Calculating Conversion Value

One of the most common mistakes advertisers make is leaving conversion values blank for qualified lead actions. Assigning realistic values enables Google’s Smart Bidding algorithms to optimize effectively for revenue, not just volume.

The Formula

Formula

Qualified Lead Value = Average Customer Value ÷ Qualified Leads Needed Per Customer

Step-by-Step

Determine your average customer value

Establish the revenue you generate from a single converted customer. This could be:

Annual contract value
Average project fee
Average order value
Lifetime customer value (if you prefer long-term optimization)

Calculate your conversion rate

Review your CRM data to determine how many qualified leads convert into actual paying customers. Express this as a percentage or ratio.

For example, if 1 out of every 6 qualified leads becomes a customer, your conversion rate is approximately 16.67%.

Apply the formula

Divide your average customer value by the number of qualified leads needed to produce one customer.

Example

A health practitioner has the following numbers:

Average program value: $3,000
Qualified lead conversion rate: 16.67% (1 in 6 leads)

The calculation:

$3,000 ÷ 6 = $500 per qualified lead

This means each qualified lead is worth $500 to the business. Setting this as the conversion value in Adscriptly tells Google Ads to bid appropriately for leads at this value level.

Why This Matters

Proper conversion valuation allows Google Ads to:

Bid more strategically — allocate budget toward clicks most likely to produce valuable leads
Optimize for lead quality — distinguish between high-value and low-value conversion sources
Provide accurate reporting — see true ROAS rather than cost-per-lead
Make smarter budget decisions — shift spend to campaigns generating the highest-value leads

Important

Leaving conversion values at $0 or $1 is one of the most common Smart Bidding mistakes. It prevents Google from distinguishing between high-value and low-value conversions.

Maintenance

Recalculate your conversion values quarterly, or whenever these factors change:

Your qualified lead conversion rate improves or declines
Average customer value changes (new pricing, upsells, churn)
You launch new products or services with different price points

Tip

Keep a simple spreadsheet tracking your conversion rate over time. This makes quarterly recalculations quick and ensures your values stay aligned with actual business outcomes.