Written by EJ Velos on Dec 29 , 2022

Learn how to set up conversion tracking for Google Ads with Tag Manager to gain more campaign insight and drive better customer experiences.

Here, you’ll find:

  • The importance of tracking Google Ads conversions 
  • What Google Tag Manager is
  • The benefits of using Google Tag Manager for Google Ads conversion tracking
  • How to set up Google Ads conversion tracking with Google Tag Manager

So, you’ve set up an “optimized” Google Ads campaign. You’ve identified your target audience, set an ideal budget, and are targeting top keywords. Stunning.

Now, after some time, you’re seeing a significant number of clicks, which have translated into sales. Even better! 

Mission accomplished, right?

Unfortunately, your job isn’t done yet.

Aside from setting up Google Ads (formerly Adwords) campaigns, it’s just as critical to set up Google Ads conversion tracking. That’s because you can gather conversion data and gain a deeper understanding of your campaigns.

But why does this matter?

While generating sales from your Google Ads campaigns lets you know your ads are working, you need a peek behind the curtain to A: know what you did right, and B: find growth opportunities.

To do that, you need an efficient tool like Google Analytics (GA) and Google Tag Manager (GTM) for Google Ads conversion tracking. 

google tag manager

What is Google Tag Manager?

Google Tag Manager is a free online tool and tag management system that lets advertisers manage and deploy marketing tags (code snippets used for collecting marketing data) without having to enlist a developer. 

Just to be clear, GTM is not a conversion tracking tool, per se. In most cases, when deploying code, every other code on the website will need to be changed. But no changes to the code are necessary when applying Google tags (more on this later).

Put simply, “GTM is just a tool to add code to a website without needing a developer to physically do so,” explains HawkSEM Search Engine Marketing Manager Steve Gantzer.

GTM provides a centralized platform for tracking websites and collecting marketing data. Through this platform, marketers can stay on top of their online properties and keep track of their marketing activities.

Why is It important to track conversions?

In basketball, each player’s performance is monitored along with the game’s final score. This way, the coach can gauge the team’s overall performance and find individual opportunities for improvement.

Just like a basketball game, the success of your Google Ads campaigns is also a product of different elements that must be tracked to measure the performance of the entire campaign.

  • Which ads are performing well?
  • What keywords are driving sales?
  • Which campaigns are generating little returns?

These and many other questions can be answered by tracking your conversions. 

“Conversion tracking is important for a couple of reasons,” says Gantzer. “Most importantly, it helps measure the effectiveness of a company’s digital efforts (advertising, SEO, CRO, email marketing, etc.).”

Additionally, conversion tracking helps you gather valuable conversion data and collect insight so you can:

  • Make tweaks to existing ads and make them more profitable
  • Find top-performing keywords, improve your keyword list, and refine your bidding strategy
  • Optimize each element and find the best ad copy
  • Offer a smoother user experience for your target audience
  • Gather historical data that can be used to inform future ad campaigns

How does Google Tag Manager work?

To learn how GTM works, it’s key need to understand three main elements:

  • Tags are snippets of Javascript code or tracking pixels from third-party tools that tell GTM what to do. These can be a global site tag, a Google Ads conversion tracking tag, or a Google Ads remarketing tag. 
  • Triggers are instructions that let GTM know how, when, or when to perform the action. The trigger type will vary based on the specific action you want the tag to fire, such as a page view, link click, form submission, or a custom event.
  • Variables provide additional information and instructions to specify the action and provide specific information to help rule out unimportant data.

Through the GTM web-based interface, you can create tags for specific information you want to obtain and set up triggers for when to fire the tag. Then, when the specific action is performed, the tag will fire.

You can then set up variables to obtain even more specific information, which helps automate your tag configurations.

google tag manager on laptop

(Image: Adobe Stock)

Google Tag Manager v. Google Analytics: Which is better?

It’s highly likely you’re already familiar with Google Analytics. And while GA also provides data collection capabilities, it differs from GTM in one key aspect: reporting. GA is able to create reports and offer campaign analysis, while GTM is used only for storing and managing third-party code.

