🚀 What Is Value-Based Bidding?

Value-Based Bidding (VBB) lets you tell Google not just what conversions matter, but how much they matter. Instead of treating all leads equally, you assign values to different types of outcomes based on their actual business impact: like qualification stage, deal size, or predicted LTV.

It’s the difference between optimising for leads vs. profitable growth.

📈 Why VBB Matters in 2025

Google’s AI is only as good as the signals you give it. With increased automation across Search, PMax and YouTube, advertisers who feed the algorithm real value data will outpace those who don’t.

In other words: Feed the machine smarter signals = get better results.

🛠️ How to Set It Up (Step-by-Step)

1. Define Value Tiers: Work with your sales or product team to assign real values to lead types. Example:
   • Brochure download = £5
   • Demo request = £30
   • Qualified SQL = £100
2. Adjust Google Conversions: In Google Ads → Tools → Conversions → Assign custom values or pass them dynamically via gtag/GTM.
3. Choose the Right Bidding Strategy: Use “Maximise Conversion Value” or “Target ROAS” instead of “Maximise Conversions.”
4. Test & Optimise: Start with a 2-4 week learning period. Monitor ROAS, CPL by type, and conversion-value trends.

🧮 How to Calculate the Value of Each Conversion Event

You can work backwards from your final sale to assign value to each step in your funnel – just ensure the total value passed to Google doesn’t exceed the actual revenue.

Example funnel:

• Quote Start → Quote Complete → Sale

Assign value to earlier steps based on: Conversion Rate to Sale × Average Sale Value

Example Calculation:

• 10% of quote completions lead to a sale
• Average sale value = £500
• Quote Complete Value = 10% × £500 = £50
• 50% of quote starts become quote completions
• Quote Start Value = 50% × £50 = £25

So you’d assign:

• Quote Start = £25
• Quote Complete = £50
• Sale = £425

This setup ensures that if all three conversion events are triggered in the same journey, the total value passed to Google remains capped at £500. These values can be passed into Google Ads as dynamic or static conversion values, helping you optimise for meaningful business impact rather than just raw lead volume.

Secondary Option – Conservative weighting

• Quote Start = £10
• Quote Complete = £40
• Sale = £450

This approach reduces the weight of early-stage conversions and places more emphasis on final revenue.

⚠️ Common Mistakes

• ❌ Flat values for all leads – treating every action equally ignores high-value opportunities and can erode profitability.
• ❌ No sales/product alignment – without cross-functional input, your value tiers won’t reflect true business priorities.
• ❌ Chasing vanity actions – optimising for top-funnel metrics like page views won’t drive your bottom-line goals.
• ❌ Ignoring dynamic values – static values can’t adapt to changing deal sizes or seasonality, skewing bids over time.
• ❌ Mis‑using primary vs secondary actions – conflating optimised and tracked conversions dilutes your bidding focus.
• ❌ Wrong campaign‑level conversion – a mismatch between campaign goals and conversion settings sends Google misleading signals.
• ❌ Inaccurate value calculations – small errors in your spreadsheet compound quickly, leading to suboptimal bidding decisions.
• ❌ Dragging out ROAS switch – a piecemeal transition confuses the algorithm; make a bold, timely shift to lock in learning.

✅ Bonus Framework: The Low Digital VBB Ladder™

1. ✅ Track micro & macro conversions – capture both small interactions and key revenue events to give Google a full-funnel view.
2. ✅ Assign monetary values – quantify each action’s impact so that your bids prioritise highest ROI opportunities.
3. ✅ Feed values via CRM/GTM/API – automate value imports to ensure your data is always up‑to‑date and accurate.
4. ✅ Switch from CPA → tROAS – move from volume-focused to value-focused bidding to align spend with profit targets.
5. ✅ Commit to strategy shift – execute your bidding update decisively and let the algorithm stabilise before making tweaks.

🧠 Advanced optimisation Tips

1. ✅ Import offline revenue – close the loop on leads by importing closed‑won figures, refining your value dataset.
2. ✅ Use audience segments – layer in high-LTV and repeat purchaser audiences to sharpen your value signals.
3. ✅ Audit attribution windows – ensure your conversion lookback periods match actual sales cycles for reliable reporting.
4. ✅ Test value tier granularity – experiment with coarse vs fine-grained tiers to find the signal clarity sweet spot.
5. ✅ Optimise transition timing – move during low-volume periods to minimise disruption and give the algorithm clear data.