Is your monthly Google Ads budget under $5k, and are you struggling to achieve even 30 conversions? Then this post might be a solution for your struggles.
The Performance Max campaign type it’s a huge beast, but thrives on substantial data and larger budgets. When he receives both, flies like a rocketship. Without them, performance can be inconsistent — oscillating between awesome and dismal days.
In this guide I will show you how you can fool the machine with “fake” but still relevant data so you can get the most out of your budget and have a stable performance.
Let’s dive right into it!
Table of Contents
1.0 Performance Max and conversion volumes
By now, you might be having a few questions:
How many monthly conversions do I need for consistent performance?
What should be my daily budget?
These are valid questions, but, as you may suspect, there is no straightforward answer to this. When Google rolled out the PMax campaigns they suggested having at least 30 conversions. However, Google recently removed these recommendations. I looked long enough in the official documentations, but came up empty-handed.
The only official reference I found refers to the general smart bidding, which could potentially apply to PMax. Here, a benchmark of at least 50 conversions is noted if you are using tROAS.
Other sources claim that we should have at least 30 conversions a month per campaign, other sources mention 50 conversions.
But what do we see in real life?
1.1 The Relationship Between Conversion Volumes and Performance
Mike Ryan analyzed thousands of e-Commerce centric Performance Max campaigns, evaluating the correlation between their conversion volume and the ROAS achieved in relation to set targets.
As you can see, with rising conversion volumes in a PMax campaign, stability increases, and campaigns are more likely to meet the set target.
Inspired by his approach, I also took a look at the data in our MCC account (more than 1.7k campaigns) and I see exactly the same pattern.
From the above data, it becomes evident that achieving 30 conversions a month doesn't guarantee consistency. You need at least 60, but the ideal is if you have 150 or more in a month.
1.2 The Double-Edged Sword of Limited Budgets and Data
If your advertising budget is on the lower end and you're not hitting the conversion numbers discussed earlier, brace yourself; there's another demon coming your way.
Competition and their vast data - joined the chat Back in the day, a smarter account structure allowed even the smaller players to stand tall alongside the big spenders. In the current era of smart bidding, those days are behind us.
Previously, your primary concern was budget limitations. Now, there's a second battleground: data volume.
The reality? Bigger spenders don't just have deeper pockets — they have a ton of data. This means they can feed the algorithm more refined and more information, giving them a significant edge in every auction.
Sadly, at the moment small players are losing the war on 2 fronts.
But, fear nothing
Here's your secret weapon in this digital warfare: Micro Conversions!
2.0 Micro and Macro conversions
The concepts of Micro and Macro conversions can be translated into straightforward definitions:
Micro Conversions = the road to generate revenue
Macro Conversions = the revenue generator
Identifying macro actions is easy, since they directly relate to revenue generation. Most businesses have one primary macro conversion, though occasionally, there might be multiple.
The real challenge lies in finding those micro conversions.
2.1 Identifying the relevant micro conversions
For impactful micro conversions, the actions should find the balance between 3 things:
Require effort: Actions that demand a certain level of commitment from users.
Be moderate in volume: Avoid overly frequent actions, as they can confuse the algorithm.
They are close to the end goal: The chosen micro conversion should be as close as possible to the action that generates the revenue.
Not ideal candidates:
A visit to a relevant page
A click on email or tel number
Time spent on a certain page
Interaction or time watching a video
Interaction with chat
Ideal candidates:
Downloading a white paper/catalog
Adding a product to the cart
Starting the checkout procedure
Subscribing to the newsletter
Creating an account (webshop)
For e-commerce sites, finding these actions is straightforward due to a more linear conversion funnel.
However, when we shift our focus to lead generation, the identification process becomes a lot more complicated. This will vary per business case.
2.2 Identifying the relevant macro conversions
I think we don’t have to waste time explaining this in too much detail. These are the actions that generate revenue for you.
In case of e-Commerce:
Purchase
In case of Lead generation:
Lead form
Qualified leads
Actual sales
3.0 Leveraging micro conversions in your strategy
With a clear understanding of your micro conversions and how to find time, it's time to talk about the main action.