“Google Tag Manager is a tool that is meant to inject code into a website to send information on any number of variables someone might be interested in, [while] Google Analytics is the actual platform where those variables are captured and measured,” explains Gantzer.

So, comparing Google Tag Manager with Google Analytics is really like comparing apples with oranges. However, they make a pretty tasty fruit salad when combined.

As Gantzer explains further, Google Tag Manager can also track conversions by itself, although it will be very hard to do. So instead, use it in tandem with Google Analytics to become quite an effective tool for quickly implementing conversion tracking.

Many clients regularly 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. See it in action here

Setting Up Google Ads conversion tracking on Google Tag Manager

To begin setting up conversion tracking for your website, Google recommends you satisfy two main requirements:

  • You have a website on which the Google tag code will be installed.
  • You have edit access to the website so that you can add the code.

Next we’ll provide instructions on installing a Google Tag on your website. If you’ve already done so in the past for Google Analytics, you can skip the next section and directly go to how to create a conversion action.

Otherwise, read on to learn how to set up a Google Tag on your website.

How to set up a Google tag on your website

  1. Begin by creating a Google Tag Manager account. Go to the GTM homepage and click Start for Free.
  2. Since this is a Google product, you will need to log in using your Google account.
  3. On the top right section of the screen, click on Create Account.
  4. Fill in your account details on the Account Setup page. 
  5. Add your website’s domain name and select Web as your target platform under Container Setup.
  6. Click Create to proceed with account creation.
  7. Read the terms of service carefully, then tick the box acknowledging that “I also accept the Data Processing Terms as required by GDPR.”
  8. Click Yes to continue.
  9. A window will pop up containing two sets of code that you will need to paste onto the HTML (1) header and (2) body sections of your website.

If you’re using a WordPress template, you can do this by accessing the Theme File Editor under Appearance and opening the header.php file.

Alternatively, you can also install the Google Site Kit plugin on WordPress to seamlessly install the Google Tag on your website, regardless of whether you’re using a template. 

  1. After adding the site tag to your website, go back to Google Tag Manager and click on Preview.
  2. Enter your website page URL and click on Connect
  3. Google Tag Assistant will display a message showing that the tag was successfully installed onto your website. Click on Finish, go back to the previous window, then click Continue.
  4. Close the preview window and click Submit.
  5. Finally, enter the version name and click Publish.

After creating a Google Tag Manager account and installing GTM on your website, you can head back to the GTM dashboard to create a conversion action.

Creating a conversion action

Defining your conversion action lets you know how well your ads are performing in terms of attracting meaningful actions from your target audience.

For instance, if you’re advertising items for sale from your ecommerce store, you’ll most likely want to measure how many items are added to the basket and checked out.

To set up this conversion action on Google Ads, you will need to:

  1. Go to the Google Ads dashboard and sign in to your account.
  2. Click on the tools icon in the upper right corner of the screen.
  3. Under the Measurement option, click Conversions.
  4. Click on the button marked +New conversion action.

At this point, you will be asked where you want the action to be tracked: your website, an app, phone calls made through the ads, or imported from another platform like Google Analytics (more on this later).

In this case, we want to measure an action on the website.

  1. Select Website and click Next.
  2. Enter your website URL and click Scan.

Google scans your website to see if the Google tag has been set up. If you’ve set it up correctly, you will see a confirmation page along with a GTM tracking code. But if you haven’t set this up yet, refer to the previous section.

Setting up your conversion action

There are two methods to set up your conversion action: Use method one if you want to measure page load as a conversion and don’t want to customize your measurement setup. However, if you choose this method, you won’t be able to use Google Tag Manager for tag setup.

We’ll focus our discussion on the second method, which requires you to set up your conversion action manually.

