Target ROAS (return on ad spend) is how much you have gained divided by how much you have spent. Ultimately, it is what value has been sold from a specific campaign. E.g. If this campaign has sold 3 products and each product is $100, then the value of each ad campaign for you is $300.
Campaigns are pay by click, which means that you pay based on clicks that customers have done on the ad. So you are “bidding” on them.
ROAS is a percentage. When you define a campaign, you set a target ROAS. If you had previous shopping campaigns, and have an idea what would be the most probable target ROAS, then you can put one. But if you don’t have anything, just leave it blank (Google tries to hit the highest ROAS by itself, then after 2 weeks you will figure out what is the potential ROAS for that particular campaign. Another suggestion is to use 200% which is the default. Just let it work and see what happens.
When the ROAS is too high, Google wants to sell it to people who they are 100% sure will buy it. Google wants to hit that high ROAS. When Google doesn't have that kind of audience available, it won't show that campaign to other people because it knows that it can’t achieve that high ROAS number, and therefore it won't serve your campaign.
The best suggestion in this case is to leave Target ROAS blank OR begin with something very normal like 200%, check again in 2 weeks and then increase it step by step. Otherwise, the engine will not use the learnings from previous days.
Best Practice Tips:
Leave the ROAS blank if you're not sure about it.
Create multiple campaigns when you have products with different target ROAS. Check this best practice article here for more info.
Here are some other tips to help you increase your Google Shopping Ad ROAS in our eCommerce Idea Guide.