Last week, we tackled setting your data strategy for value-based bidding.
The next key is to assign the right values for the conversion actions that are important to your business.
We know this step is often seen as trickier for lead gen-focused businesses than, say, ecommerce businesses.
How much is a whitepaper download, newsletter signup, or online quote request worth to your business? While you may not have exact figures, that’s OK. What you do know is they aren’t all valued equally.
Check out the quick 2-minute video in our series below, and then keep reading as we dive deeper into assigning conversion values to optimize your value-based bidding strategy.
Understanding Conversion Values
First, let’s get on the same page about what “conversion value” means.
A conversion refers to a desired action taken by a user, such as filling out a lead form, making a purchase, or signing up for a newsletter.
Conversion value is simply a numerical representation of how much each of these conversions is worth to your business.
Estimating The Value Of Each Conversion
Ideally, you’d have a precise understanding of how much revenue each conversion generates.
However, we understand that this is not always feasible.
In such cases, it’s perfectly acceptable to use “proxy values” – estimations that align with your business priorities.
The important thing is to ensure that these proxy values reflect the relative importance of different conversions to your business.
For example, a whitepaper download may indicate less “value” than a product demo registration based on what you understand about your past customer acquisition efforts.
Establishing Proxy Values
Let’s explore some scenarios to illustrate how you might establish proxy values.
Take the event florist example mentioned in the video. You’ve seen that clients who provide larger guest counts or budgets in their online quote requests tend to result in more lucrative events.
Knowing this, you can assign higher proxy values to these leads compared to those with smaller guest counts or budgets.
Similarly, if you’re an auto insurance advertiser, you might leverage your existing lead scoring system as a basis for proxy values. Leads with higher scores, indicating a greater likelihood of a sale, would naturally be assigned higher values.
You don’t need to have exact value figures to make value-based bidding effective. Work with your sales and finance teams to help identify the key factors that influence lead quality and value.
This will help you understand which conversion actions indicate a higher likelihood of becoming a customer – and even which actions indicate the likelihood of becoming a higher-value customer for your business.
Sharing Conversion Values With Google Ads
Once you’ve determined the proxy values for your conversion actions, you’ll need to share that information with Google Ads. This enables the system to prioritize actions that drive the most value for your business.
To do this, go to the Summary tab on the Conversions page (under the Goals icon) in your account. From there, you can edit your conversion actions settings to input the value for each. More here.
As I noted in the last episode, strive for daily uploads of your conversion data, if possible, to ensure Google Ads has the most up-to-date information by connecting your sources via Google Ads Data Manager or the Google Ads API.