In setting up the value of an online conversion action, what should you do?

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Bhupati Barman

Illustration showing how to assign the correct conversion value based on average lead value in online marketing.

If you are studying for the Google Ads Measurement Certification, this is a question you really need to know. Many people get confused when it comes to setting the value for a conversion. But it is actually very simple. You just need to think about what each lead is worth to your business.

When you set the right value, Google knows how much to spend to bring in more of those leads. If you guess or put the wrong number, your ads may not work well. In this guide, you will learn the correct answer, why the other choices are wrong, and how this helps you in real life. Let’s get started and make it easy to understand.

Question and Correct Answer

In setting up the value of an online conversion action, what should you do?

A) Regardless of the value of the lead, always set it as $1.
B) Regardless of the value of the lead, always set it as $0.
C) If the average value of a lead is $20, assign the value as $200.
D) If the average value of a lead is $20, assign the value as $20. ✅

Correct Answer:

✅ D) If the average value of a lead is $20, assign the value as $20.

Infographic funnel showing how marketing mix models evaluate interaction contribution, sales impact, customer value, and variable impact
Visual breakdown of the marketing mix model process: from interaction to long-term customer value.

Why is this the right Answer?

When you track conversions in Google Ads, you must assign a value that reflects real-world business impact.

Let’s say:

  • For every 10 leads you collect, 1 customer buys a $200 product.
  • That means 1 in 10 = 10% conversion rate from lead to customer.
  • So, each lead is worth $200 × 10% = $20.

👉 If your average lead is worth $20, then set your conversion value as $20.
This allows:

  • Smart Bidding to optimize towards higher-value leads
  • Reports to show revenue vs. ad spend
  • Return on Ad Spend (ROAS) metrics to be accurate
  • Campaign decisions to be more data-driven

Why are the other options incorrect?

A) “Always set it as $1”

  • ⚠️ Why it’s wrong: A flat $1 undervalues the lead.
  • ❌ Example: If your leads are actually worth $20, the platform thinks they’re only worth $1.
  • 🎯 Impact: Smart Bidding underperforms because it can’t prioritize higher-value actions.

B) “Always set it as $0”

  • 🚫 Why it’s wrong: $0 tells Google your conversion has no value.
  • 🔍 Result: No optimization based on value is possible.
  • ⚠️ This is only suitable for pure volume-based strategies, not revenue-based.

C) “Assign $200 instead of $20”

  • ❌ Why it’s wrong: Overinflating the lead value leads to overbidding.
  • 💸 Your ad might show to irrelevant or expensive clicks, thinking they’re worth more than they are.
  • ⚖️ Your actual ROAS will suffer, leading to poor budgeting decisions.

Real & Precise Data Example:

MetricValue
Product Price$200
Leads to Customers Ratio10 leads = 1 sale
Lead Conversion Rate10%
Avg. Value of a Lead$200 × 10% = $20

If you spend $100 and get 5 leads, that’s $20 per lead. You’ve broken even.
If you spend $50 and get 5 leads, your ROAS is positive!

Real-life example

Infographic showing different Google Ads conversion values ($1, $20, $200) with pros and cons of each
Visual breakdown of how setting the right conversion value in Google Ads affects ad optimization and budget accuracy.

Let’s say you run a tutoring website. You offer a free sign-up form to connect with new students. On average, each sign-up turns into a $20 paid lesson later. When setting up your Google Ads conversion tracking, you should set the conversion value to $20. This tells Google that every new sign-up is worth $20 to your business, so it can make smarter choices on how much to bid and who to target.

If you put $1 or $200 instead, Google might think the lead is not worth much—or too much—and spend your budget in the wrong way.

Resource links:

Pro tips:

If lead values vary by action or product, use dynamic conversion values via Google Tag Manager or Google Ads API.

Conclusion

When you set up a conversion value in Google Ads, use the real average amount that each lead brings to your business. If one lead is worth twenty dollars, write twenty dollars in the value box. This lets Google know exactly how much each lead matters.

Putting in zero dollars or one dollar tells Google the lead is not important and it will not push hard to get more of them. Putting in 200 dollars when a lead is only worth twenty makes Google spend too much money.

Using the true value helps the system choose better bids and saves your budget. Remember this rule and you will track your ads the right way and do better on your Google Ads test.

Finally, I can say that if you are ready, you can take the exam on Skillshop – Google Ads Measurement Certification. If you want more real exam questions and answers like this one, which have already been covered, follow along. I’ll be breaking down more Google Ads Measurement Certification exam questions with full solutions in the next posts on Google Ads!

FAQs

What if I don’t know my lead value yet?

Start with a reasonable estimate based on past deals or industry benchmarks. Adjust later as data improves.

Is it okay to assign the same value to all leads?

You can start that way, but over time, segment your conversions if some leads are more valuable than others (e.g., high-ticket product forms vs. newsletter signups).

Can I update my conversion value later?

Yes, conversion values can be adjusted anytime, and historical reports will reflect new values from that point forward.