Conversion Tracking for Google Ads: How to do it Right

Learn all you need to know about conversion tracking in this step-by-step guide.

Here, you’ll find:

• What a conversion is
• The importance of tracking Google Ads conversions 
• The types of Google Ads conversion 
• The benefits of conversion tracking  

Think about conversion tracking like keeping score during a game: You don’t know where you stand without it.

Google’s Economic Impact report shows that, on average, a business will see a $2 return for every $1 spent on Google Ads. That’s a 200% return on investment.

But there are still a lot of brands whose ads fall below that average. And a big reason for this can be that their conversion tracking is set up poorly.

According to WordStream, conversion rates decreased significantly across industries last year compared with the previous year. Over 90% of industries saw a decrease in conversion rate, with an average overall reduction of 14%.

With conversion rates declining, conversion tracking is more important than ever. This article will give you a complete guide to Google Ads conversion tracking so you can quickly identify issues with and optimize your Google Ads.

What is conversion tracking?

Conversion tracking gives you visibility of your conversion rates and where your conversions are coming from, and such insight you can use to optimize your ad campaigns.  (Image: Adobe)

Conversion tracking is how advertisers track and quantify the actions people take on their website after clicking on their ads.

Let’s break this down a bit.

A conversion is defined as any action a user takes that you want to measure. You might think of it like a goal, such as:

• Completing a purchase
• Newsletter sign-up
• Calling your business
• Submitting a form

What should you be tracking? “It all really depends on what businesses want to see,” says Andrew Serra, Data Analytics Manager at HawkSEM. He says there are some obvious things — like tracking purchases and add-to-carts for ecommerce businesses.

“It’s all about what you want to visualize. You want to visualize the funnel and see them falling off,” Serra  says. He emphasizes that tracking is about using the right metrics to understand and act on your data.

Conversion rate is calculated by dividing the number of conversions divided by the sum of clicks received. 

Now, conversion tracking gives you visibility of your conversion rates and where your conversions are coming from, and such insight you can use to optimize your ad campaigns.

Set up Google Ads conversion tracking: two options

There are a couple of ways to set up conversion tracking. You can use the Google Ads tag and install the tracking code—another way to use Google Analytics. You can even use Google Tag Manager to install code snippets easily! We’ll explain how all of this works.

How to set up conversion tracking with the Google Ads tag

In this method, you’ll need to log into your account and navigate to the wrench icon (Tools and Settings) at the top right. Then click on Conversions under Measurement. From here, click the blue New Conversion Action button.

Now, you’ll choose from Website, App, Phone Calls, or Import. If you’re doing a “standard” setup, you’ll be choosing from Website or Phone Calls. The first option allows you to track your site’s form submissions and other events. The second tracks phone calls to your website or through the call extension. Import is used when you’d like to import a Google Analytics goal (Universal or GA4), offline conversions, or conversion imports from a CRM like Salesforce (a.k.a. advanced stuff).

We’ll walk through the Website option since that’s the most common. You’ll use this to measure website conversions like contact form fills, newsletter sign-ups, and adds to cart. 

Click it, and you’ll be taken to a screen that asks to scan your site. Put in your domain and allow Google to scan it. Then, scroll down past Create conversion actions automatically from website events to Create conversion actions manually using code.

Now, click on + Add conversion action manually.

Goal and action optimization

Enter the goal category under goal and action optimization. This can be one of the following.

• Purchase
• Add to cart
• Begin checkout
• Subscribe
• Contact
• Submit lead form
• Book appointment
• Sign-up
• Request quote
• Get directions
• Outbound click
• Page view
• Other

Name and count

Name your conversion and add a value. This helps Google decide how important your conversion is when you use manual bidding. For ecommerce, measuring return on ad spend (ROAS) and other key metrics is essential. You can choose to Don’t use a value for this conversion action if you prefer.

Select your count – every or one – keeping in mind that lead gen-related goals should generally only be counted once. Update the rest of the settings as needed, and click done when you’ve completed the setup.

