profitability, not just efficiency metrics like clicks or impressions.

?? Segment campaigns by strategic importance

Rather than treating all campaigns equally, allocate budgets based on what drives the most value:

• High-priority campaigns (e.g., high-margin or seasonal products): Assign budgets and aggressive ROAS targets to maximize steady returns.
• Mid-priority campaigns (e.g., products with steady demand or moderate margins): Adjust budgets dynamically to maintain balance, prioritizing campaigns that show room for growth.
• Low-priority campaigns (e.g., niche or lower-margin products): Evaluate these regularly and reallocate budgets where gradual improvements are minimal.

For instance, if your original budget allocation was 40%-30%-30% for your high-, mid- and low-campaigns:

• You might want to increase your low-priority campaign’s budget if its revenue growth potential rises during peak periods (e.g., seasonal demand).
• Adjust your mid-priority campaign’s budget upward if it shows stronger than usual performance.
• Reduce your high-priority campaign’s budget if its conversion volume begins to plateau.

?? Adjust your budgets & ROAS targets gradually

Avoid major swings in your budget or ROAS targets. Instead:

• Gradually adjust budgets by 5–10% and monitor performance.
• Slowly raise or lower ROAS targets to test how it affects conversions and revenue.

This step-by-step approach helps you fine-tune performance without destabilizing campaigns or wasting ad spend.

?? Think beyond ROAS

ROAS is one of the most important levers to steer your campaigns, but it doesn’t tell you the whole story. You are smart to align your campaigns with broader goals, like:

• New customer acquisition: Use data to identify which products or campaigns attract first-time buyers.
• High-profit products: Shift budgets toward products with high margins, even if they generate fewer sales.

For example:

• If a product with a 4x ROAS generates €1,600 in revenue on a €400 budget but has a 50% profit margin, you’re netting €800 profit.
• Compare that to a product with a 5x ROAS but only a 20% margin—netting just €640 profit on €320 ad spend. Profit beats ROAS every time!

Your winning hand:

Google’s budget tools aren’t your strategic partner—they’re a blunt instrument. To take control of your campaigns, remember these key principles:

Calculate Theoretical Revenue: Let your numbers, not Google’s guesses, guide your budget.

1. Segment campaigns strategically: Prioritize high-margin or high-potential campaigns.
2. Adjust gradually: Make small, data-driven changes rather than overhauling your strategy.
3. Focus on profit, not just ROAS: Measure success by what helps your business grow sustainably.
4. Simplify the complexity: All this tinkering, rebalancing, and oversight can be time-consuming and resource-intensive. Our software automates these strategies—dynamic budgets, segmentation, and all—so you can focus on results, not headaches.

Put the odds back in your favor ??

Google’s budget recommendations are a gamble your business doesn’t need to take.?

By focusing on clear metrics, gradual adjustments, and profit-driven strategies, you can steer your campaigns toward long-term success—without playing by Google’s rules.

If all this sounds a bit overwhelming–it is. Lucky for you, we can give you a helping hand!

Get in touch with us today and we are happy to help you create a smarter strategy that puts your business in the driver’s seat. ??

?? LET'S TALK!

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