Predictive AIScaling Google Ads with Value-Based Bidding: A Guide for Growth Marketers
Predictive AI

Scaling Google Ads with Value-Based Bidding: A Guide for Growth Marketers

The Evolution of Google Ads Bidding: From Manual to Value-Based

Google Ads (formerly Google AdWords) has come a long way from its early days of purely manual bidding. In the 2000s, advertisers set bids manually for each keyword and placement, giving full control but requiring constant attention . In 2010, Google introduced Enhanced CPC (eCPC) as a bridge toward automation – it let advertisers set a max CPC while Google automatically adjusted bids in real-time for higher likelihood conversions .

The Smart Bidding era began in the mid-2010s. Around 2013, Google launched automated strategies like Target CPA (cost per action) and Target ROAS (return on ad spend) . These used algorithms to optimize bids for desired outcomes (cost per conversion or return on spend). By 2016, Google formally introduced “Smart Bidding” powered by machine learning, marking a significant shift towards automated, data-driven bid management . This allowed bids to be adjusted in each auction based on dozens of signals, helping advertisers achieve goals more efficiently.

Value-Based Bidding (VBB) emerged as an extension of Smart Bidding in the late 2010s. Google began emphasizing optimization for conversion value – not just conversion volume – around 2018. In 2019, they rolled out the Maximize Conversion Value strategy for Search campaigns, enabling advertisers to automatically bid for the highest total conversion value within budget . Along with the pre-existing Target ROAS strategy, this cemented value-based bidding as the “next level” of optimization. In short, the evolution went from manual CPC → enhanced CPC → Smart Bidding for conversions → Smart Bidding for conversion value. This history sets the stage: today’s growth marketers have powerful tools to let Google’s AI bid not only for more conversions, but for more valuable conversions.

Overview of Current Google Ads Bidding Strategies

Before diving into value-based bidding, it’s important to understand Google’s key bidding strategies available today. These fall into two broad categories: conversion-focused (volume-based) and value-focused strategies:

  • Maximize Conversions: An automated Smart Bidding strategy that aims to get as many conversions as possible within your budget. It does not consider the value of those conversions – every conversion is treated equally. This is useful when your goal is purely to increase lead or purchase counts, not caring if each sale is $10 or $1000 . It can also be paired with an optional Target CPA if you need to keep average costs per conversion around a threshold (Google will then try to maximize volume while hitting that CPA target). 

  • Target CPA (tCPA): Another conversion-focused strategy where you tell Google your desired cost per acquisition. Google then automatically adjusts bids to get as many conversions as possible at roughly that cost per conversion . Target CPA has been a go-to for many performance marketers to control costs. However, like Maximize Conversions, it optimizes for quantity of conversions, not their individual values. 

  • Maximize Conversion Value: A value-based Smart Bidding strategy that tries to maximize the total value of conversions within your budget. Instead of just more conversions, Google prioritizes higher-value conversions (for example, a sale worth $500 in revenue over one worth $50). In other words, this strategy looks at quality over quantity – it doesn’t necessarily aim for the most conversions, but the most valuable ones . You can think of it as the “big sibling” of Maximize Conversions, focusing on return. There is also an option to add a ROAS target (see Target ROAS below), though you can start without one for simplicity. 

  • Target ROAS (tROAS): A value-based strategy where you set a target Return on Ad Spend (e.g. 400% ROAS, meaning $4 revenue for every $1 spent). Google then bids higher or lower in auctions to try and meet that efficiency goal, while still maximizing conversion value overall . It’s analogous to Target CPA but for value: Google uses your historical conversion values and rates to predict future value, bidding more aggressively when a click likely leads to high revenue and pulling back when not . Target ROAS is especially popular in e-commerce where each sale has a dollar value, but it can be used in any business that assigns values to conversions. (More on which businesses benefit most from VBB below.) 