When you’re done creating your conversions, hit Save and Continue. From here, you have several options to install your conversion tracking. The first is to set up your Google Tag and view your event snippet. You’ll install these manually on your website. If you have a webmaster, you can email the instructions to them via the second option. The last option is to use Google Tag Manager.

Setting up conversions with Google Tag Manager

Google Tag Manager is a convenient option that allows you to install a code on the website once and use the platform to add code snippets. There are templates, so you don’t have to worry about setting anything up from scratch. Plus, there’s even a WordPress plugin, making it simple for non-techy types to add codes to a WordPress-based site. Just keep in mind you’ll need to know the URLs for key pages like your thank you page to set up triggers for your conversions.

How to set up conversion tracking with Google Analytics

Another way to set up Google Ads conversion tracking is to use Google Analytics. With this method, there are some steps you’ll need to take before setting up the conversion action in Google Ads.

Within your Google Analytics account, you’ll have to set up a goal for your conversion event (Universal Analytics) or configure an event for Google Analytics 4. Once this is done, you’ll need to link your Google Ads account. 

Once these steps are complete, you can follow the above directions to create a conversion action and choose Import instead of Website. 

Using this method has some advantages. First, you don’t have to set and install any extra codes on your website. Second, you can see your Google Ads conversion data long side your direct, organic, and referral traffic. This allows you to understand and analyze your data on a larger scale. You can compare the performance of different mediums and campaigns all in one place.

Having trouble setting up a conversion tracking, Serra recommends turning to Semo Ahava, Analytics Mania, and Measurement School. 

“Semo Ahava is good if you want to get really technical. This is for somebody that’s a little more experienced in the technical aspect of Google Tag Manager,” he says. He noted that this was one of his favorite resources because there are extensive blog posts on a variety of tracking topics, making troubleshooting and learning easy. 

Not to worry, though. There are resources for all experience levels! 

How can you optimize your Google Ads conversion tracking? 

‍The magic of Google Ads comes from using conversion tracking to assign sales and conversions to individual keywords and ads. But simply having that information is not going to do you much good. You need to use it to change your ad strategy and continue optimizing your Google Ads. Here are some ways you can do that. 

Set up A/B testing

A/B Testing can be one of the best ways to truly understand your audience and their wants. With A/B testing, you run two versions of an ad and give them equal splits of your traffic. 

These versions can help you figure out what combinations of ad copy, design, and targeting lead to the highest level of engagement from your customers.  Once you have your results, you can replicate your ads’ successful combinations and continue making new versions to further refine your ads. 

This tactic of ad optimization is especially useful for businesses that invest a lot in their advertising. Your conversion tracking will give you detailed reports on the ads that generate the most income giving you a better understanding of where your ad spend should be put. 

Many businesses that run Google Ads have issues tracking conversions from click to close. But our exclusive ConversionIQ dashboard, which is primarily built on the successful deployment of GTM, helps connect the dots. 

Explore your ROAS

ROAS is a key metric to monitor to help you optimize your ads. It is one of the most useful yet complex metrics for helping you understand if your ads are generating a profit or loss. 

With conversion tracking, however, tracking this metric becomes less complex. You can use your tracking to monitor the performance of each ad individually. Then you can allocate your resources to your ads targeting the highest converting and most profit-generating audiences. 

Some parameters you can look at when tracking ROAS include location, device type, languages, etc. You can then segregate the traffic and build separate campaigns that will maximize your profits.

Why conversion tracking matters

Tracking your conversions is imperative to a successful campaign because you need to know what aspects of your campaign and targeting are performing well. 

Conversion tracking insights help you understand your ads’ true return on investment (ROI).  Rather than presenting decision-makers with metrics that mean little to them, you can speak their language and truly explain the value of your ads.

As a marketing manager, you can think of yourself as a football coach with all your ads as players. As a coach, you want to monitor each player’s performance along with the game’s final score. You can then gauge the team’s overall performance and find individual opportunities for improvement.

Like a football game, how well your Google Ads performs results from many elements working harmoniously. So you need to track the performance of the entire campaign.

For example, some questions you might look to answer with your campaign tracking include:

• Which ads are performing well?
• What keywords are leading to purchases?
• Which campaigns are getting clicks but not converting?

