Last Updated on January 29, 2025
This training will cover Conversions in Google Ads.
In addition to giving you some basic information above Google Ads conversions, it will teach you how to set up conversion tracking using two different methods: (1) Importing conversions from GA4 and (2) Using GTM to set up direct conversions.
Driving traffic to a website is only helpful if that traffic takes a valuable action. If an action on a website is considered to be valuable, it is likely a conversion. There are three types of conversions we track: form fills, calls, and purchases.
A form fill conversion is any time the visitor gives their information with the intent of receiving something in return.
A call conversion is a type of lead. We only track a phone call as a conversion when a minimum call time has been reached. Usually, the time is 60 seconds.
A purchase conversion is anytime the visitor pays for a service or product on a payment portal online. This is called eCommerce.
Almost as important as tracking conversions, is tracking the conversion value. Finding the conversion value for a lead generation client is simple. The equation is:
Conversion Value = AOV * Closing Rate
AOV: average order value
Closing rate: the rate of leads that become paying clients
The above conversion value will reflect the revenue generated for each lead. If you want the conversion value to reflect the profits generated by each lead, multiply the AOV by the client’s profit margin.
The AOV is $875. The closing rate is 35%, and the conversion rate is 25%. What is the conversion value?
Conversion value = $875 * 0.35 = $306.25
Let’s look at it another way using the same numbers. Google Ads sends 733 visitors to the site. Given a 35% closing rate and an AOV of $875, what would the total value be? With the given information, all we know is that each lead is worth $306.25, but we have no way to know how many of the 733 visitors became leads. In order to calculate this, we need one more number, the conversion rate. The conversion rate is the rate of clicks that become leads. The conversion rate is 25%.
Total value = visitors * conversion rate * conversion value = 733 * 0.25 * 306.25 = $56,120.31
We are saying that 733 visitors generated 183 leads at $306.25 per lead for total revenue of $56,120. If we want to know what the value per visitor is, we can simply divide the value by the number of visitors.
Value per visitor = total value / visitors = $76.56
We can also calculate the value per visitor when the total value and number of visitors are unknown with the following:
Value per visitor = AOV * closing rate * conversion rate
Value per visitor = $875 * 0.35 * 0.25 = $76.56
This means that as long as we are spending less than $76.56 for each visitor, the account will have a positive ROI. Let’s say the average cost per click was $25 for a total cost of $18,325 (733*$25), and the profit margin given by the client is 45%. In order to find the profits, multiply the total value by the profit margin and subtract the cost.
Profits = (total value * profit margin) – cost
Profits = ($56,120 * 0.45) – $18,325 = $6,929
To find ROI, we take the total value and divide by the cost.
ROI = total value / cost
ROI = $56,120 / $18,325 = 3.06
That means for every $1 spent on the account, the client is generating $3.06 in revenue. You can choose to look at how much the client is generating in profit for each dollar spent by multiplying the total value by the profit margin before dividing it by cost. If you do this, you get 1.38.
All of this is the same with an eCommerce client, except the value/conversion is automatically pulled for each transaction. You only need to calculate the profit. In Google Ads, the ROI is given by the metric “Conv. value / cost”.
In the video we uploaded the Goals as Secondary Conversions. Talk to the MC to know which you should switch to Primary Actions.
This video gives an example of setting up “direct” conversions in Google Ads using GTM. Google claims that these are “15% more accurate” than imported conversions. The downside is that these conversion actions are not recorded in Analytics and are only reported within Ads.
Way to go on finishing this module’s training. Below is the exam for this module. Fill out the form and press submit. The Fulfillment Manager will let you know if you passed or need to retake the exam.
Level 1 MA Exams