In this strategy we will use both the micro and macro conversions as a Primary conversion in your Google Ads account.
Note: The strategies below are on campaign level. So you are using both micro and macro conversions as Primary in a campaign
I know what you might be thinking Is he really saying to optimize for those smaller actions that don’t directly bring in the cash?
Stay with me. Before you jump to conclusions, keep reading. It’s gonna blow your mind!
Note: From my experience, this method only works when paired with a value-based bidding strategy.
So that means you need to assign a value to the micro conversions. I explain this in the following chapter.
In the case of e-Commerce that’s self explanatory.
If you're wondering how to apply value-based bidding to lead gen, I recommend this awesome article that breaks it down.
4.0 Assigning value to your Micro Conversions
This isn't just an important step.
It's everything!
The success of your entire setup starts here.
You are telling Google with the conversion values which conversion is more important to you. If you mess up he values, you mess up the whole setup.
Note: If you're unwilling or unsure about assigning values to your micro conversions, I don’t recommend this strategy.
Happily Google has its own tool that can help you with assigning the correct value to your micro conversions.
This tool guides you through your funnel and helps to find the appropriate values for each stage, based on the rate of conversion between the actions.
What's required from your end? Simple. Insert the stages of your conversion funnel and the conversion rates from one step to the next.
Gathering this data is easy if you're using GA4. If you've already been monitoring these micro-conversion events in Google Ads, you're one step ahead.
If you know the values for your micro conversion events we can move further. Here we can also have basic and more advanced approaches.
4.1 Manual - Set a static value - Starter level
While this method can be adapted for both eCommerce and lead generation, it shines particularly well with lead-generation-focused accounts. In eComm most of the time you have multiple products with different prices and different conversion rates.
Implementing this approach means resorting to average data at the account level. Which can lead to less precise values for your micro conversions.
Sample calculation with the tool from Google. (Lead gen example)
With these values at hand, your next move is to assign them to your conversion actions in Google Ads.
Note: Ensure you select the highlighted option shown in the screenshot
4.2 Automatic - with GTM - Advanced level
For those running e-commerce stores, this option might just be your best starting point. In this step we will use the account level conversion rates between the actions, but the values will be set based on the price of the actual item.
This approach draws from both the previous method and the one we'll discuss next, creating a hybrid system that capitalizes on the strengths of both.
Let’s break this down with an example:
Suppose a product sells for $250 – this is the end value of the conversion journey.
Begin Checkout: If 12.5% of users starting checkout buy the product, the expected value at this step is $250 × 0.125 $31.25.
Add to Cart: If 25% from this step proceed to checkout, then the value here is $31.25 × 0.25 = $7.8125.
In short: Every 'Add to Cart' is worth $7.8125 and 'Begin Checkout' is worth $31.25, based on given conversion rates and the final product price of $250.
If you know the percentages like I calculated it above, you can utilize a script like the example below in Google Tag Manager to create a JavaScript variable.
This will serve as your Conversion Value variable for the micro conversion.
Note: This requires a bit of GTM knowledge. I won’t cover that in this post.
//The value of Add to Cart is determined based on the Add to Cart to Begin Checkout rate
//alfred@pitcocy.com
function () {
var num = {{DLV - ecommerce.value}} * 0.25;
var display = num.toFixed(2)
return displaySample tag setup
4.3 Automatic - Pro level
This is when we move things to another level.
To be able to use this advanced method you need to have good GTM skills and also you will need a lot of other things that should already be in place. (For example: Enhanced Conversion for Leads is up and running)
Let’s see how you can use this for based on your account type
4.3.1 eCommerce: Product ID-level valuation
While the script from the previous method offers a great solution, we can tailor it further by focusing on individual Product IDs instead of account level. Dynamic Conversion Rates: Rather than applying average rates across the board, this method is dynamically sending the conversion rates tailored to each specific Product ID.
Micro Conversion Value Variability: If you're using actions like "Add to Cart" and "Begin Checkout" as micro conversions, you'll find their values varying from product to product.