Setting up your conversion action manually

  1. To begin, go to the section “Create and install conversions manually (advanced).”
  2. Click on the +Create conversion button.
  3. Prompts will appear, asking you to change the following parameters of your conversion action:
    1. Goal and Action Optimization – Select a goal from the drop-down menu to see which goal the conversion counts toward
    2. Conversion Action Optimization Options – Sets the priority of the conversion action (primary action for bidding optimization and reporting or a secondary action for observation)
    3. Conversion Name – Must be unique while subscribing to the conversion goal to make it easier to recognize later on
    4. Goal – The action you want to track and maximize by launching campaigns
    5. Conversion Value – Defines the value of a conversion to you. You can choose to set the same conversion value for all actions or different values for each conversion, depending on which action was performed
    6. Count – Determines how many times a conversion is counted. This will depend on the action being counted and how relevant repeat actions are.
  4. Some campaign parameters can also be changed as follows:
    1. Click-Through Conversion Window – Selects the duration of time a conversion can be counted after interaction with an ad. For instance, the window for shopping campaigns can be set between 1 and 90 days.
    2. Engaged View-Through Conversion Window – The duration of time a conversion from the drop-down can be counted. Using shopping campaigns as the same example, the window can be set between 1 to 30 days.
    3. Attribution Model – Set the model for attribution of the conversion depending on your campaign. The default setting uses the Last Click model. You can opt not to change this setting since most databases use this model frequently.
  5. Once you’re done altering the settings, click on Save and Continue to move to the next step.

Pro tip: It doesn’t matter if a user fills up a form multiple times since they only converted once, which means it should be counted once. But an item sold numerous times to the same user counts as multiple conversions.

google tag manager settings

A look at Google Tag Manager settings

Google tag setup

After creating a conversion action, it’s time to set up the tag and add it to your website.

At this point, you have three options: 

  • Set it up yourself
  • Email the tag to your webmaster
  • Install the tag directly to your website using Google Tag Manager

Guess which one we’re going to use? Hint: it rhymes with Floogle Bag Tanager.

To install the conversion tracking tag with Google Tag Manager, you will need two critical pieces of information: the Conversion ID and the Conversion Label of your Conversion Action. Once you have these two, follow the instructions below to set up the tag:

  1. Open Tag Manager and select New Tag to start a new Google Ads tag. Then, choose Tag Configuration > Google Ads Conversion Tracking to link Google ads to Google Tag Manager.

Note: to ensure proper tracking across different browsers, you must ensure that the Conversion linker is enabled and set up to fire on all web pages. 

  1. While configuring the tag, add the Conversion ID and Conversion Label in their respective fields.
  2. Click Next to proceed to the next step.
  3. Set up a new trigger for the tag to fire when the action is performed. Click on the Plus icon in the top right corner to create a trigger for this tag.
  4. Select Custom Event and find the event name that triggers the tag. You can choose any event relevant to the action, like a click.
  5. Click Save to complete the tag setup.
  6. Click the Preview button to preview the settings you’ve selected. If you’re happy with the settings, click Submit.

Testing the tag setup

If you want to see if your conversion tag has been set up correctly or if you suspect that something is wrong, sign in to your Google Ads account to confirm the existence of the problem.

  1. On the Google Ads dashboard, click on the Tools icon to open Settings.
  2. Under Measurement, click Conversions.
  3. On the screen, you will see a table of active conversion actions. Locate the action you want to check, click on the name, and look at its Status. This will give you information about whether your conversion tags are still working as intended.

And that’s it! You’ve successfully combined the power of Google Ads and Google Tag Manager to enable a more efficient way of tracking conversions from your Google Ads campaigns.

The takeaway

Conversion tracking is an essential process in digital marketing that offers greater insight into the success of your marketing strategies.

In that regard, Google Tag Manager can definitely make your life easier once you’ve learned how to set it up. Integrating Google Ads and Google Tag Manager makes testing and validating conversion events much easier and more efficient. This speeds up the time it would take to optimize your advertising efforts to drive more conversions. 

More conversions means the higher likelihood of closed business, which means you’re that much closer to scaling your business and crushing your goals. 

EJ Velos

EJ Velos

EJ is a passionate writer and storyteller with over five years of content marketing experience. He is a home cook, an artist, a musician, and a lover of all things pop culture.

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