Accurate conversion tracking is crucial not only to monitor your campaigns and assess their performance, but to make informed decisions on fruitful optimizations and prudent investments. Whilst the ‘conversion volume’ metric provides an idea of how successful a campaign has been, it provides little insight into the financial return for the advertiser.
By assigning a conversion value, we can indicate to Google how much a specific conversion is worth to us as a business, allowing campaigns to be optimized towards tangible, financial metrics such as return on ad spend or total conversion value.
For some advertisers and business models, assigning a conversion value is simple; for example, an ebook download may cost £5, making £5 our conversion value. Where this gets trickier is for non-retail businesses, such as estate agents, recruiters, or financial services, where there isn’t an obvious ‘ticket price’ against the products or services available.
Depending on your objectives and business model, there are a few ways to approach conversion value:
The ‘Clean Cut’ approach. This model is especially straightforward for retail businesses; simply assign the product retail price as the value. For engine reporting which is closer to business MI, consider your overheads when assigning a conversion value. Using this method, the assigned conversion value will be more akin to profit than revenue, allowing quick and easy analysis as to how much money your campaigns have earned for your business.
The ‘Guesstimate’ approach. For actions without an obvious value, this can be calculated based on historical data and what you know to be true about your business and customers. For example, if as a recruiter you know you’re ten times more likely to successfully place a candidate if they have uploaded their CV to your website, then you can assign a ‘finger in the air’ value that translates future potential revenues from completing that action.
The ‘Hierarchy’ approach. If you find it impossible to assign a conversion value to your online actions, this field can be used instead to indicate to the engine which conversions are most important and which are least valuable. Conversions could be considered ‘valuable’ if they drive revenue, or drive further desired actions. For example: Let’s say that on your website, users can download a brochure, watch a video, or fill out a contact form. The contact form is your most valuable conversion, as it puts you in touch with a potential customer, and a brochure download usually results in a phone call. A video view is beneficial (as it indicates engagement), however, it might not play such a large role in the overall customer journey. Given this information, you might want to assign staggered conversion values as follows:
- Contact Form Completion = £50 conversion value
- Brochure Download = £30 conversion value
- Video View = £5 conversion value
Where the ‘Clean Cut’ approach is possible, advertisers can benefit from smarter bid strategies, and accurately measure revenues and ROAS. Whilst ROAS and revenue data from the ‘Guesstimate’ or ‘Hierarchy’ approaches might not be entirely accurate, the assigned conversion value will still indicate a level of importance to the engine. Within value-based bid strategies, this will lead the engine to aim for ‘high value’ conversions or a high volume of lower value conversions which is a lot more strategic than optimizing for conversion volume whilst disregarding the nature of the conversion and it’s associated value to your business.
How to assign a conversion value:
- Navigate to the conversion action you’d like to update
- Under ‘Details’, click ‘Edit settings’
- You’ll see a field for ‘Value’ within the settings. Enter a financial amount within this field
- Save your changes
Screenshot from Google Ads, March 2023
Whatever the structure or model of your business, some conversions will be more valuable than others, and it’s vital for campaign success that these variations are recognized, especially within automated functions.
