How to Calculate Conversion Value in Google Ads: What Does it Mean?

  • 8 mins read
  • By Darian Cordes
  • April 17, 2024

Do you know what the “conversion value” is in Google Ads? Are you curious to find out how it can be calculated? Then this post is for you.

It will give you a detailed explanation about it, how you can use the conversion to measure the success of the ad campaigns, and how it can enable you to optimize and maximize the ad campaigns to get much better results.

So, are you all ready to dive in? Let’s begin!

Conversion Value in Google Ads: An Overview

The conversion value is an important metric for all the businesses that use Google Ads to calculate the effectiveness of their PPC (Pay-per-click) ad campaigns. It’s also known as the monetary value linked with the website action, such as a “lead” or “sale.”

But remember, all conversions do not have the same weight. Let’s take two consumers into account:

  • Consumer #1: Clicks on Google Ads but leaves your website quickly without further engagement.
  • Consumer #2: Clicks on the Google Ads, visits the landing page, moves forward, clicks on the “Purchase Now” option, and completes the buying process successfully.

Here, you can see that the conversion value associated with the 2nd consumer surpasses that of the 1st consumer.

By providing a way to calculate the worth of all the conversions, the conversion value metric assists businesses in detecting where they must prioritize their efforts and assign the resources for advertising effectively.

Calculating the Conversion Value in Google Ads: How to Do It?

Defining the conversion value of Google Ads is extremely important for campaign optimization. You can also use the “conversion value calculator,” which will help facilitate the determination of the optimal bids for all conversions.

You can also create rules that automatically allocate the values to completed actions. This can simplify the analysis and result-tracking work.

The Importance of Conversion Value in Google Ads

The conversion value stands out as a crucial metric for all businesses because it can help them track, understand, and provide insight into the value of every conversion.

Once you know the value of the conversions, it will enable the advertisers to make correct decisions on how to optimize the ad campaigns and allocate the budget for a maximum “return on investment” (ROI).

You can also obtain more insights on Google Ads through the attribution models and learn how your ad budget is used and which activities offer the highest value.

By using and understanding the conversion value, you can ensure the ad campaigns are working as expected.

Conversion Value vs Conversion: The Difference

You might think that “conversion” and “conversion value” are the same. But honestly, they are not!

A conversion is an action that you ask the ad platform to track down. The conversion actions can range from the ones that are on the “journey to profit” (making a call, downloading the guide, etc.) to the “completed sale.”

Conversely, conversion values are the monetary amount that an advertiser tells the ad platform to feature in the completed action. Having trouble understanding this? Here is a small example:

“Let’s say you have set up the conversion action to track down all the phone calls restricted by Google Ads. Google will then track down all of them until you change the action into a “primary action.”

Whether or not it values the calls at $10 or $100 will depend entirely on you adding the conversion value into action.

In simple words, you can easily track down the conversions in the conversions in Google Ads without the conversion values. However, you might make data weaknesses for internal reporting and the ad platform.

How to Set Up the Conversion Values?

Assigning the conversion value in Google Ads means letting Google know about the monetary worth of every conversion to the business. This will help you understand the effectiveness of the ads and let you decide where to allocate the ad budget.

But when it comes to setting up the conversion values, you should follow the steps mentioned below:

  • Step 1: Access the Google Ads account to manage and create the ad campaigns, which includes setting up various conversion actions.
  • Step 2: When making the conversion action, go to the “Value” category
  • Step 3: Pick between dynamic conversion value or static conversion value
  • Step 4: Provide the value and then choose the preferred currency
  • Step 5: Insert or update the tag in the website’s code. Doing so will enable the conversion track to get all the details about every sale. The conversion track will send back this information to Google Ads.

Small Note: If you don’t have much experience with coding, it will be much better to take the help of a web developer for a proper setup.

Final Thoughts

The conversion value in Google Ads stands out as the metric that divides profit from loss. This metric can also help analyze the performance of the ad campaigns and optimize the actual business impact of these ad campaigns.

Using the conversion value, you can properly track the ROI and get insights on the ad campaigns that provide a much higher return.

We certainly hope you have gained a good amount of knowledge about the conversion value and how to calculate it. Thank you for reading!