Smart Bidding vs. automated bidding: Note that Google often uses “Smart Bidding” to refer specifically to strategies that optimize for conversions or conversion value at auction-time using machine learning . By this definition, Maximize Conversions, Maximize Conversion Value, Target CPA, and Target ROAS (as well as Enhanced CPC) are all Smart Bidding strategies . They differ in whether they optimize for volume or value, and whether you’re setting a target constraint.

What is Value-Based Bidding (VBB)?

Value-Based Bidding means focusing your Google Ads bidding optimization on the value of each conversion, rather than treating all conversions equally. In traditional CPA bidding, 10 conversions at $10 each would be as good as 10 conversions at $1000 each – the strategy doesn’t distinguish the revenue or profit impact. VBB, on the other hand, uses conversion values (often revenue or an assigned value) to guide bidding. Google’s system will prioritize clicks likely to lead to higher-value outcomes, even if that sometimes means fewer total conversions . As Google’s own definition puts it, value-based bidding aims to “maximize conversion value within a given budget or ROAS target,” whereas standard conversion bidding aims to maximize sheer conversion volume .

How it works: When using a value-based strategy, you need to pass a monetary value for each conversion into Google Ads. This could be the actual purchase amount for an e-commerce sale, different values for different lead types, or even a proxy value (for example, $100 for a demo request vs $10 for a newsletter signup). Google’s algorithms then analyze these values alongside other signals to bid higher for prospects likely to generate more value. Essentially, VBB lets Google’s AI know that Conversion A is worth 10x Conversion B, so it will spend more budget finding more of A. This often results in a higher ROI because the focus is on revenue or quality, not just volume .

What kinds of businesses benefit? Value-based bidding is powerful for any business where not all conversions are equal. It has become standard practice in e-commerce since each transaction has a dollar value – Google Ads can optimize toward higher-order values . However, VBB is not just for retail. Lead generation and B2B marketers can use it by assigning values to leads based on their quality or close rate (for example, a qualified sales lead might be “worth” $500 while a simple eBook download is $5). If your marketing goal has shifted from “just get more leads/customers” to “get more valuable customers,” VBB is likely for you. Google recommends value-based bidding for advertisers who want to differentiate performance based on customer or product value to the business . Conversely, if you only care about driving more conversions regardless of type, then sticking with volume-based bidding might make sense .

Why it’s powerful for scaling: Once you’ve maxed out basic optimizations, VBB can unlock new growth. It allows the algorithm to find pockets of high-value users even if they are more expensive to reach. For example, maybe certain keywords or audiences yield fewer leads but those leads are high-revenue – a CPA strategy might undervalue them, while a ROAS strategy will aggressively pursue them because they improve total return. In practice, companies often see better ROI and the ability to spend more efficiently when switching to value-based optimization, because the ad spend is directed toward what truly drives business value. In short, VBB lets you scale responsibly – you can increase budget and bids to capture more revenue, without simply chasing cheap, low-quality conversions.

When Does It Make Sense to Switch to Value-Based Bidding?

Moving from a CPC or basic CPA approach to value-based bidding is a significant step. How do you know if your team is ready? A few common conditions indicate it’s time to consider the switch:

  • You’re hitting a performance ceiling with CPA bidding. If your Google Ads campaigns have optimized to a point where getting more conversions requires disproportionately higher spend (diminishing returns), it might be time to shift focus. For instance, you’ve lowered your cost per lead as much as possible with manual/CPA bidding, but total sales aren’t growing because those additional leads are low quality. VBB can help by optimizing for leads or sales that move the needle (e.g. higher lifetime value customers), effectively breaking through the volume ceiling by concentrating on value. 

  • Your conversion tracking is mature (and includes values). Before switching, you need a solid measurement foundation. This means you’re reliably tracking conversions in Google Ads and you’re able to assign meaningful values to them. If you’re e-commerce, that likely means the transaction revenue is being recorded for each sale. If you’re B2B or product-led growth, it means you’ve set up a method to value different conversions (or an offline import of revenue per lead). A value-based strategy can only be as good as the input data – without proper conversion values, the algorithm won’t know what to optimize for . Bottom line: ensure “each action is assigned a value” and that your tracking is accurate before you flip the switch . 

