What is value-based bidding?
Value-based bidding is an approach where bids are set according to the value of each conversion, so the platform bids more for opportunities likely to bring higher-value customers and less for those likely to bring lower-value ones.
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How value-based bidding works
You assign values to your conversions, and the platform learns which searches, audiences, and contexts tend to produce more valuable ones. It then adjusts bids to favor them.
Strategies such as target ROAS and maximize conversion value are common ways to do this.
Why it matters
Counting every conversion equally treats a small order and a large one the same way. Value-based bidding lets your spend follow revenue or profit, which is what the business cares about.
It is also useful for lead generation. If you can tell the platform which leads became customers and what they were worth, it can find more like them.
Getting the values right
The strategy is only as good as the values you provide. Pass accurate order values, or use offline conversion imports to tell the platform which leads closed. Decide whether to use revenue or profit, and apply it consistently.
Common questions
What is the difference between value-based bidding and conversion-based bidding?
Conversion-based bidding aims for the most conversions or a target cost per conversion. Value-based bidding aims for the most total value or a target return.
Can lead generation businesses use value-based bidding?
Yes. Assign values to leads by quality, or import offline sales results, so the platform can learn which leads are worth more.
Should values be revenue or profit?
Profit reflects the business better when margins vary between products. Revenue is simpler. Pick one and use it consistently.
Which strategies are value-based?
On Google Ads they include target ROAS and maximize conversion value. Other platforms offer similar value-focused options.
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