Google Ads AI Essentials: Conversion Values Best Practises

Smart Bidding tailors your bids for each ad auction, using billions of combinations of signals to help you reach your marketing goals. It uses Google AI to place better bids in real-time. In this guide, we’ll talk about why you should measure conversion values and use a value-based Smart Bidding strategy to drive better results in Search campaigns.

Follow these best practises below to improve how you measure and optimise the real impact of your ad campaigns.

Improve how you measure and optimise your ad campaign’s real impact by assigning values to your conversions.

• Understand the total business value Google Ads generates beyond just counting conversions.
• Identify high-value conversions and use them to optimise your advertising strategy.
• Track your return on investment (ROI) better through the “Conversion value/cost” column. Utilise this data to pinpoint areas for budget and target adjustments.

Lay down a solid foundation for building and measuring data effectively. This will help you tap into the full potential of your first-party (1P) data by aligning with your business objectives. Here’s how:

• Check your tagging setup to ensure your Google tag or Google Tag Manager setup is capturing conversion actions such as online purchases or lead form submissions accurately across your website. This ensures that the 1P data used by Google’s AI-powered solutions is comprehensive and reliable.
• Connect additional 1P data sources with Google Ads Data Manager to access your data wherever it lives. This includes a range of technologies to both store and manage customer information, such as cloud data storage, CRMs, customer data platforms, or marketing technologies.
• Use enhanced conversions for durable, accurate measurement.
  
  • Enable enhanced conversions for web to supplement your existing conversion tags.
  • Make use of enhanced conversions for leads to share offline conversion data.
• Utilise data-driven attribution models for a more accurate distribution of value across your customers’ journey. This helps in understanding the true impact of each touchpoint on conversions.
• Select a single stage of your lead-to-sale funnel as your bid optimisation goal; choose a goal with a relatively short conversion delay and at least 15 monthly conversions.
• Track and upload conversions frequently, ideally on a daily basis, to ensure up-to-date data for optimisation.

To start sharing conversion value through your measurement setup, select the values that align best with your business objectives and internal resources:

Static values:

Opt to assign a single value for each conversion action. While this method is easier to set up, it may not fully capture the varying values of each transaction. However, using uniform conversion values can help differentiate between different conversion actions. You should be measuring at least 2 unique values across at least 2 different actions, and make sure neither are a value of zero.

Dynamic values:

Determine how each conversion is valued differently for your business. This approach provides a more accurate representation of transaction values. Transaction-specific conversion values are ideal if each sale holds a unique value for your business.

Utilise value-based Smart Bidding strategies with the conversion values you set up:

• Use maximise conversion value with a target return on ad spend (ROAS) so that bids are set to maximise conversion value, such as sales revenue or profit margins, while aiming to achieve your target ROAS.
• Use Maximise conversion value without a target, where bids for each auction are optimised to maximise conversion value within a set budget.

• Use conversion value rules: Apply multiplication factors to conversion values for specific customer types, devices, or locations to optimise for higher value actions.
• Utilise new customer acquisition goals: Efficiently acquire new customers through your Google Ads campaigns by setting up goals tailored to new customer acquisition.
• Evaluate performance with bid strategy reports: Utilise the bid strategy report to assess performance over time and gain insights into how well your bidding strategies align with your conversion value objectives.