Bidding on conversions treats all sales as equal. Bidding on value teaches the algorithm to look for people who spend more or leave more margin. The switch pays off when values are reliable and conversions genuinely vary, and it is risky when values are approximate or data is scarce.
The essentials in a definition
Value-based bidding is the strategy in which the platform optimises for the total value of conversions, not just their number. It makes sense when conversions have different values, as in e-commerce or in leads of differing worth. It requires the value to be sent reliably, for example through Smart Bidding and conversion management.
What changes when you bid on value
Instead of seeking the largest number of conversions at the set cost, the system seeks the highest total value within a target return. A 300-euro sale weighs more than a 30-euro one, and the algorithm adjusts bids accordingly.
In practice, campaigns invest more in searches, audiences and products that historically bring bigger purchases, even if there are fewer of them.
When it makes sense
When conversion values vary a lot, as in an e-commerce store with widely different prices, or in services with contracts of different sizes. Also when there is margin or customer-value data that can be linked to conversions.
If all conversions are worth roughly the same, bidding on value brings little gain and may only add volatility.
Steps to bid on value
- Validate conversion values (revenue or margin)
- Pick a realistic target return
- Migrate one campaign at a time
- Assess total margin after a few weeks
What to prepare
Correct, consistent values: revenue or, better, margin, with taxes and shipping handled coherently. A minimum number of conversions per period for the algorithm to learn. A clear target return based on real costs, not guesses.
For lead businesses, assign values by CRM stage (for example qualified, proposal, closed) rather than one value per form.
When every sale is worth the same, value adds nothing.
How to make the transition
Switch one campaign at a time and monitor for at least two to four weeks. Avoid changing budget, structure and objective at the same time, so you know what caused each effect. Compare total margin, not just the reported return.
If results worsen without explanation, check the value data first. In many cases the problem is not the algorithm but a badly assigned value.
Decision table
| Situation | Optimise for | Value to send |
|---|---|---|
| Shop with similar margins | Revenue (conversion value) | Order value excluding VAT |
| Shop with very different margins | Margin | Estimated gross profit per order |
| Leads with variable ticket size | Lead value | Average value per service type |
| Few conversions | Number of conversions | Not applicable yet |
Common mistakes to avoid
- Sending invented values. Values with no basis in real data lead the system to optimise for fiction.
- Including VAT or shipping inconsistently. Define the rule and always apply it.
- Switching strategy too early. With little data, value optimisation is unstable.
How to measure the result
Compare the conversion value sent with real invoiced value and effective margin, month by month. The difference should be small and stable; if it grows, correct the value calculation rule.
Limits and exceptions
Value-based bidding depends on reliable values and volume. If margins change a lot, if values sent are approximate or there are few conversions, optimisation may swing or favour the wrong products. In businesses with long cycles, value is only known late, and it pays to use conservative estimates and review. If you cannot ensure consistency, it is preferable to optimise for the number of qualified conversions and use value only for analysis, until you have enough data and processes.
Illustrative example
Illustrative example: a furniture shop has high- and low-margin products. Instead of sending order value, it sends an estimated margin by category. After a learning period, the platform gives more weight to orders that generate more profit, and the report shows a lower cost per euro of margin, even though order volume is similar.
Frequently asked questions
Do I need exact margin?
Not perfect accuracy, but coherent values. A reasonable margin estimate beats using revenue alone.
Can I use value in B2B?
Yes, by assigning values per funnel stage in the CRM.
How long does it take to learn?
Usually several weeks, depending on conversion volume.
When should I move from conversions to value?
When you have enough data, reliable values and real variation in value between conversions.
Do I need many conversions to bid on value?
Yes, the system needs enough data to learn; with few conversions, start by optimising for their number.
Value-based bidding optimises for the value of conversions, not their number; it only works if the value sent is reliable, consistent and tied to the business’s margin or profit.
Sources and recommended reading
- Google Ads Help: Smart Bidding
- Google Ads API: conversion management
- Google Ads Help: conversion measurement
Last editorial review: October 2026. Informational content; always confirm current conditions in the official sources before deciding.