Darian Cordes
CEO of Ecomparkour
As an eCommerce Solutions Provider and Facebook Ad compliance expert, I’m driving success at Ecom Parkour by ensuring that advertising efforts are both impactful and compliant.
Table Of Content
By Darian Cordes
8 mins read

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How to Calculate Conversion Value in Google Ads: What Does it Mean?

  • April 17, 2024

Do you know what the “conversion value” is in Google Ads? Are you curious to find out how it can be calculated? Then this post is for you.

It will give you a detailed explanation about it, how you can use the conversion to measure the success of the ad campaigns, and how it can enable you to optimize and maximize the ad campaigns to get much better results.

So, are you all ready to dive in? Let’s begin!

Conversion Value in Google Ads: An Overview

The conversion value is an important metric for all the businesses that use Google Ads to calculate the effectiveness of their PPC (Pay-per-click) ad campaigns. It’s also known as the monetary value linked with the website action, such as a “lead” or “sale.”

But remember, all conversions do not have the same weight. Let’s take two consumers into account:

  • Consumer #1: Clicks on Google Ads but leaves your website quickly without further engagement.
  • Consumer #2: Clicks on the Google Ads, visits the landing page, moves forward, clicks on the “Purchase Now” option, and completes the buying process successfully.

Here, you can see that the conversion value associated with the 2nd consumer surpasses that of the 1st consumer.

By providing a way to calculate the worth of all the conversions, the conversion value metric assists businesses in detecting where they must prioritize their efforts and assign the resources for advertising effectively.

Calculating the Conversion Value in Google Ads: How to Do It?

Defining the conversion value of Google Ads is extremely important for campaign optimization. You can also use the “conversion value calculator,” which will help facilitate the determination of the optimal bids for all conversions.

You can also create rules that automatically allocate the values to completed actions. This can simplify the analysis and result-tracking work.

The Importance of Conversion Value in Google Ads

The conversion value stands out as a crucial metric for all businesses because it can help them track, understand, and provide insight into the value of every conversion.

Once you know the value of the conversions, it will enable the advertisers to make correct decisions on how to optimize the ad campaigns and allocate the budget for a maximum “return on investment” (ROI).

You can also obtain more insights on Google Ads through the attribution models and learn how your ad budget is used and which activities offer the highest value.

By using and understanding the conversion value, you can ensure the ad campaigns are working as expected.

Conversion Value vs Conversion: The Difference

You might think that “conversion” and “conversion value” are the same. But honestly, they are not!

A conversion is an action that you ask the ad platform to track down. The conversion actions can range from the ones that are on the “journey to profit” (making a call, downloading the guide, etc.) to the “completed sale.”

Conversely, conversion values are the monetary amount that an advertiser tells the ad platform to feature in the completed action. Having trouble understanding this? Here is a small example:

“Let’s say you have set up the conversion action to track down all the phone calls restricted by Google Ads. Google will then track down all of them until you change the action into a “primary action.”

Whether or not it values the calls at $10 or $100 will depend entirely on you adding the conversion value into action.

In simple words, you can easily track down the conversions in the conversions in Google Ads without the conversion values. However, you might make data weaknesses for internal reporting and the ad platform.

How to Set Up the Conversion Values?

Assigning the conversion value in Google Ads means letting Google know about the monetary worth of every conversion to the business. This will help you understand the effectiveness of the ads and let you decide where to allocate the ad budget.

But when it comes to setting up the conversion values, you should follow the steps mentioned below:

  • Step 1: Access the Google Ads account to manage and create the ad campaigns, which includes setting up various conversion actions.
  • Step 2: When making the conversion action, go to the “Value” category
  • Step 3: Pick between dynamic conversion value or static conversion value
  • Step 4: Provide the value and then choose the preferred currency
  • Step 5: Insert or update the tag in the website’s code. Doing so will enable the conversion track to get all the details about every sale. The conversion track will send back this information to Google Ads.

Small Note: If you don’t have much experience with coding, it will be much better to take the help of a web developer for a proper setup.

Final Thoughts

The conversion value in Google Ads stands out as the metric that divides profit from loss. This metric can also help analyze the performance of the ad campaigns and optimize the actual business impact of these ad campaigns.

Using the conversion value, you can properly track the ROI and get insights on the ad campaigns that provide a much higher return.

We certainly hope you have gained a good amount of knowledge about the conversion value and how to calculate it. Thank you for reading!

ecomparkour
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Phone: +852 5362 7682
Email: hongkong@ecomparkour.com

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