What is conversion value?
Conversion value is the monetary amount your store sends back to an advertising or analytics platform when an order completes, and it is what automated bidding optimises towards.
Worked example, not a result
Deciding what number to send
Say an order comes to 142 at checkout. Inside that total sits 9.50 of delivery charge and 20.30 of tax, leaving 112.20 of product revenue after discounts.
Sending 142 as the conversion value tells the bidding system that the order was worth more than it was, which pushes bids up on products with high shipping and high tax and rewards them unfairly. It also inflates every return figure in the account, so the store believes it is further above break even than it really is.
Sending 112.20 describes the order the store actually earns from. A more advanced version sends the contribution instead, so the system learns to prefer profitable products rather than expensive ones, though that requires reliable cost data on every item.
Whichever you choose, be consistent across every platform and every report, because the whole value of the number is that it means the same thing everywhere. These figures are an example.
Why it matters
Conversion value is the instruction every automated bidding system follows. It decides which products get bid on, which audiences get pursued and where budget goes, so an error here is not a reporting inconvenience; it is a spending decision made on false information.
It also connects the levers to each other. If order value is measured properly, the system naturally pushes towards baskets that are worth more, which supports the order value lever without any extra work. If repeat purchases matter, sending a different value for a first order than for a returning customer teaches the system to prefer new customers, which is often what a growing store actually wants.
For a store owner the decision is a definition and a discipline. Decide once what a conversion is worth, write it down, and make sure every platform receives the same figure. Most disputes about which channel works are really disputes about this.
Common mistakes
- Including tax and shipping in the value. Neither is revenue the store keeps, and including them distorts bidding towards the wrong products.
- Ignoring discounts. Reporting the full price on a discounted order overstates value on exactly the orders that carry the least margin.
- Sending values from more than one source. A pixel and a server side event both firing produces double counted revenue and confident bidding based on a number twice the truth.
- Never subtracting refunds. Categories with high return rates report far more value than they earn, and the bidding system keeps buying the products that come back.
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