This difference comes from the performance metrics associated with each individual Product ID.
The advantage? Your top-selling products gain an edge in the auction due to their higher micro conversion value.
4.3.2 Lead Gen: Focusing on sales not leads
I presume you’re already familiar with offline conversion tracking (OCT) in Google Ads or familiar with Enhanced conversion for leads. If these terms are new to you, the linked resources below can guide you.
Note: At this stage I presume you have OCT up and running with the imports in place.
One of the main challenges of utilizing OCT is the difficulty in achieving 30 or more conversions monthly at the campaign level.
So, how do you tackle this obstacle?
By setting each conversion action as a primary. Properly attributing value to each step ensures that you guide the algorithm in fine tuning your funnel.
If we use the calculator from Google you can have something like this:
5. Choosing the Right Bid Strategy
If you are still reading, thank you!
I know this is a long one 😀
Your next questions might be:
Which bid strategy should I use?
Awesome question!
You have 2 options, a basic and a more advanced option.
1.Basic: Maximize Conversion value without tROAS
In this case you let the machine optimize towards the actions that will generate the most revenue.
2.Advanced: Maximize Conversion value with tROAS
This strategy gets a tad intricate. Your challenge? Determining the perfect 'Blended ROAS' to guide your bid decisions.
The catch?
Since you’re melding both micro and macro conversions in your campaign, the cumulative conversion value combines genuine revenue with the values assigned to micro conversions.
This fusion requires serious calculations to pinpoint the optimal target ROAS.
6. Crafting a timeline for your test
Not sure where to start? Let me outline a practical timeline to kick off your testing.
For demonstration purposes, I'll use an eCommerce business
This illustration offers a step-by-step guide, starting modestly with static values.
As you gather data, the roadmap gets more advanced, gradually tuning and refining your setup. Think of it as a progressive tune-up, elevating your ad strategy with each step.
7. Cases
In theory, strategies might sound promising. But, real-world applications are the important things. Let's dive into two cases where the previously discussed strategies have been applied successfully.
1. eCommerce Case
Here, we have an eCommerce client. In this case on a campaign level I use the “Add to Cart”, “Begin Checkout”, and “Purchase” conversion events, all as Primary conversion. As you can see the extra volume from the Micro events helped increase the number of Purchases.
2. Lead Gen Case
In this case I use the following conversions:
Catalog Download (Micro)
Lead form on the website (Micro)
Qualified leads - using Enhanced Conversions for Leads (Micro)
Actual closed deals - using Enhanced Conversions for Leads (Macro)
As the micro conversions grow in numbers, so do the macro conversions.
Both of the clients have less than 60 conversions a month on campaign and account level
Final Thoughts
The sum it all up, here are the main focus points:
Data Importance: Google Ads has evolved into a data-centric platform, and the more data you feed the algorithm, the better your performance potential.
PMax Campaigns: While powerful, PMax campaigns require substantial data and budget for consistent performance. However, even smaller budgets can see success with the right strategies.
Micro vs. Macro Conversions: Micro conversions act as critical informants to the algorithm, while macro conversions drive revenue. Recognizing and valuing both is key.
Assigning Value: Every interaction, even the smallest, should be attributed with a value. It’s this quantification that allows for optimal bid strategies.
Bid Strategy Selection: Whether you opt for a basic strategy like Maximize Conversion value without tROAS or the advanced Maximize Conversion value with tROAS, it's essential to understand your business’s unique needs.
Testing and Refinement: No strategy is perfect out of the gate. Testing, refining, and evolving your approach based on real-world data is crucial.
Conclusion
The world of Google Ads is more complicated than ever, with algorithms that thrive on rich, detailed data.
For businesses, especially those with limited budgets, navigating this space might seem daunting.
However, by leveraging the extra data from the micro conversions, assigning appropriate values, and strategically selecting bid strategies, even smaller players can stand shoulder to shoulder with the big boys.
As a closing sentence:
If you don’t have data, then make some!
Have a good one,
Alfred