For eCommerce Shopping ad campaigns, conversion tracking setup is important because it allows for calculating the two most important metrics in paid search: return on ad spend, and advertising margin.
More importantly, it provides valuable information back to the automated bidding algorithms, which uses machine learning logic to maximize the performance of the campaign.
When a Shopping campaign sends accurate conversion tracking conversion values back to the automated bidding logic, automated bidding with machine learning can deliver significant performance improvements, and greatly reduce campaign management time.
In a Shopping campaign, conversion value setup often generates a value simply equal to the amount of the sale. Preferably, it’s taken a step further, and the “cost of the goods sold” is subtracted to calculate gross margin, creating a more accurate signal. We can setup custom variables to handle this.
When a sale occurs, the value for that transaction is registered as a conversion not just for the last click, but is also distributed (“attributed”) fractionally up through the sales funnel. The weighting for the conversion credits are defined by the click attribution model. This is why you will see fractional conversions in our eCommerce reporting.
More: Our blog articles on automated bidding, conversion tracking, conversion tracking value models