Terms you need to know

In order to get the kind of insights we have been talking about from your conversion tracking, you need to have your tracking set up in Google Ads.

The first step in conversion tracking is to define your conversion (add to cart, app download, etc.). 

You then need to install the proper tracking tag and choose an attribution model. 

But of course, if it were really that simple, we wouldn’t need to write an entire blog post dedicated to it. Let’s clear up what some of these terms mean so you can make informed decisions about your conversion tracking. 

What is an attribution model? 

An attribution model is a necessary setting in your conversion tracking setup. It will impact how each of your conversions is counted and allocated to which of your ads. 

For example, if a user interacts with multiple ads before converting, an attribution model decides which ads should be given credit for the conversion.

There are a few attribution models you can choose from. 

• First-click attribution gives all the credit to the first ad the user interacted with.
• Linear attribution gives each ad that the user interacts with a divided portion of the credit. 
• Data driven attribution uses your past data to assign credit.
• Time decay attribution distributes the credit based on how close the click happened to the conversion. So, the ad clicks closer to the conversion. According to Google, “Credit is distributed using a 7-day half-life. In other words, an ad interaction 8 days before a conversion gets half as much credit as an ad interaction 1 day before a conversion.”
• Last click attribution gives all of the credit to the last ad clicks.
• Position based attribution gives 40% of the credit to the first and last ad clicks (and the associated keywords), then doles out the remaining 20% across the other interactions that occurred along the path.

What is conversion value?

Conversion is either a real or assigned value you give your conversion action. With the rise of smart bidding, these values have become more important. (Image via Unsplash)

Conversion value is another term you’ll want to get familiar with as you set up your conversion tracking. 

Conversion is either a real or assigned value you give your conversion action. With the rise of smart bidding, these values have become more important.

For example, let’s say that your business knows that every time a form submission is completed on one of your landing pages, it leads to a $1000 job, which is higher than your average job value. To account for this ad’s extra profit, you can assign the conversion action (form completion on that specific landing page) the value of $1000.

Why is this important? Because it can help you create a bidding strategy that delivers a higher ROI by bidding more on ads that lead to higher-value conversions.  

What is a Google Tag?

You’ll want to get comfortable with Google Tag Manager as it will help you peek behind the curtain and understand if your ad strategy is delivering and if you have any new growth opportunities.

Your Google Tag is a code that you add to your website to help you monitor your ad traffic. Your tag essentially acts as a “middleman” between your website and your Google Ads account.

This is an essential step in conversion tracking as it is what enables your website to accurately send completed conversion actions back to your Google Ads account for them to be recorded.

If you want to learn more about setting up conversion tracking, check out our guide for How to Set Up Google Tag Manager For Better Google Ads Conversion Tracking.

What types of conversions can you track with Google Ads?

The last step in understanding Google Ads conversion tracking terminology is to understand the various conversion tracking options that Google Ads offers. While conversions can be almost any action that a user takes, Google doesn’t have tracking options for all of them.

Google Ads offers five main types of conversion actions for you to track:

• Website actions: Website actions are the most basic and widely used type of Google Ads conversions. These conversions include things such as a purchase, form completion, or button clicks.
• Phone calls: As you may guess from the name, a phone call conversion action tracks a call to your business from your Google Ad.
• App installs: App installs will only be relevant to your business if your Google Ads are advertising an app. This conversion action will track the number of downloads that your Google Ad.
• Offline conversions: As the name suggests, these conversions take place offline but could be traced back to your ad. For example, this could be an over-the-phone sale or an in-person purchase.
• Local conversions: If your business has a brick-and-mortar location, you can use location conversion to track whenever someone completes an action related to that location after interacting with an ad. For example, these actions can include getting directions on Google Maps, clicking to call, or even viewing a menu.

The takeaway 

Conversion tracking is an essential process in monitoring your Google Ads campaigns and will offer great insight into the success of your strategies. Conversion tracking helps you keep track of the various conversions that your ads are creating. And you can then use this information to help you further optimize your ads by monitoring conversions from segregated ads and audiences.