How to Set Up Conversion Value Tracking for Value-Based Bidding

Why Conversion Value Changes Everything

Most Google Ads accounts track conversions as equal units — a 50 order and a 5,000 order both count as "1 conversion." When Smart Bidding sees only that, it optimises for conversion count, not conversion value.

Conversion value tracking solves this. It tells Google how much each conversion is actually worth, enabling Target ROAS bidding that explicitly optimises for revenue.

Two Approaches to Conversion Values

1. Fixed Conversion Values

You assign a static value to each conversion action. Every form submission is worth 200, every purchase is worth 150, and so on.

When to use: Lead generation businesses where you know your average deal value and close rate. Calculate as: Average Deal Value multiplied by Close Rate equals Conversion Value.

Example: Average deal equals 5,000. Close rate on leads equals 4 percent. Conversion value equals 5,000 times 0.04 equals 200 per lead.

2. Dynamic Conversion Values

You pass the actual transaction value to Google Ads with each conversion. Different purchases have different values based on what was bought.

When to use: Ecommerce businesses where every order has a specific value. This is the gold standard — it is the most accurate data Google can receive.

Setting Up Fixed Conversion Values

1. In Google Ads: Tools and Settings then Conversions then select the conversion action
2. Click Value in the conversion action settings
3. Select "Use the same value for each conversion"
4. Enter your calculated value
5. Select your currency and save

Review and update this value every quarter as your close rate or average deal value changes. Stale conversion values cause Smart Bidding to use incorrect signals.

Setting Up Dynamic Conversion Values for Ecommerce

Dynamic values require passing the transaction total from your website to Google Ads at the time of conversion.

Via Google Tag Manager

Ensure your checkout confirmation page fires a purchase event to the data layer including the order value:

dataLayer.push({
  event: "purchase",
  ecommerce: {
    transaction_id: "ORDER-12345",
    value: 149.99,
    currency: "GBP",
    items: []
  }
});

1. In GTM, create a Data Layer Variable for ecommerce.value
2. In your Google Ads Conversion Tracking tag, set Conversion Value to your new variable instead of a fixed number
3. Set Currency Code to a variable reading ecommerce.currency
4. Test in GTM Preview Mode — confirm the conversion tag fires with the correct dynamic value
5. Publish

Enabling Target ROAS Bidding

Once conversion values are flowing correctly:

1. Your campaign needs at least 15 to 50 conversions in the past 30 days with values before Target ROAS becomes available
2. In campaign settings: Bidding then Change bid strategy then Target ROAS
3. Set your ROAS target (e.g. 400% means 4 revenue for every 1 spent)
4. Google automatically adjusts bids up for high-value opportunities and down for low-value ones

Setting the right ROAS target: Start with your historical actual ROAS from the past 90 days. Do not set it higher than achievable — Smart Bidding will under-serve your ads trying to meet an impossible target.

Conversion Value Rules

Google Ads has a feature called Conversion Value Rules that lets you adjust conversion values based on audience segments, geography, or device. This is powerful for businesses where certain segments are more valuable.

Example rules:

• Multiply conversion value by 1.5 for users in your top-performing city
• Multiply by 0.8 for mobile conversions if mobile users have lower lifetime value
• Multiply by 2 for users in your high-value customer audience list

Set these up in Tools and Settings then Conversions then Conversion Value Rules.

Reporting on Conversion Value

Key columns to add to your campaigns view:

• Conv. value: total conversion value
• Conv. value / cost: your actual ROAS
• Conv. value / conv.: average conversion value

Sort by Conv. value divided by cost to find your best-performing campaigns by ROAS, not just CPA.

Common Mistakes

• Fixed value based on list price, not average order value: use real average transaction data from your analytics
• Including tax and shipping in value: use revenue only (pre-tax, pre-shipping) for a clean comparison
• Not updating fixed values as business changes: if your close rate improves, your lead value changes. Update the conversion value.
• Setting ROAS target too high too fast: Smart Bidding needs room to find volume. Start conservative.

Summary

Conversion value tracking is the bridge between Google Ads activity and real business outcomes. Without it, Smart Bidding treats a small sale and a large sale the same. With it, every bid decision becomes a revenue decision.

Need help setting up conversion value tracking for your account? Adslytics configures accurate measurement for data-driven Google Ads campaigns.