  • Your team is ready to prioritize quality over quantity. Adopting VBB often requires a mindset shift. Instead of reporting success purely as “we got 100 leads this week,” you’ll start looking at metrics like total conversion value, average value per conversion, and ROAS. Internally, everyone from the CMO to the PPC manager should agree that, for example, 50 high-value conversions can be better than 100 low-value ones. When your organization is prepared to optimize for revenue or LTV (even if it means fewer raw conversions), that’s a strong signal you’re ready for value-based bidding. 

  • Sufficient conversion volume and data history. Google’s algorithms perform best when they have enough data to learn from. If your campaigns only get a handful of conversions per month, you might struggle with any Smart Bidding strategy (Google recommends at least 15-30 conversions in the past month for stable results). Low volume makes results volatile and the algorithm might not confidently bid for high values. So, consider switching to VBB when you consistently see a healthy number of conversions. Having “enough conversion performance in the recent past” is important for Google’s machine learning to effectively optimize towards ROAS . In practice, many advertisers wait until they have a baseline of data (e.g. a few dozen conversions with values) before trusting the machine to optimize for value. 

In summary, the ideal time to switch is when you have the data infrastructure and the strategic need: tracking is in place, volume is sufficient, and your growth goal is to maximize revenue or profit, not just eyeballs or form-fills.

Common Barriers to Adopting Value-Based Bidding

Despite the benefits, not everyone jumps on value-based bidding right away. Several common barriers can hold teams back:

  • “We don’t have enough conversions for the algorithm.” This is a valid concern – Smart Bidding (including VBB) uses historical conversion data to inform bid adjustments. If your campaigns or account are new or low-volume, you might worry the strategy won’t learn effectively. Google’s stated minimum is ~15 conversions in 30 days for these strategies to start working, but realistically more data (50+ recent conversions) yields better results . A workaround for low volume can be to broaden what counts as a “conversion” (for example, include micro-conversions with proxy values) to feed the algorithm, but doing so requires caution. Lack of data is a barrier, but one that can be overcome as you grow – consider starting VBB on higher-volume campaigns or after accumulating a few months of conversion history. 

  • “We aren’t tracking or assigning conversion values.” Many advertisers simply haven’t set up conversion values, especially outside of e-commerce. If you’ve only been using CPA bidding, you might track all leads or signups with the same value (or no value at all). In such cases, moving to VBB will require a technical and analytical effort to implement value tracking. This can be a barrier if the team doesn’t know how to value different conversion types or if there’s no system to pull revenue data into Google Ads. Without passing values, a value-based strategy simply won’t work (the algorithm would have no signal of which conversions are better) . Overcoming this barrier means investing time in analytics: connect your CRM or back-end sales data to Google Ads, or at least define a heuristic value for each conversion action. It’s a one-time setup that pays off in smarter bidding. 

  • **Internal trust and knowledge gap. Shifting from manual bidding or CPA to an automated value-based approach can be scary for teams who are used to having direct control. Stakeholders might feel, “Will the machine spend my budget on the right things?” or “We’ve always optimized for CPA, this ROAS stuff is new to us.” Indeed, many marketers are hesitant to switch due to familiarity and trust issues . There can be a learning curve to interpret ROAS reports and to set the right targets. Additionally, if leadership is accustomed to CPA or volume-based KPIs, there might be resistance in changing how success is measured. The key to overcoming this barrier is education and testing. Run a small experiment with VBB on a subset of campaigns to build confidence. Share case studies or evidence (even internal tests) showing improved ROI. As one industry analogy puts it, modern automation can free us to focus on strategy – much like advanced cameras handle technical details so photographers can be creative . Building that trust in automation is essential for adoption. 

  • Other practical hurdles: There may be other barriers like needing to restructure campaigns (for example, consolidating campaigns so conversion data isn’t too thinly spread, which Google’s AI prefers), or dealing with multiple conversion types (deciding how to value them relative to each other). Some organizations also worry that switching goals (to ROAS) could conflict with short-term sales targets or lead quotas. The solution is often to align on a common metric (like total revenue or profit from ads) so that everyone is on board with the new approach. 

