# How to Set Up Conversion Value Optimisation in Google Ads
In the early days of Google Ads, most Australian business owners were happy just to get a click. Then, we moved to tracking conversions (like a form fill or a phone call). But today, not all conversions are equal. A lead for a $50 service isn't the same as a lead for a $5,000 project.
Conversion Value Optimisation (CVO) allows you to tell Google’s AI which leads are worth more to your business. By assigning dollar values to your conversions, you move from "maximising clicks" to "maximising revenue," helping you achieve a better Return on Ad Spend (ROAS) and ensuring your budget is spent on the customers that actually grow your bottom line.
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Prerequisites: What You’ll Need Before Starting
Before we dive into the setup, ensure you have the following ready:- Google Ads Account: Admin access to your account.
- Conversion Tracking: You must already have conversion actions set up (e.g., Google Tag Manager or the Google Tag).
- Historical Data: Google typically needs at least 15-30 conversions in the last 30 days to use value-based bidding effectively.
- A Clear Value Strategy: You need to know what a conversion is worth to you (we will cover how to calculate this below).
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Step 1: Calculate Your Conversion Values
Before touching the software, you need to do some maths. If you run an e-commerce store, your value is the transaction amount. If you are a service-based business (like a plumber in Brisbane or a law firm in Sydney), you need to calculate an Estimated Value.- The Formula: (Average Sale Value) x (Lead-to-Close Rate) = Conversion Value.
Step 2: Access Your Conversion Settings
Log into your Google Ads account. In the left-hand sidebar menu (or the top tool icon depending on your view), click on Goals > Conversions > Summary.What you should see: A list of all your active conversion actions, such as "Contact Form," "Phone Call," or "Purchase."
Step 3: Assign Values to Existing Conversions
Click on the name of a conversion action you want to optimise (e.g., "Lead Form"). Click Edit Settings in the bottom right corner.- Find the Value section.
- Select "Use different values for each conversion" (best for e-commerce) or "Use the same value for each conversion" (best for lead gen).
- Enter the dollar amount you calculated in Step 1.
- Set the currency to AUD - Australian Dollar.
- Click Save and then Done.
Step 4: Implement Dynamic Values (For E-commerce)
If you are selling products online, a static value won't work. You need to pass the actual cart total to Google.- Using Shopify/WooCommerce: Most Aussie e-commerce platforms have native integrations that do this automatically. Ensure the "Value" setting in Google Ads is set to "Use different values."
- Using Google Tag Manager: You will need to create a Data Layer Variable for
valueand map it to your Google Ads Conversion Tag.
Step 5: Define Your Conversion Goals
In the same Conversions menu, ensure that only your most important actions are set as "Primary" goals.- Primary: Used for bidding (e.g., a completed sale or a high-intent lead).
- Secondary: Used for observation only (e.g., a newsletter sign-up or a page view).
Pro Tip: Don't assign high values to "Secondary" goals, or Google’s AI will chase cheap, low-value actions instead of actual sales.
Step 6: Enable Enhanced Conversions
Enhanced Conversions improve the accuracy of your value tracking by using hashed first-party data (like an email address).- In the Conversion Action settings, look for the Enhanced Conversions section.
- Tick "Turn on enhanced conversions."
- Select "Google Tag" or "Google Tag Manager" and follow the prompts to verify your URL.
Step 7: Check Your Data Quality
Wait for 7-14 days after assigning values. Go to your main Campaigns view and add the following columns to your report:- Conv. value (Total revenue generated)
- Conv. value / cost (This is your ROAS)
- All conv. value
What you should see: A dollar figure appearing in the "Conv. value" column. If this stays at $0.00 after a week, your tracking is not firing correctly.
Step 8: Switch Bidding Strategy to "Maximise Conversion Value"
Once you have consistent value data flowing in, it’s time to let Google’s AI take the wheel.- Select a Campaign.
- Go to Settings > Bidding.
- Click Change bidding strategy.
- Select Maximise conversion value.
Step 9: Set a Target ROAS (Optional but Recommended)
After running "Maximise Conversion Value" for a few weeks, you’ll notice an average ROAS. To stabilise your spend, check the box Set a target return on ad spend (tROAS).- If you want $5 back for every $1 spent, set your tROAS to 500%.
- Warning: Don't set this too high initially (e.g., 1000%), or Google might stop showing your ads because it can't find "perfect" customers.
Step 10: Monitor and Adjust
CVO is not a "set and forget" strategy. Every month, review your Lead-to-Close rate. If your sales team gets better at closing, your conversion value in Google Ads should be increased to reflect that your leads are now worth more.---
Common Mistakes to Avoid
- Setting Values Too High: If you tell Google a lead is worth $1,000 when it's really worth $100, you will overspend on expensive auctions that don't yield a profit.
- Mixing Lead Types: Don't give a "General Inquiry" the same value as a "Request a Quote." The latter is much closer to a sale.
- Changing Strategies Too Fast: Google's "Learning Phase" takes about 7 days. If you change your bidding strategy and then change it again 3 days later, the AI will never optimise properly.
Troubleshooting
- Issue: "Conv. Value" is $0 despite having conversions.
value parameter is being sent. In Google Ads, ensure you haven't selected "Don't use a value for this conversion action."
- Issue: Spend dropped significantly after switching to tROAS.
- Issue: Values are showing in the wrong currency.
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Next Steps
Setting up Conversion Value Optimisation is the single best way to align your marketing spend with your actual business bank account. Once this is running:- Review your Location reports to see which Australian suburbs are producing the highest-value leads.
- Analyse your Search Terms to see which keywords lead to big sales versus small inquiries.
If you're finding the technical setup of Google Tag Manager or tROAS a bit daunting, the team at Local Marketing Group is here to help. We specialise in helping Aussie businesses get more value from every advertising dollar.
Need a hand with your Google Ads? Contact us today for a strategy audit.