Value-based bidding is an approach to automated bidding where the ad platform tries to maximise the total value of your conversions, not just their number, by bidding more for people likely to be worth more to your business. In Google Ads it means using the Maximise conversion value strategy, with or without a target ROAS.
How value-based bidding works
Standard conversion bidding treats every conversion as equal. If a kitchen fitter in Bristol gets one enquiry for a £400 repair and one for a £25,000 new kitchen, a strategy that maximises conversions sees two equally good results. Value-based bidding sees one small and one large result, and learns to compete harder for the searches, audiences and times that produce the large ones.
It relies on a conversion value attached to each conversion. For an online shop, that is usually the basket value sent from the checkout. For a lead-based business, you assign values: a fixed figure per form type, or better, real values imported later from your CRM once you know which leads turned into customers.
Google’s options are Maximise conversion value, which spends the budget to get the most value, and the same strategy with a target ROAS, which aims for a set return on each pound spent. Meta offers a similar idea through its highest-value and ROAS goal options.
Why it matters
Most businesses do not make the same money from every customer, yet many ad accounts are set up as if they do. Bidding on conversion count alone tends to pull spend towards whatever converts most cheaply, which is often the least profitable work. Value-based bidding lines the algorithm up with what actually pays your bills.
For UK lead-generation businesses, such as solicitors, installers, private clinics and B2B suppliers, this is where the biggest gains often hide. A conveyancing enquiry and a complex commercial dispute may arrive through the same form, but they are not worth the same to the firm. Telling Google the difference changes which searches it chases.
Common mistakes
- Switching to value bidding before values are trustworthy. Placeholder values, or the same value on every conversion, give the system nothing to learn from.
- Mixing VAT-inclusive and VAT-exclusive values across conversion actions. Pick one basis, ideally net of VAT, and apply it everywhere so ROAS means the same thing in every report.
- Counting micro-actions such as page views or button clicks as primary conversions with values, which inflates the total and steers bids towards cheap, low-intent traffic.
- Setting a target ROAS far above recent performance on day one, which throttles spend sharply.
- Judging the change after a week. Bidding strategies need time and conversion volume to settle, and value data from offline sales often arrives weeks later.
How to act on it
Start with measurement. Check that each primary conversion action carries a value, that the values are consistent and that refunds and duplicates are handled. For lead businesses, record the click identifier with each enquiry and plan to import offline conversions with real sale values; conversion value rules can adjust values by location, device or audience where you know some are worth more.
Once value data is reliable and volume is steady, move one campaign to Maximise conversion value without a target, watch it for several weeks, then add a ROAS target set close to what the campaign already achieves. I set this up step by step as part of PPC management, because the bidding is only as good as the values behind it.