Recognizing these barriers is half the battle. With careful planning – ensuring data quality, starting small, and aligning stakeholders – you can address the concerns and unlock the benefits of value-based bidding.

Solving the Data Gap: How FunnelFlex.ai Unlocks Value-Based Bidding Earlier

One of the biggest blockers for launching Value-Based Bidding is data volume. Most Smart Bidding strategies — especially those optimizing for conversion value — require at least 50 real conversions per week to function effectively. For early-stage, low-volume, or high-ticket campaigns, that’s a steep barrier.

FunnelFlex.ai solves this problem with predictive AI.

Instead of waiting months to collect enough conversions, FunnelFlex lets you start scaling now — by generating synthetic conversion signals based on user behavior.

Here’s how it works:

  • Model training: After collecting just 50 real conversions, FunnelFlex trains a supervised machine learning model using your site’s behavioral data (scroll depth, session duration, traffic source, etc.).

  • Real-time prediction: The model monitors all users on your site in real-time and estimates the probability they’ll convert — assigning scores like “85% likely to purchase.”

  • Synthetic conversions: These scores are translated into predicted values, which FunnelFlex sends to Google Ads (or other platforms) via GTM or SDK, e.g. “$850 expected value” for a user 85% likely to buy a $1000 product.

  • Smarter optimization, faster: Your Smart Bidding strategy now trains on rich, predictive signals — not just a handful of confirmed conversions. That means better performance earlier in the funnel, faster ROAS feedback, and more efficient scaling.

Final result: reduced CAC, more stable learning, and unlock of Value-Based Bidding weeks or months sooner.

 

Getting Started with Value-Based Bidding: Step-by-Step

Ready to give value-based bidding a try? Here’s how to get started in a practical, phased way:

  1. Set Up Conversion Value Tracking: First and foremost, configure your Google Ads conversion tracking to include values. If you run an online retail or SaaS business, integrate actual revenue or transaction values into the conversion tag (for e-commerce, this is usually passing the order value on the purchase confirmation page). For lead gen or multi-step funnels, decide on proxy values for each conversion event – for example, a free trial signup might be valued at $50 (based on expected LTV or close rates), whereas a basic contact-form lead might be $10. The goal is to give Google’s algorithm a sense of what each result is worth to you. Make sure these values are realistic and reflect the relative importance of different conversions . Tip: If you have back-end data on how leads progress to sales, use it – you can import offline conversion values (like actual revenue from a deal) into Google Ads for even more accuracy down the line. 

  2. Start with “Maximize Conversion Value” bidding: Instead of jumping straight into Target ROAS, a gentle introduction to VBB is using the Maximize Conversion Value strategy (with no ROAS target initially). This lets Google try to spend your daily budget to get the highest total conversion value. It’s often best for campaigns that already consistently use their full budget – Google will simply reallocate that budget toward higher-value opportunities. Monitor performance over a few weeks. You should see total conversion value (and ROAS) improve, though you might notice the number of conversions could decrease if the strategy focuses on fewer, bigger sales. The key at this stage is to gather data and ensure your tracking is working correctly. Because there’s no efficiency constraint yet, maximize-value will go after any and all value it can find within your budget, which usually drives growth in revenue. Pro tip: Keep an eye on your daily spend and pacing – this strategy will try to use the full budget, so make sure your budget limits are set at levels you’re comfortable spending. 

  3. Transition to Target ROAS (tROAS) for efficiency: Once you have a stable baseline of conversion value coming in, you can introduce a Target ROAS goal to enforce profitability or return requirements. Essentially, Target ROAS = Maximize Conversion Value + a profitability target. Start by looking at the ROAS you achieved with the unrestricted maximize-value strategy – say it was 300% (3x return). You might set a slightly lower initial target, like 250% ROAS, to give the algorithm some room to continue learning . Over time, you can raise the target closer to or above your historical performance. The important thing is not to set an overly aggressive ROAS target from day one , as that can choke off volume and confuse the algorithm. For example, jumping to 1000% ROAS overnight might make Google too selective and your conversion count could plummet. Instead, gradually ratchet up the ROAS goal in line with improved performance . While adjusting, keep monitoring metrics like conversion value, spend, and ROAS itself. It’s normal to see a trade-off: as ROAS target increases, total conversion value might plateau or even dip initially (since the campaign is now ignoring a lot of “lower-value” conversions). Find the sweet spot that balances scale and efficiency for your business needs. 

  4. Explore advanced techniques like predictive values: Once you’ve mastered the basics of value-based bidding, you can take it a step further with AI-driven predicted values. Some sophisticated growth teams use machine learning to predict the future value of a conversion and feed that into Google Ads. For instance, if you acquire users who tend to subscribe for 12 months, their lifetime value (LTV) is far higher than a one-off purchaser. Using internal data, you could predict an LTV for each new signup and report that as the conversion value, rather than just the immediate purchase amount. This way, Google’s bidding algorithm optimizes for customers who will bring the most long-term value, not just one-time sales . A famous example of this approach (sometimes dubbed “FinalFlex-style” by advanced practitioners) is assigning conversion values based on downstream metrics – essentially telling Google “this conversion is likely worth $X in the long run, so bid accordingly.” Implementing this requires data science resources and a feedback loop between your backend and Google Ads, so it’s an advanced move. But it can unlock even greater performance by aligning bids with true customer lifetime value. If you’re not ready for full ML-driven LTV prediction, you can still approximate with rules or tiers (e.g. give a higher value to a lead from a target account vs. a random lead, using Google’s Conversion Value Rules or offline data uploads). The main idea is to refine your value inputs to reflect what really matters to the business. 

By following these steps, you progressively upgrade your Google Ads bidding – from basic conversion counting to maximizing value, and eventually to leveraging predictive insights. Always remember to test and learn at each stage. Start with one campaign or a small budget slice to ensure things are working as expected. As you gain confidence, you can roll out value-based bidding to more campaigns and increase budgets, knowing that the spend is focused on high-quality outcomes.

Conclusion: Value-Based Bidding as the Path to Scalable Growth

In the world of performance marketing and growth, Value-Based Bidding represents a mature, scalable approach to Google Ads. It’s not about abandoning what works – manual CPC and CPA bidding have their place in early stages or for tight control – but rather about evolving your strategy to unlock the next level of efficiency and scale. When you’re ready to move from “driving more leads” to “driving more business,” value-based strategies like Target ROAS and Maximize Conversion Value can be game-changers.

Adopting VBB requires a bit of a mindset shift and some upfront work (tracking values, setting appropriate targets, educating the team). However, the payoff is smarter growth: your campaigns start to mirror real business outcomes. Instead of celebrating vanity metrics or raw conversion counts, you’ll be optimizing for revenue, profit, and customer lifetime value. Many businesses have already made this shift and use value-based bidding as a best practice to improve ROI . By doing so, they empower Google’s machine learning to focus on what truly matters – and they free up their marketing teams to strategize on creatives, funnels, and products rather than tweaking bids all day.

In closing, scaling the Google Ads channel is not just about spending more – it’s about spending smarter. Value-Based Bidding gives you a framework to scale responsibly, ensuring that as your investment grows, so do your returns. For Growth PMs, Heads of Growth, and performance marketers aiming for sustainable acquisition, it’s an approach well worth considering. With the right preparation and mindset, value-based bidding can open the door to a new level of efficient growth, where every dollar works harder to bring in not just more conversions, but more valuable customers.

Sources: The information and recommendations above are based on the latest Google Ads documentation and industry best practices, including Google’s support guides on value-based bidding , expert analyses of Smart Bidding strategies , and real-world insights into adopting value-focused approaches in advertising . These sources underscore the effectiveness of value-based bidding when properly implemented and the importance of aligning it with your business’s goals and data maturity. By leveraging these insights, you can confidently navigate the transition to value-based bidding and drive greater performance from your Google Ads campaigns.